In a major step towards reducing vehicular pollution and accelerating fleet modernisation in the National Capital Region, the Ministry of Road Transport and Highways (MoRTH) on Monday signed the first Memorandum of Understanding (MoU) under the Government of India’s vehicle replacement scheme with commercial vehicle manufacturer Ashok Leyland and its electric mobility subsidiary, Switch Mobility.
With the signing of the agreement, Ashok Leyland and Switch Mobility have become the first Original Equipment Manufacturers (OEMs) to partner with the Government for the implementation of the scheme aimed at replacing older, polluting trucks and buses operating in the Delhi-NCR region.
Under the MoU, the two companies will offer an 8 per cent discount on the ex-showroom price of eligible trucks and buses purchased under the scheme. In the case of electric vehicles, the discount will be capped at the level applicable to an Internal Combustion Engine (ICE) vehicle of the corresponding Gross Vehicle Weight (GVW) category.
The Ministry said the agreement marks a significant milestone in operationalising the ambitious initiative designed to encourage the replacement of ageing commercial vehicles with cleaner and more environmentally friendly alternatives.
The scheme targets trucks and buses registered in Delhi-NCR that comply with Bharat Stage-IV (BS-IV) or earlier emission norms. Vehicle owners replacing these older vehicles with Bharat Stage-VI (BS-VI) compliant vehicles or electric vehicles will be eligible to avail a range of financial incentives offered jointly by the Centre, participating states, and automobile manufacturers.
Apart from the 8 per cent discount being provided by participating OEMs, the Central Government will offer a 5 per cent interest subvention on vehicle financing. Beneficiaries will also receive fixed monthly fuel vouchers for a period of five years, reducing operational costs and encouraging faster adoption of cleaner vehicles.
State Governments participating in the scheme will provide additional incentives, including up to 100 per cent concession on motor vehicle tax for a period of ten years and a complete waiver of registration fees for eligible beneficiaries.
The MoRTH said the comprehensive package of incentives has been designed to make fleet replacement financially viable for transport operators while simultaneously addressing the growing challenge of air pollution in the Delhi-NCR region.
The initiative forms part of the Government’s broader strategy to improve air quality, reduce vehicular emissions, and accelerate the transition towards cleaner transportation technologies. Commercial vehicles, particularly older trucks and buses operating under outdated emission standards, are considered a major contributor to air pollution in the region.
By encouraging vehicle owners to transition from BS-IV and older vehicles to BS-VI-compliant or electric alternatives, the scheme is expected to significantly lower emissions of particulate matter and other harmful pollutants.
The Ministry also indicated that more automobile manufacturers are likely to join the programme in the coming weeks, expanding the range of vehicle options available to beneficiaries and increasing the scheme’s overall impact.
The MoRTH expressed confidence that wider participation by OEMs would help accelerate the adoption of cleaner commercial transport technologies and contribute to long-term environmental and public health goals in the National Capital Region.
The signing of the first MoU with Ashok Leyland and Switch Mobility is being seen as an important step in translating the Government’s clean mobility objectives into actionable outcomes, while providing commercial vehicle operators with tangible financial incentives to modernise their fleets.
As additional manufacturers come on board, the scheme is expected to play a crucial role in promoting sustainable transportation, reducing pollution levels, and supporting India’s broader climate and clean energy commitments.
