The government’s move to raise fitness test fees for older vehicles is expected to support India’s vehicle scrappage plans and gradually boost demand for new commercial vehicles, according to Kumar Rakesh, India Analyst – Auto & IT at BNP Paribas.

Speaking to CNBC-TV18, Rakesh said the scrappage policy has existed for a few years but has not yet triggered major replacement demand. However, the latest step — a steep hike in fitness certificate fees for vehicles older than 15 years — could help accelerate the shift.

With the higher fitness cost, he expects “more of scrappage happening in the country, and incrementally driving more positive demand for the new vehicle purchase.”

Under the new rules , the age slab for higher fitness-test fees has been shifted from 15 years to 10 years. The

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