How to turn India's e-waste problem, third largest, into opportunity? Simple: Offer industry incentives!

By Rajiv Shah

How should one interpret a major problem that may be bogging down a private consultant while preparing an industry-friendly report on a situation that adversely impacts society—especially when the consultant sees little possibility of progress in the supposed desired direction?

Simple: call it an "opportunity" that the industry must seize, even providing an estimate of how big the opportunity could be.

And how does the consultant suggest the industry should reach this "opportunity"? By ensuring that the Government of India introduces incentives to turn it into a profitable business. It's as simple as that!

I recently received a report from Redseer Strategy Consultants, which calls itself "India’s premier strategy consultancy firm" with a global footprint. The report claims that India’s e-waste holds a "$6 billion economic opportunity", pointing out that this so-called opportunity has emerged because "e-waste generation in India has doubled since FY14, driven by urbanization and rising incomes."

The 53-page report, full of graphs, advocates for this "opportunity" while also acknowledging major issues. However, it refuses to elaborate on how these issues should be addressed—except through government incentives.

One key issue: "Only 16% of consumer e-waste is processed by formal recyclers, while informal channels handle 60-70%, leading to inefficiencies and environmental hazards."

Another: Despite projections (whose sources remain unclear) of 17% CAGR growth in the formal recycling sector by FY35, it is expected to handle just 40% of India’s e-waste a decade from now.

This situation persists despite the Government of India introducing Extended Producer Responsibility (EPR) in 2011 to build a "sustainable e-waste management ecosystem." Initially voluntary, EPR has since evolved into a "mandatory system with defined collection targets for producers." Yet, the report regrets that "gaps remain due to low minimum EPR fees and insufficient formal recycling capacity."

Ironically, the report does not seem to view India’s status as the world’s third-largest e-waste producer (after China and the U.S.), with e-waste doubling from 2 MMT in FY14 to 3.8 MMT in FY24, as a serious problem. Instead, it calls it an "opportunity."

According to the report, "efficient e-waste metal recovery could cut India’s metal imports by $1.7 billion." However, it does not explain why this is unlikely to happen even a decade later. Is it due to a lack of industry incentives—despite the sector already benefiting from significant subsidies? Instead, the report merely states that there is an "urgent need for structured e-waste management and increased formal recycling infrastructure to unlock the sector's full potential."

The report highlights that "the consumer segment contributed nearly 70% of total e-waste in FY24." It also notes a key trend: while appliances are becoming more compact and lightweight, the sheer volume of discarded items is increasing, making efficient recycling strategies essential.

So why is the formal e-waste sector failing to grow? The report explains: "The sector faces stiff competition from informal players who benefit from lower compliance costs and extensive collection networks. An estimated 60-70% of consumer e-waste is processed through informal channels, leading to unsafe extraction methods, environmental pollution, and health risks for workers."

Additionally, the report notes that "10-15% of e-waste remains stored in households, and 8-10% ends up in landfills, reducing overall recycling efficiency." It further admits that "current technologies can extract only 60-65% ($3.6 billion) of potential value, while the current extraction by formal and informal recyclers amounts to just $1.1 billion."

It adds: "While formal recyclers account for only 25-30% of extracted metal value, they recover just one-third of the total potential. The remaining two-thirds are processed through informal channels, leading to inefficiencies and lost economic value."

Despite the formal sector's lack of effectiveness in managing e-waste, the report insists that only formal recyclers can handle the problem properly:

"Strengthening formal recycling networks is key to improving metal recovery rates and maximizing returns. This could slash India’s metal import demand by up to $1.7 billion while ensuring a steady supply of high-value recycled metals."

To transform India’s e-waste problem into an "opportunity," the report urges the Government of India to strengthen regulatory enforcement and incentivize circular economy practices. These incentives, it argues, "will be crucial for sustainable economic and environmental benefits."

Only then, it claims, will "the right policy push lead to a significant reduction in reliance on metal imports, helping India itself as a global leader in e-waste recycling." And that is this "right policy push"?

Let me quote: "Targeted subsidies or tax benefits to encourage investments in advance facilities and technology"!

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