India's automotive sector is approaching a structural inflection point where circularity must be
treated as an industrial system challenge rather than a downstream waste-management
activity. Rising vehicle volumes10, increasing material complexity17, and tighter policy
expectations12 13 are collectively exposing the limits of the traditional linear model. In this
environment, circularity becomes central to managing material risk, maintaining supply
resilience, and preserving long-term competitiveness.
This paper frames automotive circularity through a Reduce-Reuse-Recycle (3R) hierarchy,
emphasizing value retention over end-of-life disposal". Global experience demonstrates that
high circularity outcomes emerge only when interventions are sequenced deliberately: material
reduction is embedded at the design stage", reuse is enabled through disciplined end-of-life
capture and OEM-backed systems7 8, and recycling is engineered for quality recovery rather
than volume alone9. Benchmarks from Germany, Japan, and the Netherlands illustrate how
each lever performs when supported by coherent policy, infrastructure, and industry alignments
India enters this transition with a unique profile. Material recovery occurs at significant scale16,
supported by deep repair and reuse markets, but remains largely informal and uneven in quality,
safety, and traceability12. Over the past few years, India has built an increasingly comprehensive
circularity policy stack combining vehicle scrappage rulest2, Registered Vehicle Scrapping
Facilities (RVSFs)12, and multiple Extended Producer Responsibility (EPR) regimes covering
batteries14, tires15, plastics16, oils16, and residues16. The challenge has shifted from policy
formulation to system delivery.
Infrastructure development marks this critical transition phase. Formal dismantling capacity is
expanding12, and OEM participation is rising13, but end-of-life vehicle flows remain dominated by
informal channels12. Automated Testing Stations (ATS), designed to act as the trigger for formal
ELV capturet2, are unevenly distributed and currently convert very few vehicles into scrappage"
As a result, formal facilities remain underutilized, reuse remains inconsistent, and outcomes
beyond bulk metals continue to lag in quality compared to global best practice.
India's constraint is not intent or scale, but system discipline across the value chain. Measuring
success by value retained per vehicle, through better design4, organized reuse7, quality
recycling9, and traceability15 can transform fragmented recovery into a circular manufacturing
advantage.