India’s import of recyclable materials grows by 71% in 10 years.

In this age when sustainability and circularity are integral parts of the business strategy of an organization, trade-in recyclable articles are growing in leaps and bounds. Companies are increasingly using scrap and recyclable products not only to protect the environment but also to optimize their input cost. India has also witnessed a surge in the growth of recyclable and scrap materials in recent years. According to a UNTCAD study, Indian businesses would be able to reduce their cost by as much as 11% of India’s current GDP accumulating a value addition of more than USD 200 billion dollars by 2030.

The current trend in India’s international trade in the circular economy

?At present recyclable material in India’s total merchandise trade is a mere USD 13 billion contributing just over 1% of its total merchandise trade of which more than 95% constitutes import. In FY 2021-22 India imported around USD 12.5 billion worth of recovered, waste, or scrap goods across different product categories ranging from plastic, rubber, paper and paper products, and Ferrous and nonferrous Metals. In the last decade starting from 2011-12 the import of recyclable material has gone up by 71% from just over USD 7 billion in FY 2011-12. Share of recyclable material in total import primary article grew by 7% over the 2011-2022 time period. ?Scrap from ferrous and nonferrous metals forms the major chunk of India’s total recyclable material imports contributing on average around 80% to total recyclable material imports in each FY for the last decade.

Aluminum waste & scrap is the most imported recyclable material. In FY 2021- 22 India imported around USD 3.5 billion worth of aluminum scrap?representing over 56% of total aluminum imports for the year. Waste and scrap of paper or paperboard at around USD 1.3 billion were the most non-metal recyclable material import contributing around 53% of total paper pulp imports for the country in the same year. The import of both, aluminum waste & scrap and Waste & scrap of paper or paperboard has more than doubled in terms of value in the last decade from USD 1.2 billion and USD 650 million respectively in FY 2011-12. There is a sudden surge in the import of recovered kraft paper in FY 2021-22 at around USD 408 million which was negligible in previous years.?Waste & scrap of stainless steel imports has shown the best growth over the last decade growing by over 165%?from around USD 950 million in 2011-12 to USD 2.5 billion in FY 2021-22, whereas import of Ferrous waste & scrap has declined 41% from USD 2.7 billion in FY 2011-12 to USD 1.6 billion in FY 2021-22 in value terms.??

Conclusion

As trade in recyclable products gathers momentum, India may consider introducing a policy on the import and export of scrap and recyclable products. Such a policy may encourage companies to use recyclable and scrap products in their production process and at the same time, the policy may discourage the import of those scrap materials that may be hazardous to the environment.