Budget 2025-26: Paving way for sustainable and self-reliant recycling ecosystem

New Delhi: As India gears up for the Union Budget 2025-26, the focus on sustainability and resource self-sufficiency has never been more critical.

The country generates over 3.2 million metric tonnes of e-waste annually, making it the third-largest producer globally. Industry leaders are advocating for strategic policy measures, including a Production-Linked Incentive (PLI) scheme for the recycling sector, a rollback of the GST hike from 5 per cent to 18 per cent on waste management, and increased investment in cutting-edge recycling technologies.

India currently imports over 90 per cent of its critical minerals, exposing the economy to global supply chain vulnerabilities. The upcoming budget presents a pivotal opportunity to build further on the recently announced National Critical Mineral Mission and achieve a self-reliant circular economy.

“India stands at a pivotal moment in its journey toward a recycling revolution, driven by the rapid surge in e-waste generation, which has increased by 73 per cent between 2019 and 2023. The launch of the ‘Critical Minerals Mission’ offers a unique opportunity to address this challenge while building a self-reliant ecosystem for resource recovery,” said Nitin Gupta, CEO and Co-founder of Attero.

“To further accelerate progress, we strongly advocate the introduction of a PLI scheme for the recycling industry. Such a policy would not only incentivise investments in advanced recycling technologies but also facilitate large-scale capacity building, thereby reducing reliance on imports for critical minerals,” Gupta added.

Gupta said that even as China is a dominant supplier of critical minerals, India must adopt policies that promote recycling and domestic production to achieve self-sufficiency. Robust policy support for the extraction and utilisation of critical minerals from e-waste and Li-ion batteries is essential.

“This includes focused efforts on the efficient salvaging of high-value materials such as lithium, cobalt, and nickel from end-of-life products like EV batteries and electronic devices. Such measures would enable a seamless framework that integrates extended producer responsibility (EPR) mechanisms with a strengthened value chain to drive the creation of a circular economy. We also welcome initiatives like the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) programme, and we look forward to complementary measures that promote domestic recycling of EV batteries and other e-waste components,” Gupta said.

Nimit Aggarwal, Founder & Managing Director, EcoEx said that the waste management sector is at a crossroads due to the recent GST revisions.

“The hike from 5 per cent to 18 per cent has introduced significant challenges, particularly for businesses striving to innovate and contribute to sustainability goals. We urge the government to consider rolling back the GST hike in the upcoming budget. Additionally, while the reverse charge mechanism (RCM) is a solution, it has added compliance complexity, especially for SMEs,” Aggarwal said.

He urged the need to streamline RCM further or exempting critical industries like waste management would be helpful, enabling businesses to focus on their core mission.

“A supportive tax regime is essential to drive investment, support innovation, and build robust infrastructure within the waste management sector. We look forward to support from the government to create a balanced GST structure that builds sustainable growth and aligns with India’s environmental objectives,” Aggarwal said.

Abhay Deshpande, Founder and CEO of Recykal applauded the introduction of the Critical Minerals Mission and the anticipated Production Linked Incentive (PLI) scheme in Budget 2024.

“With India heavily reliant on imports for critical minerals, strengthening domestic recycling infrastructure has become a strategic necessity. E-waste and battery recycling are vital for the recovery of rare earth elements and critical minerals, especially as global production is concentrated in a few nations,” he added.

To mitigate this dependency, India must prioritise the development of advanced recycling technologies, financial support for state-of-the-art facilities, and investment in R&D for critical mineral recovery.

“In addition, reducing GST to ‘nil’ for both plastic waste and recycling machinery would significantly incentivize recycling efforts and accelerate the adoption of advanced technologies,” Deshpande said.

The Union Budget 2025-26 has the potential to drastically improve India’s waste management and critical mineral recovery landscape. With global demand for lithium, cobalt, and nickel projected to rise by 500 per cent by 2050, securing a domestic supply chain is imperative.

A balanced and forward-thinking budget will not only drive sustainable economic growth but also position India as a leader in resource efficiency and clean energy transition.

–IANS