Wanted for India: a circular economy

This article is a perspective on why India needs a circular economic model if it is to continue growing as an economy. It also discusses the challenges that our country faces on the levels of product design and management, governance machinery, social acceptance and availability of necessary technology. The author makes well-reasoned arguments that are not crowded with jargon to make a case for India to move towards a circular economy.

India can be clean only if there is a proper circular economy in place providing environmental, social and economic benefits. A circular economy faces global challenges, which are inherent to the process, like uncertainty in the quantity and quality of the returned products and the time uncertainty associated with product return.

However, these challenges become more pronounced in India because of the extended life and poor maintenance of the products. The big challenge for a circular economy is the disassembly of the used products as this is the first technical step for the circular economy after the collection of products. Unfortunately, the products are designed for the ease of assembly and a lot of research has been done on the ease of assembly, which has led to many tools and methodologies for economical assembly. The research on design for disassembly has also started but the outcomes are not yet mature enough to be applied by industry.

There is huge potential for the circular economy. Take the case of PET (Polyethylene terephthalate) plastic. The estimated size of the recycled PET business in India is $400-550 million.

According to NCL (National Chemical Laboratory) and PACE (PET Packaging Association for Clean Environment), India has a 90 per cent recycling rate of PET, which is higher than Japan (72 per cent), Europe (48 per cent) and the United States (31 per cent). PET waste in India is recycled by the organised sector (65 per cent), unorganised sector (15 per cent) and reused at home (10 per cent).

dors selling used garments in Delhi’s Raghubir Nagar

Vendors selling used garments in Delhi’s Raghubir Nagar. Photo: Vikas Choudhary

Challenges to circular economy

There are institutional, technical, managerial, and social challenges to the circular economy.

The institutional challenges are more important if the circular economy has to take wings. Here, the role of government or government agencies is important. The government has to plan for and create infrastructure and if required, should invest in the technology creation.

Decisions like the number of recycling centres and their location, the use of recycled material, etc are important. If these decisions are not taken properly, then recycling centres gets disorganised and become unprofitable for the organised sector.

Take the case of WEEE (Waste Electrical and Electronic Equipment) recycling in India. Many of the designated or approved recycling centres are non-functional. But a huge amount of WEEE is recycled in the unorganised sector.

The location of recycling centres away from the cities may not be a workable solution. The concept of urban factories should be explored with proper technology. The lack of legislations, proper enforcement of legislations and uncertain future legislations are important governmental challenges leading to the lack of top management commitment at the industry level.

At the planning stage, government should not undermine the importance of technology creation, particularly indigenous technology. The government has planned for electric vehicles. But has it thought of safe battery recycling or disposal? Technological challenges are huge in the recycling sector, if recycling is to become socially acceptable, environment friendly and economically viable. There are many online videos and stories which reflect highly unsafe WEEE recycling, which is too damaging for the environment because the focus is only on the recycling of gold or some other particular metals. This is leading to air, soil and water pollution.

The story is similar for other sectors. To bring home the importance of technology, take the example of stubble burning (disposal) in the northern states of our country. Can we not develop technology for the safe recycling of stubbles? Has the government involved all stakeholders in technology development, particularly farmers?

The governments should plan proper buyback laws that clearly mention the collection, refurbishing, remanufacturing, recycling, and disposal methods for the product. This may force the businesses to partner with the government for recycling technology development.

There is a scarcity of what we can call as circular economy managers/advisors, who can plan reverse logistics or integrated logistics activities. Even developed countries like Germany are facing a human resource crunch in this sector as is evident from one of our studies in 2011. India can take a lead if there are proper technical courses in this sector. Proper courses can be designed at all the three tiers of technical education.

Two important social challenges are the lack of awareness and lack of public pressure. The public pressure to unscientific disposal of CFLs, LEDs, WEEE, etc, which are very harmful to all critical human organs when disposed of as municipal waste, is hardly evident.

Government officials, if not fully aware of the latest technologies and options available for the recycling of hazardous products, will formulate obsolete plans and wasteful public funding.


There are two important reasons for governments in India to focus on circular economy: one, there is huge potential to create jobs for unskilled/semi-skilled population; and two, Swachh Bharat.

India can be clean only if there is a proper circular economy in place providing environmental, social and economic benefits to the nation and its people. Government should bring together various stakeholders including non-profits, social scientists and technology experts to plan and design circular economies for various sectors.

The circular economy should not be thought of just in terms of environment and social benefits as it has huge economic benefits. The first priority should be economic benefits. After all, industry is not there to save the environment and society but to make money. If circular economy is planned and designed for environmental and social benefits, there is more probability that it will remain as a mission executed as pilot plans, and will never be executed in totality.

This article was originally written by Kuldip Singh Sangwan for Down to Earth magazine and can be found here.