India Autos - Greening Delhi-NCR's commercial vehicles

Research evidence excerpt

India Autos - Greening Delhi-NCR's commercial vehicles

Global Markets Research

4 June 2026India Autos

EQUITY: AUTOS & AUTO PARTS

Greening Delhi-NCR's commercial vehicles Research Analysts

India Autos & Auto Parts

Two-year scheme to reduce vehicular emissions by Kapil Singh - NFASL

kapil.singh@nomura.comincentivizing cleaner commercial vehicles

+91 22 403 74199

Cabinet approves scheme for replacement of old trucks and buses in Delhi-NCR Siddhartha Bera, CFA - NFASL

area (link) siddhartha.bera@nomura.com

+91 22 403 74362 • The government has launched a two-year scheme with INR95.9bn in funding

(INR50.4bn from Central Government plus INR16bn in tax concessions from

participating states) to reduce air pollution in Delhi-NCR by incentivizing replacement

of older commercial vehicles with cleaner alternatives.

• Target vehicles and beneficiaries: The scheme targets approximately 207k lakh

truck and bus owners in Delhi-NCR, focusing on BS-IV or older vehicles that

contribute disproportionately to emissions (trucks and buses account for 36% of

particulate matter (PM) 2.5 emissions despite being only 3% of the fleet).

• Vehicle replacement requirements: Owners of BS-III or older vehicles must scrap

them at registered facilities, while BS-IV vehicles can be scrapped or sold outside

NCR. Owners must then purchase BS-VI-compliant or electric vehicles, with Delhi

requiring light goods vehicles and buses to be electric or BS-VI CNG only.

• Multi-stakeholder incentives: Central government provides 5% interest subvention

on loans for five years, monthly fuel vouchers (up to INR4,800), and EV purchase

benefits; state governments waive registration fees and offer up to 100% motor

vehicle tax concessions; auto manufacturers provide 8% discounts on ex-showroom

prices.