The Ministry of Road Transport and Highways has signed Memorandums of Understanding (MoUs) with Mahindra & Mahindra and SML Mahindra under the government's vehicle replacement programme for the Delhi-NCR region, covering the replacement of ageing trucks and buses in India.

The Mahindra Group companies join other manufacturers that signed MoUs with the government earlier in the same week, including Ashok Leyland, Switch Mobility, and Tata Motors.

Under the scheme, manufacturers will offer price discounts on new vehicles, while the central and state governments will provide financial incentives for vehicle replacement. The programme is intended to reduce emissions from older commercial vehicles and encourage the adoption of newer transport technologies in the Delhi-NCR region.

Collectively, these five companies account for around 75% of India's truck and bus market. The Union Cabinet approved the two-year scheme, with an outlay of Rs. 95.8 billion (US$ 1 billion), to replace old trucks and buses in the Delhi-NCR region as part of efforts to address air pollution. The scheme is being implemented through the National Capital Region Planning Board and aims to encourage owners of BS-IV and older commercial vehicles to shift to BS-VI-compliant or electric vehicles.

In addition to the OEM price reduction, the central government will provide a 5% interest subsidy for up to five years and distribute fixed monthly fuel vouchers to eligible beneficiaries. State governments participating in the programme will provide exemptions of up to 100% from motor vehicle tax for ten years, along with waivers of vehicle registration fees.

The first MoU under the Centre's scheme for the replacement of old trucks and buses in the Delhi-NCR region was signed on Monday between the Ministry of Road Transport and Highways and Ashok Leyland, along with Switch Mobility, making them the first original equipment manufacturers (OEMs) to participate in the programme.

An MoU was signed on June 18th between the Ministry of Road Transport and Highways and Tata Motors for the implementation of the programme. Under the agreement, the automaker is offering an 8% discount on the ex-showroom price of eligible trucks and buses purchased under the scheme.

A study conducted by the Automotive Research Association of India and The Energy and Resources Institute found that the transport sector contributes 14% of PM2.5 emissions, 40% of carbon monoxide emissions, and 63% of nitrogen oxide emissions in the Delhi-NCR region. The study also found that trucks and buses account for 36% of PM2.5 emissions despite representing only 3% of the vehicle fleet.