In order to encourage private investment in the ecosystem for car recycling, the Ministry of Road Transport and Highways (MoRTH) announced on Wednesday that 11 states and UTs have joined the National Single Window System (NSWS) for the Voluntary Vehicle-Fleet Modernization Program (V- VMP).

The ministry further stated in a statement that as of November 14, 2022, 117 investors' applications for Registered Vehicle Scrapping Facilities (RVSF) are in the works, of which 36 have already received state government approval. According to the notification, the following states have joined NSWS for the V-VMP: Gujarat, Uttar Pradesh, Karnataka, Andhra Pradesh, Odisha, Madhya Pradesh, Rajasthan, Assam, Goa, Uttarakhand, and Chandigarh.

On April 1, 2022, the Vehicle Scrappage Policy (V-VMP) went into effect. The regulation, which was announced in the Union Budget 2021–22, stipulates that personal automobiles must undergo fitness testing after 20 years, while commercial vehicles must do so after 15 years. The statement further indicates that the swift onboarding of all other states and UTs onto the NSWS has begun.

Additionally, the state/UT government is proposing 84 automated testing stations (ATSs) in 11 different states through a Request for Proposal (RFP) after conducting the required tenders. Investor summits have been held in 16 states to highlight the key components of the V-VMP programme and to draw private investment.

"According to forecasts based on vehicle registration data from Vahan, 40–45 RVSFs must be built in India over the next two years, and 60–70 RVSFs must be built over the course of the next five years. Like that, it stated that India would need 130–150 ATS in the following two years and 450–500 ATS in the following five years.

According to the new policy, the states and Union Territories (UTs) will offer up to a 25% tax credit on road tax for automobiles that are purchased after discarding older vehicles, the Center had stated.