Council on Energy, Environment and Water Integrated | International | Independent
Authors:
India is well-positioned to scale circular economy principles, paving the way for environmental conservation, economic growth, and job creation. Aligned with the Lifestyles for Sustainable Development (LiFE) initiative, India embarks on the journey of a circular economy which emphasises closed-loop processes where resources are renewable, and products retain their value and quality for longer durations.
The paper presents a succinct review of technology, policy and private sector development across diverse sectors, such as solar panel production, transitions to batteries, steel value chain, construction and demolition waste, agricultural waste, municipal (domestic) wastewater, and municipal solid waste, where circular economy principles can drive a significant impact.
However, to foster a sustainable and resilient future, challenges related to policy frameworks, infrastructure gaps, market dynamics, and social behaviour must be addressed to help the country foster a more sustainable and resilient future. Further, reliable data on waste generation, composition, and material flows, restricts proactive planning and decision-making.
By fostering innovation, building robust infrastructure, and addressing policy fragmentation, India can overcome the systemic challenges that hinder its transition to a circular economy. Bridging the demand and supply gap requires value-chain-focused targeted interventions backed up by data, technology, and innovative financial mechanisms. The study outlines a comprehensive roadmap to support the circular economy ecosystem and support economic growth and job creation that advance India towards a green transition.
Key highlights
India is experiencing historic economic growth, with its GDP reaching $3.4 trillion in 2023 and a projected growth rate of 7% through 2024. Industrial production and urbanisation are transforming the nation, driving an ever-increasing demand for resources. At this critical juncture, India faces two potential paths: continuing with the traditional business-as-usual approach to industrial development or embracing a more sustainable and regenerative model based on circularity. Circularity refers to an economic system designed to eliminate waste, maximise resource efficiency, and maintain products and materials at their highest utility for as long as possible. This approach minimises environmental externalities while fostering innovation, resilience, and long-term economic growth.
India is uniquely positioned to pioneer a development trajectory that decouples growth from extraction, fossil fuel consumption, and waste to become a global leader in circularity. However, realising this potential will require bold and immediate action from both the public and private sectors. India can create a circular economy that generates economic prosperity and addresses environmental challenges by investing in R&D, improving policy frameworks, mobilising financing mechanisms, and fostering cross-sector collaboration.
This series of sector-specific discussion papers offers actionable guidance for advancing circularity across key sectors. These sectors include solar panels, batteries, steel, construction and demolition, agricultural waste, wastewater, and municipal solid waste. The papers highlight what is needed to shift from linear, import-reliant supply chains to a circular economy, emphasising reuse, repurposing, and in selected sectors of the economy where there is high feasibility. Each chapter provides a comprehensive landscape assessment, identifies market challenges, presents the business case for adopting circular practices, and explores actionable solution pathways to advance circularity within a particular sector.
Although each of the selected sectors in India face distinct challenges, there are key intervention points that can drive circular economy practices across industries. Below are eight critical areas that offer scalable pathways to promote circular economy practices:
A collaborative approach across sectors, supported by innovation, infrastructure, and policy alignment, is key to positioning India as a leader in circular economy practices. This approach will help address environmental challenges while fostering economic growth. The guidance in each chapter aims to help develop regulatory frameworks, promote technology adoption, foster partnerships, and encourage business model innovation, all with the goal of advancing circularity across multiple industries in India. This work serves as a foundational framework, with more detailed techno-economic analysis and sector-specific roadmaps to be developed in upcoming publications.
In India, the concept of circularity is not merely an emerging trend, but is deeply rooted in cultural traditions that prioritise conservation, sustainability, and respect for resources. These long-standing values provide a strong foundation for scaling circular economy principles across the country. This philosophy manifests clearly in daily life. For instance, kabadiwalas, or scrap traders, actively collect and recycle materials such as paper, metals, and plastics from households. Moreover, community initiatives prioritise reducing food waste and adopting practices aimed at minimising resource wastage. These traditions reflect India’s inherent ability to operate with minimal waste, showcasing an existing cultural alignment with the principles of a circular economy.
