The Union Cabinet today approved a Rs 9,585 crore scheme aimed at replacing over 2 lakh old trucks and buses in the Delhi-NCR with cleaner BS-VI models and electric vehicles (EVs), a move that has been welcomed by the automotive industry as a major step towards fleet modernisation and cleaner mobility.
According to an official statement, the two-year scheme, to be implemented through the National Capital Region Planning Board (NCRPB), is expected to benefit around 2.07 lakh vehicle owners in Delhi-NCR, including 1.91 lakh trucks and 16,329 buses. The programme seeks to incentivise owners of BS-IV and older commercial vehicles (CVs) to switch to BS-VI-compliant vehicles or EVs.
Industry executives said the scheme’s combination of financial incentives, tax concessions and manufacturer support could help accelerate the replacement of ageing commercial vehicles in one of the country’s most polluted regions.
This is a positive step towards accelerating the adoption of cleaner vehicles in Delhi-NCR. A combination of 5% interest subvention by the Centre, road tax concessions by states, monthly fuel vouchers of up to Rs 4,800 by oil marketing companies (OMCs), and discounts by original equipment manufacturers (OEMs) allows participation from all stakeholders to provide an opportunity to owners of old CVs to leverage the programme, thereby contributing to reducing pollution load in NCR,” said
Shailesh Chandra, President, Society of Indian Automobile Manufacturers (SIAM).
As per SIAM data, the CV sales rose 12.6% year-on-year (y-o-y) to 10.80 lakh units in FY26 from 9.59 lakh units in FY25. It FY24, their sales stood at 9.69 lakh units.
Girish Wagh, MD and CEO, Tata Motors, observed that the scheme could help speed up the transition to cleaner commercial transportation.
“The approval of this scheme is a positive step towards accelerating fleet modernisation and cleaner mobility in the Delhi-NCR region. Aligned with our commitment to make cargo and passenger transportation greener and more efficient, we are well-positioned to support this transition through our expansive portfolio of BS-VI and zero-emission CVs, and our
nationwide network of Re.Wi.Re registered vehicle scrapping facilities. We look forward to studying the finer details of the notification to further align our efforts towards building a more sustainable and modern commercial vehicle ecosystem,” he said.
VE Commercial Vehicles (VECV) MD and CEO B Srinivas described the initiative as a potential template for fleet renewal programmes in other parts of the country.
“We applaud the government for approving the vehicle replacement scheme for Delhi-NCR. This is a significant step towards accelerating fleet modernisation while addressing one of the region’s most pressing environmental challenges. As India progresses towards its Net Zero 2070 ambitions, such initiatives demonstrate how policy, industry…
and technology can come together to drive sustainable mobility. At VECV, we believe this will not only support cleaner transportation in Delhi-NCR but also serve as a model for fleet renewal and modernisation across the country during its Amrit Kaal. We are committed to supporting our customers through this transition with a wide range of Eicher and Volvo trucks and buses offering fuel options covering electrics, CNG, LNG and clean BS-VI diesel,” he said.
The scheme has a total financial outlay of Rs 9,585 crore, including Rs 5,041 crore from the Central government and an estimated Rs 1,601 crore in tax concessions from participating states. It will be implemented by the Ministry of Road Transport and Highways and the Ministry of Petroleum and Natural Gas in collaboration with Delhi, Haryana, Rajasthan and Uttar Pradesh.
Under the scheme, owners of BS-III or older trucks and buses will be required to scrap their vehicles at registered vehicle scrapping facilities. BS-IV vehicles can either be scrapped or sold outside NCR in non-NCAP cities and towns. To avail benefits, owners must purchase and register a BS-VI or stricter-emission-compliant vehicle or an EV within NCR.
The Centre will provide a 5% interest subvention on vehicle loans for five years, monthly fuel vouchers worth up to Rs 4,800 (via OMCs) depending on the vehicle category, and lump-sum benefits for EV purchases or Certificate of Deposit trading.
The participating states will waive registration fees and provide up to 100% motor vehicle tax concessions for new vehicles and 50% concessions for used vehicles for 10 years. States will also waive pending liabilities on old vehicles enrolled under the scheme. In addition, participating OEMs will offer discounts of 8% on ex-showroom prices.
The government said the initiative is expected to significantly reduce vehicular emissions in the region. According to a study by Automotive Research Association of India (ARAI) and The Energy and Resources Institute (TERI), the transport sector contributes 14% of PM2.5 emissions, 40% of carbon monoxide emissions and 63% of nitrogen oxide emissions in Delhi-NCR.
While trucks and buses account for only 3% of the vehicle fleet in the region, they contribute 36% of transport-sector PM2.5 emissions. The government said a single pre-BS heavy-duty vehicle emits as much as 14 BS-VI compliant vehicles, while a BS-IV vehicle emits 2.7 times more pollution than its BS-VI counterpart.
The scheme will be implemented through a fully digital platform that will enable eligibility checks, automated interest subvention claims, fuel voucher credits and monitoring of pollution reduction outcomes. Benefits from the Central government will continue for five years from the date of registration of the new vehicle, even though enrolment under the scheme will remain open for two years.
