Indian Finance Minister Nirmala Sitharaman says the move will help reduce pollution levels, especially in bigger cities where air quality is a huge problem.
The government has signalled that the policy will initially be voluntary, while it's raised the spirits of the automotive sector, which has struggled amid the pandemic.
The new policy will see any vehicle that's 20 years or older undergo a test to assess roadworthiness. Those that fail will be sent to the junkyard. Unfit vehicles will also be wiped from India's registration database, and anyone caught driving them will be face hefty fines.
Indians wanting to run cars not deemed road worthy will be forced to shell out large sums to put them right, with costs predicted around $550, plus a string of taxes including road and green tax.
“The financial cost of keeping the old car ready for roads would become so high that it would discourage the owner from renewing the fitness certificate once it expires,” said Ratan Tandon, an automotive expert in New Delhi.