The Ministry of Road Transport and Highways (MoRTH) signed memorandums of understanding with Volvo Eicher Commercial Vehicles (VECV), Force Motors and Pinnacle Mobility Solutions on 29 June 2026, bringing these manufacturers into the Cabinet-approved Delhi-NCR Vehicle Replacement Scheme. This takes the total number of participating original equipment manufacturers (OEMs) to nine, with a combined market share of more than 95% in the trucks and buses segment. The scheme, with a total outlay of ₹9,585 crore, targets the replacement of over 2.07 lakh old commercial vehicles across the National Capital Region to curb vehicular pollution.
The Delhi-NCR Vehicle Replacement Scheme
The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the two-year Delhi-NCR Vehicle Replacement Scheme on 3 June 2026. The scheme is designed to incentivise owners of trucks and buses registered in Delhi-NCR that comply with BS-IV or older emission norms to replace them with BS-VI compliant or electric vehicles.
The scheme is funded through the National Capital Region Planning Board (NCRPB) under the Ministry of Housing and Urban Affairs (MoHUA) and implemented jointly by the Ministry of Road Transport and Highways (MoRTH) and the Ministry of Petroleum and Natural Gas (MoPNG). The four participating states and Union Territory are Delhi, Haryana, Rajasthan and Uttar Pradesh.
The total financial outlay of ₹9,585 crore includes ₹5,041 crore from the Central Government and an estimated ₹1,601 crore in tax concessions from the participating states. The scheme targets approximately 1.91 lakh trucks and 16,329 buses currently operating in the region under older emission categories. The government has stated that a single pre-BS vehicle emits as much pollution as 14 BS-VI compliant trucks, highlighting the environmental imperative behind the programme.
Three More OEMs Join the Scheme
The MoUs signed on 29 June 2026 add three more manufacturers to the list of participating OEMs. Volvo Eicher Commercial Vehicles (VECV) is a joint venture between the Volvo Group of Sweden and Eicher Motors Limited, formed in 2008 and headquartered in New Delhi. VECV operates through its business unit Eicher Trucks and Buses and also distributes Volvo trucks in India. Force Motors Limited, founded in 1958 and headquartered in Pune, is India’s largest van manufacturer and is known for brands such as the Traveller, Trax and Urbania. Pinnacle Mobility Solutions Private Limited, established in 2019 and based in Pune, manufactures electric commercial vehicles under the brand name EKA Mobility and has technology partnerships with Netherlands-based VDL Group and Japan’s Mitsui & Co.
Under the agreement, each OEM will offer an 8% discount on the ex-showroom price of eligible trucks and buses purchased through the scheme. For electric vehicles, the discount will be capped at the rate applicable to an internal combustion engine vehicle of the equivalent gross vehicle weight category. These three join six OEMs that signed MoUs earlier, including Ashok Leyland, Switch Mobility, Tata Motors, Mahindra and Mahindra, SML Mahindra and Daimler India Commercial Vehicles (DICV). With nine OEMs now on board, the scheme commands a combined market share of more than 95% in the trucks and buses segment, ensuring that vehicle owners across Delhi-NCR have access to replacement vehicles from virtually every major manufacturer.
Incentive Structure for Vehicle Owners
The scheme offers a multi-layered incentive package that combines central government support, state-level tax benefits and manufacturer discounts. The table below summarises the key benefits available to eligible vehicle owners:
| Benefit Provider | Incentive | Duration |
|---|---|---|
| Central Government | 5% interest subvention on vehicle loans for replacement vehicles | 5 years from registration |
| Central Government | Monthly fuel vouchers of up to ₹4,800 depending on vehicle category | 5 years from registration |
| Central Government | Lump-sum benefits for electric vehicle purchases or Certificate of Deposit trading | One-time |
| Participating OEMs | 8% discount on ex-showroom price of eligible trucks and buses | At point of purchase |
| State Governments | Up to 100% concession on motor vehicle tax for new vehicles | 10 years |
| State Governments | 50% concession on motor vehicle tax for used BS-VI vehicles | 10 years |
| State Governments | Waiver of registration fees for eligible beneficiaries | One-time |
| State Governments | Waiver of pending liabilities on old vehicles enrolled in the scheme | One-time |
The Central Government’s benefits will continue for five years from the date of registration of the replacement vehicle, providing sustained financial support beyond the scheme’s two-year enrolment window. The monthly fuel vouchers, disbursed through Oil Marketing Companies (OMCs), are designed to offset the running cost pressure during the transition to newer, cleaner vehicles.
Eligibility and Replacement Rules
The scheme is open to owners of trucks and buses registered in Delhi-NCR that comply with BS-IV or older emission standards. The eligibility and scrapping requirements vary depending on the vehicle’s emission classification:
| Vehicle Category | Requirement | Replacement Option |
|---|---|---|
| BS-III and older | Mandatory scrapping at Registered Vehicle Scrapping Facilities (RVSFs) | Must purchase and register BS-VI or electric vehicle within NCR |
| BS-IV | Either scrap at RVSF or sell outside NCR in non-NCAP cities or towns | Must purchase and register BS-VI or electric vehicle within NCR |
Stricter norms apply in Delhi: Light goods vehicles purchased under the scheme in Delhi must be fully electric. Buses in Delhi must be either BS-VI CNG or fully electric. Government-owned vehicles are excluded from the scheme entirely.
Vehicle owners who opt for scrapping can also generate value through Certificates of Deposit issued at authorised scrapping facilities, which can be traded or used to avail further benefits on new vehicle purchases.
Implementation and Monitoring
The scheme will be administered through a fully digital integrated portal that enables real-time eligibility checks, automated interest subvention claims, monthly fuel voucher credits and monitoring of pollution reduction outcomes. This digital platform is designed to ensure transparency and streamline the application process for vehicle owners.
Oversight of the scheme rests with an Empowered Committee chaired by the Cabinet Secretary, with members including the CEO of NITI Aayog, secretaries of MoHUA, MoRTH, MoPNG and the Department of Financial Services, as well as chief secretaries of the participating NCR states. The member secretary of the NCR Planning Board serves as the member convenor. At the district level, District Collectors and District Magistrates are responsible for implementing and monitoring the scheme on the ground.
The enrolment window remains open for two years from the date of notification, while central government benefits continue for five years from the date of registration of the replacement vehicle, ensuring that the scheme’s impact extends well beyond the enrolment period.
Key Takeaways
- The Ministry of Road Transport and Highways (MoRTH) signed MoUs with VECV, Force Motors and Pinnacle Mobility Solutions on 29 June 2026 under the Delhi-NCR Vehicle Replacement Scheme.
- A total of nine OEMs have now joined the scheme, commanding a combined market share of more than 95% in the trucks and buses segment.
- The Union Cabinet approved the scheme on 3 June 2026 with a total outlay of ₹9,585 crore, comprising ₹5,041 crore from the Centre and ₹1,601 crore in state tax concessions.
- The scheme targets replacement of approximately 1.91 lakh trucks and 16,329 buses registered in Delhi-NCR that comply with BS-IV or older emission norms.
- Participating OEMs offer an 8% discount on ex-showroom prices, while the Centre provides 5% interest subvention on loans and monthly fuel vouchers of up to ₹4,800 for five years.
- Participating state governments provide up to 100% motor vehicle tax concession for new vehicles and waiver of registration fees for ten years.
- In Delhi, light goods vehicles under the scheme must be electric, while buses must be BS-VI CNG or electric only.
