NEW DELHI: The commercial vehicle industry in India requires a more robust and strategically designed vehicle scrappage policy to expedite the replacement of aging trucks, mitigate pollution levels, and decrease logistics expenses, according to Ashok Leyland Managing Director and CEO Shenu Agarwal. This call to action comes as the sector experiences a significant resurgence in demand following the implementation of GST 2.0 reforms.
Record Sales and GST Impact
Data from the Society of Indian Automobile Manufacturers (SIAM) reveals that commercial vehicle sales achieved an unprecedented milestone, reaching 10.3 lakh units in the year 2025. Agarwal emphasized that the rationalisation of the Goods and Services Tax (GST) framework has been instrumental in driving this demand surge. He clarified that the positive effect extends beyond mere price reductions, contributing to enhanced overall consumption patterns and more efficient freight movement across the country.
Aging Fleet and Operational Challenges
Agarwal highlighted a concerning trend regarding the age of India's truck fleet. The average lifespan of commercial vehicles has increased to nearly 11 years, up from the previous range of seven to eight years. This aging fleet results in higher operational costs and diminished efficiency for logistics operators. Older trucks, particularly those compliant with BS2 and BS3 emission standards, are less fuel-efficient and more polluting compared to modern BS6 vehicles.
Need for Policy Clarity
While fleet owners acknowledge the superior fuel efficiency and environmental benefits of BS6 trucks, many are hesitant to invest in new vehicles without a clearer and more supportive policy framework. Agarwal stressed that a well-structured scrappage policy would provide the necessary impetus for fleet modernization, leading to substantial reductions in carbon emissions and operational expenditures.
The Ashok Leyland CEO's remarks underscore the critical intersection of economic growth, environmental sustainability, and regulatory support in shaping the future of India's commercial transportation sector.