By integrating these traditional practices with modern infrastructure, innovative policies, and technology, India can uniquely position itself to build a sustainable circular economy. This approach conserves resources and mitigates environmental impacts and honours the country’s cultural values of stewardship and sustainability.
The Indian government has recognised the transformative potential of a circular economy, noting its capacity to drive environmental conservation, economic growth, and job creation. Circularity emphasises sustainable practices, including ensuring ethical working conditions, a priority reflected in India’s Lifestyles for Sustainable Development (LiFE) initiative, which collaborates with various organisations to promote human rights across working environments.
As India embarks on this transition, it stands to unlock significant economic benefits for businesses and citizens alike, while simultaneously addressing critical challenges such as pollution, resource depletion, and waste. By adopting circular practices, the country can foster a more sustainable and resilient future, creating opportunities across sectors and improving the well-being of its population.
A circular economy is an economic system designed to minimise waste and maximise resource efficiency by reusing, repurposing, and recycling materials. It contrasts with traditional linear “take, make, dispose” models by emphasising closed-loop processes where resources are renewable, and products retain their value and quality for extended durations. This approach spans the entire lifecycle of products and materials—from design and production to consumption and end-of-life management—focusing on sustainable practices that enhance resource utilisation, material recovery, and promotion of environmental sustainability alongside economic growth.
Circularity is crucial for India’s sustainable development, energy security, and climate action goals. Embracing a circular economy can foster the growth of new industries, such as recycling, remanufacturing, repurposing, creating jobs, and contributing to sustainable development. Environmentally, circularity reduces emissions, freshwater consumption, and the adverse effects of resource extraction.
To fully realise the ecological and social benefits of circularity, India must address several pervasive challenges that cut across policy, infrastructure, market dynamics, and social behaviour. These issues, though not uniform across all markets, arise from the inherent complexity of circular value chains, which involve multiple actors with varying priorities and challenges. Below are key market barriers that should be strategically addressed.
Fragmented policies, weak enforcement, and inconsistent incentives fail to support the production and adoption of recycled materials effectively. Trade barriers can exacerbate resource shortages and supply chain disruptions, highlighting the need for policies that strengthen supply chains and incorporate circular economy principles to foster sustainable resource management. Furthermore, poor coordination among government bodies often results in overlapping or contradictory policies, slowing the momentum needed for systemic change.
Given the interconnected and global nature of many supply chains, heavy reliance on imported metals and other products heightens supply chain risks. The inability to recycle and reuse materials domestically further exposes these supply chains to disruptions and geopolitical risk.
Without reliable data on waste generation, composition, and material flows, planning and decision-making become reactive rather than proactive. The absence of lifecycle-tracking mechanisms to trace a product from cradle to grave leads to a lack of accountability.
Limited adoption of advanced recycling technologies reduces operational efficiency and recovery rates. Inadequate investments in R&D stifle innovation. This technological gap prevents India from fully capitalising on the opportunities that circular systems can provide.
Inefficient transportation and logistical gaps increase costs, led to delays, and create bottlenecks in waste management systems. Poor handling practices during collection and sorting result in contamination, diminishing the quality and value of materials that could otherwise be reused or recycled.
Quality concerns and a lack of consumer awareness stifle demand for recycled materials. At the same time, high price volatility and slim profit margins deter investments in recycling and resource recovery operations. The absence of robust secondary markets limits scalability, trapping the sector in a cycle of underperformance.
Limited awareness and insufficient capacity-development initiatives restrict community participation, making it difficult to shift consumer behaviour toward sustainable practices. Without broad stakeholder engagement, the circular economy cannot achieve its full potential. Moving forward, India must adopt a comprehensive approach that aligns shared value creation with targeted incentives. By fostering innovation, building robust infrastructure, and addressing policy fragmentation, India can overcome the systemic challenges hindering its transition to a circular economy.
