Dispersive soils considered as highly erodible soils; as they contain a high amount of exchangeable sodium ions results in segregation eventually leads to the dispersion of particles with moisture variations. Numerous failures have been observed worldwide where these soils exist and prior to any construction activities suitable methods have to be adopted to modify its properties. Plastic waste has emerged as a significant environmental concern worldwide has its impact on various ecosystems and natural resources. In the present study, the PET (Polyethylene terephthalate) bottles are shredded into rectangular strips in two different sizes are added into the dispersive soil at various percentages from 0.2 to 0.8% to enhance their properties. The performance of stabilized soil is evaluated by conducting light compaction test (LCT) and California bearing ratio (CBR) tests. The optimum fibre content as obtained from strength tests is 0.4% (for 10 mm long strips). In comparison to the untreated soil, the overall pavement thickness is significantly reduced with improved subgrade. The actual strains on pavement layers were computed by IITPAVE software to ascertain the optimum thickness for untreated and treated subgrade. The shredded PET bottles used in present study were found effective in enhancing the subgrade properties for low-volume roads (LVR) and also serve as a sustainable disposal solution.