Cost of Setting Up an RVSF in India (Realistic & Ground-Level Breakdown)
Setting up a Registered Vehicle Scrapping Facility (RVSF) in India is a capital-intensive, compliance-driven project. The total investment varies widely based on land location, capacity, mechanization level, and state-wise compliance norms. Below is a practical, decision-ready cost framework—the kind investors, MSMEs, and lenders actually use.
RVSF approvals are governed under the Vehicle Scrappage Policy notified by Ministry of Road Transport and Highways (MoRTH), with execution routed through state authorities and SPCBs.
Total Investment Range (India)
₹1.5 Crore to ₹8Crore+
(excluding optional shredders; including core compliance and machinery)
Land Cost (Biggest Variable)
₹20 lakh – ₹3 crore+
Minimum land: Typically 4,000–6,000 sq. meters (state-specific)
Zoning: Industrial or approved use only
Location impact:
Tier-2/Tier-3 industrial belts: lower acquisition/lease cost
Metro/NCR belts: premium pricing
Tip: Long-term lease is acceptable in many states and significantly reduces upfront cash burn.
Hidden risk: Land not converted to industrial use → pollution consent objections → project delay.
Civil Construction & Infrastructure
₹30 lakh – ₹1.2 crore
Includes:
Impervious concrete flooring (oil/soil protection)
Covered dismantling shed
Drainage & oil-water separators
Storage bays for batteries, oils, tyres
Office, security, and boundary wall
Compliance lens: SPCBs scrutinize flooring, drainage slope, and containment more than aesthetics.
Machinery & Equipment
₹40 lakh – ₹2.5 crore
Basic setup (manual/semi-mechanised):
Vehicle lifts, cutters, cranes
Fluid drainage kits
Tooling & safety equipment
Cost: ₹40–70 lakh
Advanced setup (MoRTH-preferred):
ELV depollution line
Hydraulic shears
Forklifts, balers
Cost: ₹1.2–2.5 crore
Shredder units (optional) can add ₹3–6 crore and may shift pollution category.
Pollution Control & Environmental Compliance
₹15 lakh – ₹40 lakh
Mandatory costs include:
Consent to Establish (CTE)
Consent to Operate (CTO)
Oil separators, waste tanks
Hazardous waste storage
Authorized recycler tie-ups
Reality check: Under-budgeting here is the #1 reason for RVSF rejection or re-inspection.
Fire, Safety & Utilities
₹5 lakh – ₹15 lakh
Fire NOC & extinguishing systems
Electrical safety & load approvals
Water & power connections
CCTV & access control (often required)
Professional, Approval & Consultancy Fees
₹5 lakh – ₹15 lakh
Covers:
Project reports & layouts
Pollution applications & replies
State transport approvals
MoRTH portal coordination
Strategic value: Strong documentation shortens approval timelines and de-risks inspections.
Working Capital (First 3–6 Months)
₹20 lakh – ₹60 lakh
Staff salaries
Utilities & consumables
ELV procurement logistics
Waste disposal & compliance renewals
📊 Investment Summary Table
| Component | Approx. Cost |
|---|---|
| Land | ₹20L – ₹3Cr |
| Construction | ₹30L – ₹1.2Cr |
| Machinery | ₹40L – ₹2.5Cr |
| Pollution & Compliance | ₹15L – ₹40L |
| Fire & Utilities | ₹5L – ₹15L |
| Professional Fees | ₹5L – ₹15L |
| Working Capital | ₹20L – ₹60L |
| Total | ₹1.5Cr – ₹8Cr+ |
📈 Profitability Snapshot (Investor View)
Break-even: 24–36 months (efficient operations)
Revenue streams:
Scrap metal resale
Recyclable components
Certificates of Deposit (policy-linked)
ROI improves significantly with:
Higher ELV throughput
Advanced depollution systems
Strategic location near OEM hubs
Cost Traps to Avoid
Assuming “Green category” to cut pollution costs
Buying machinery before CTE approval
Generic DPRs not aligned to RVSF activities
Ignoring state-specific SPCB interpretations
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