With its unique blend of traditional resourcefulness and emerging technological capabilities, India has the potential to lead globally in circularity, driving sustainable growth and resilience for future generations.
By addressing these challenges, India can transition to a sustainable growth model that balances economic development with environmental conservation. Circular practices not only drive resource efficiency but also transform waste into value, unlocking economic opportunities that align with India’s climate and economic priorities. This transition holds the promise of creating a more resilient and sustainable future for India.
This paper explores the reuse, recovery, processing, and recycling of metals, organic waste, and water, focusing on key sectors where circular economy principles can drive significant impact. The paper is strategically organised by material properties, with chapters sequenced to emphasise synergies between neighbouring sectors and reflect the interconnected nature of differing value chains and sectors. It begins with an examination of solar panel production, transitions to batteries, the steel value chain, and construction waste, and then shifts to agricultural waste. The paper concludes with an analysis of wastewater and municipal solid waste, presenting a holistic view of circularity across diverse sectors. A detailed look at the sectoral descriptions are as follows:
The solar panel value chain focuses on end-of-life recycling, with some discussions of manufacturing and reuse. Recycling is essentially the downstream value chain and includes dismantling (relevant for silicon-based modules and includes junction boxes and aluminium frames), delamination (backsheet, encapsulant, and glass), and metal recovery (silicon, silver, copper, etc.). The recovered materials can feed into other sectors depending on the purity grades. Here, the discussions cover technological and regulatory developments within India while drawing learnings from other major markets. The chapter also emphasises the opportunities in a closed circular economy loop, which will support strengthening the upstream solar value chain by offsetting the mineral requirement of various critical minerals such as silicon and copper.
The battery value chain begins with the upstream extraction of critical minerals like lithium, cobalt, and nickel, essential for production. These materials are then refined and processed in the midstream phase into components such as cathodes and electrolytes, often requiring advanced chemical techniques. In the downstream phase, these components are assembled into battery cells, modules, and packs, primarily for electric vehicles, with manufacturers scaling production to meet growing demand. At the end-of-life stage, batteries are either reused, repurposed for second-life applications, recycled to recover valuable materials, or ideally responsibly disposed of, with reverse logistics systems facilitating efficient collection and processing to support a circular economy.
This chapter covers batteries used in electric vehicles (EVs), consumer electronics like laptops and cell phones, and stationary energy storage systems, all of which share common materials and production processes. Emphasis is placed on EV batteries, as they represent the largest and fastest-growing segment of new demand. This discussions in this chapter address challenges such as inefficiencies in capturing value, waste collection, and the need for improved recycling technologies. It also highlights recommendations for promoting second-life applications, fostering public-private partnerships, and driving regulatory reforms and technological innovations to support battery circularity
The steel value chain covers raw material extraction and ironmaking to steel production, rolling, finishing, and distribution. The upstream phase involves extracting and processing raw materials such as iron ore, coal, limestone, and natural gas, which are often processed into intermediate products like sinter or pellets to enhance metallurgical quality and processing efficiency in steelmaking. The downstream phase involves converting these intermediates into finished steel through sophisticated ironmaking, steelmaking, and rolling processes. Steel is 100% recyclable, allowing it to be systematically repurposed at the end of its lifecycle, supporting a circular economy and reducing environmental impact.
Steel is a versatile material used across various sectors, including construction, infrastructure, automotive, and manufacturing. Notably, the built environment—comprising the construction and infrastructure sectors—accounts for a significant portion of global steel demand and plays a key role in the steel value chain. These sectors’ purchasing choices directly influence demand, resource efficiency, and environmental outcomes. By prioritising sustainable procurement practices and strategically selecting circular, low-emission steel products, end-use consumers can meaningfully contribute to advancing the circularity of the steel value chain.
Construction and Demolition (C&D) waste refers to residual materials from activities taken up during construction, renovation, and demolition of buildings and infrastructure. It may comprise concrete, soil, masonry, stone, metal, wood, glass, plastic, and hazardous substances like asbestos. High-value materials such as metal, glass, and wood are typically salvaged and reused by the industry. However, the bulk of C&D waste comprises of concrete, masonry, and soil, which typically ends up in unsegregated streams that are either used for backfilling or dumped in vacant lands. Today, only a small proportion of construction and demolition waste is diverted to processing facilities for recycling and reuse. This chapter addresses the ways in which policy, infrastructure, and waste management protocols can be improved to achieve a more circular value chain within the construction and demolition sector.
Agricultural wastes refer to materials produced during various agricultural activities and processes throughout the value chain. These wastes may include raw materials, byproducts, or residuals from different stages of agricultural operations. As these materials are no longer useful, they are classified as waste and are typically discarded. Agricultural waste is broadly classified into four categories—crop residues (such as rice straw, wheat straw, and barley straw), livestock waste (including animal excreta and carcasses), agro-industrial processing waste (such as sugarcane bagasse, rice bran, fruit peels, packaging materials, and fertiliser containers), and hazardous or toxic waste (including pesticides, insecticides, and herbicides). Unplanned growth in agricultural production inevitably leads to a rise in the generation of livestock waste, crop residues, and agro-industrial by-products.
The domestic wastewater value chain begins with the generation of domestic effluent, which consists of black water (excreta, urine, and faecal sludge) and grey water (from the kitchen and bathing activities). This wastewater is collected and transported via a sewerage network to wastewater treatment plants managed by local urban authorities. Wastewater treatment involves one or more processes of primary, secondary, tertiary, and advanced levels of treatment. Energy is required to pump wastewater into the sewerage network and in the treatment process. The treated wastewater (TWW) is then either discharged into surface water bodies or repurposed for various uses. Depending on the level of treatment, TWW can be reused for both potable and, more commonly, non-potable applications such as irrigation, landscaping in parks and gardens, road cleaning, vehicle washing, construction, industrial processes, commercial cooling, and water body rejuvenation. TWW is conveyed from treatment plants to the points of reuse through tankers or pipelines. Once reused, the water becomes wastewater again, continuing the cycle. A circular economy in urban wastewater management can improve the quality of local water sources and reduce the consumption of scarce freshwater resources.
The organic waste management value chain encompasses the journey of organic waste from its generation to its final treatment or safe disposal. The process begins with the generation of organic waste from various sources, including households, commercial establishments, and industries. Proper segregation at the source is critical, as it significantly influences the resource recovery from the waste. For instance, if the organic waste is mixed with domestic hazardous waste, it can contaminate the overall waste. Then, the waste is collected and transported to appropriate treatment facilities. The segregated organic waste is then collected and transported to appropriate treatment facilities.
Organic waste can be treated mainly in two ways: aerobic digestion (composting), which results in compost, and anaerobic digestion (biomethanation), which generates biogas and digestate. Compost can be used in various applications, including agriculture, gardening, and horticulture, while biogas can be used for thermal applications and power generation. Biogas can be further purified, processed, and compressed to become Bio-CNG or compressed biogas (CBG). Bio-CNG, with similar properties to natural gas, offers a renewable and cleaner alternative for transportation and industrial uses, accordingly contributing to a circular economy.
These sectors were specifically highlighted, given their outsized role in supporting economic development, environmental preservation, and social equity. Although it is acknowledged that this paper does not encompass every critical sector, the focus reflects a deliberate prioritisation of sectors currently of high strategic importance for government action. Each chapter defines the role of circularity within a specific sector, outlines actionable strategies, and concludes with recommendations for decision-makers. This structure provides a strategic guide for implementing policies, adopting global best practices when applicable, and building resilient circular value chains that support India’s economic growth while promoting sustainability.
Circularity plays a crucial role in achieving the Sustainable Development Goals (SDGs) by fostering an economic system that minimises waste, conserves resources, and optimises material use throughout supply chains. The principles of circularity directly align with SDG 8—Decent Work and Economic Growth, SDG 9—Industry, Innovation, and Infrastructure, SDG 11— Sustainable Cities and Communities, and SDG 12—Responsible Consumption and Production. Additionally, practicing circularity in sectors like agriculture and wastewater supports SDG 2—Zero Hunger, SDG 6—Clean Water and Sanitation, and SDG 14—Life Below Water. By transforming agricultural waste into valuable resources and adopting sustainable water management practices, circular economy principles can reduce environmental impact and enhance food and water security.
Given the wide-ranging impact of circular economy practices, India can address a variety of SDGs simultaneously. By focusing on organic waste management and water conservation, circularity supports reducing hunger, improving water quality, and protecting ecosystems. This is particularly crucial as only 17% of the SDG targets are on track globally. Adopting circular economy principles offers a pathway for accelerated progress, providing environmental and socio-economic benefits that help meet urgent sustainability challenges.
India’s Viksit Bharat @ 2047 vision is closely aligned with advancing sustainability, inclusive growth, and social welfare. These outcomes coincide with the principles of circularity, which will play a crucial role in helping the government meet its commitment to reducing emissions and promoting renewable energy use. Circularity can be a key lever in achieving these objectives by optimising resource use, reducing waste, and fostering a sustainable, low-carbon economy.
India’s G20 Secretariat can play a pivotal role in championing circularity within India by partnering with government ministries and regional actors to emphasise its importance. Circularity offers a unique opportunity to balance rapid industrialisation with sustainability, fostering long-term economic resilience and environmental stewardship.
Unlike many Western economies, which have traditionally followed a linear take-make-dispose model, India’s societal values and traditional practices inherently align with circular principles. This alignment, combined with India’s entrepreneurial spirit and innovative drive, positions the country uniquely to lead on this critical development. By integrating circularity into economic growth strategies and fostering innovation across critical sectors—such as agriculture, water, energy, and manufacturing—India can solidify its position as a global pioneer in sustainable development, setting a benchmark for others to follow. These practices will also play a pivotal role in advancing India’s energy transition and climate goals while generating new employment opportunities and driving inclusive economic growth.
This paper outlines a vision for embedding circularity into India’s economic strategy, focusing on the solar, battery, steel, construction, agriculture, wastewater, and municipal solid waste sectors. By leveraging recognised tools, best practices, and standards, while fostering innovation, stakeholder collaboration, and workforce development, India can build resilient circular value chains. Through decisive action, India has the potential to lead globally in sustainable development, transforming challenges into opportunities while addressing critical environmental and economic imperatives.
Cross-sectoral systemic challenges exist that hinder the expansion of circular value chains- policy and government coordination, supply chain vulnerabilities, lack of traceability, inefficiency and stagnated innovation development, infrastructure and logistics deficiencies, low economic viability and market development, and social and behavioural barriers.
India’s Lifestyles for Sustainable Development (LiFE), Swachh Bharat Mission, Draft National Resource Efficiency Policy, introduction of Extended Producer Responsibility(EPR) framework for various waste management regulations, and Resource Efficiency and Circular Economy Industry Coalition (RECEIC) launched during the 4th G20 Environment and Climate Sustainability Working Group (ECSWG) and Environment and Climate Ministers meeting during India’s G20 presidency.
Overarching interventions that advance recycling technologies and circular product designs can promote infrastructure development, enhance traceability, provide cohesive policy frameworks, increase investments in circularity, develop capacity, and boost cross-sectoral collaboration, enabling a circular economy transition across sectors.
Mainstreaming circularity can directly improve progress towards SDG 8—Decent work and economic growth, SDG 9—Industry, innovation, and infrastructure, SDG 11— Sustainable cities and communities, and SDG 12—Responsible consumption and production. Additionally, practising circularity in sectors like agriculture and wastewater supports SDG 2—Zero hunger, SDG 6—Clean water and sanitation, and SDG 14—Life below water.
The report identifies solar panels, batteries, steel, construction and demolition, agriculture waste, wastewater, and organicwaste as key sectors that could lead the transition to a circular economy.
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