While the government has placed its bet on strengthening the manufacturing base in the Budget, India’s industrial and environmental ambitions might get a boost by scaling up its metal recycling sector, experts said.They also recommended providing the sector with infrastructure status, rationalising GST rates, and bringing the large informal sector into the mainstream.
As a late starter in this industrial space, the country’s scrap generation is relatively low. A large share of domestic scrap consumption of ferrous and non-ferrous metals is met through imports.
“With exporting countries tightening policies to keep scrap for domestic consumption, local scrap generation and recycling, without placing undue pressure on natural resources, needs to be encouraged and strengthened to boost self-reliance and “Make in India” initiative,” Former SAIL CMD Anil Kumar Choudhary said, “The importance of scrap recycling cannot be overstated. It is not just a mechanism of waste handling. Energy reduction, environmental conservation and Material preservation are all greatly improved by Recycling.
Former SAIL CMD Anil Kumar Choudhary said, “The importance of scrap recycling cannot be overstated. It is not just a mechanism of waste handling. Energy reduction, environmental conservation and material preservation are all greatly improved by recycling. Through policy support, India can further develop an efficient, India today produces 85% lead, 80% stainless steel, 47% steel, 40% copper, 33% aluminium, and 10% zinc through recycling of scrap, mostly by secondary players, according to MRAI.
India today produces 85% lead, 80% stainless steel, 47% steel, 40% copper, 33% aluminium, and 10% zinc through recycling of scrap, mostly by secondary players. However, scrap consumption to the tune of 90% for both zinc and aluminium, 70% for stainless steel, 25% for steel and 15% for lead is met through imports.
Efficiency Edge
Meanwhile, making steel from scrap requires 60-75% less energy and emits 58% less.
Producing aluminium through recycling requires only 5% of the energy required for primary production and emits over 90% less CO₂. Production of aluminium through recycling requires only 5% of the energy required for primary production and emits over 90% less CO₂. These environmental benefits align with India’s Net Zero 2070 goals and NITI Aayog’s Circular Economy Roadmap.
Industry sources said domestic scrap availability can be improved by incentivising Registered Vehicle Scrapping Facilities (RVSFs) and strengthening white goods and appliance recycling, which can significantly enhance feedstock supply. Extended Producer Responsibility (EPR) is also expected to support higher scrap recovery; however, its impact will depend on effective implementation, given the complexity of compliance mechanisms involved.
Recognising the need for promoting scrap recycling as one of the fastest and most affordable ways to reduce emissions, the government has implemented EPR, scrap policies, and other incentive schemes. However, proper implementation remains wanting. Circular economy goals are being advanced through Circular Economy Action Plans covering 10 waste categories and Extended Producer Responsibility (EPR) frameworks for multiple waste streams, supported by centralised digital portals.
These initiatives have helped. Indian steel mills’ usage of scrap has jumped impressively from 24 MT in 2021 to more than 34 MT in 2024. However, steel produced through this route accounts for less than 20% of total production, well below the global average of 30-32%. India’s aluminium scrap consumption has increased significantly, with imports growing at an 8.6% CAGR over the last decade, reaching nearly two million tonnes in CY25, driven by rising demand for secondary aluminium and sustainability initiatives.
Policy as a Catalyst
“To make the recycling sector more vibrant and competitive, targeted fiscal support is essential. This includes rationalising GST on recycled materials, easier access to low-cost finance for setting up organised recycling facilities, and incentives for investment in modern shredding, sorting, and processing technologies. Support through PLI schemes for secondary raw materials, along with tax benefits for using recycled content, can significantly improve viability and scale,” said Amar Singh, Secretary General, MRAI.
The recycling sector is seeing increased interest from new and organised players in metals recycling, driven by rising demand for low-carbon materials, commitments to a circular economy, and India’s manufacturing growth. Policy clarity, ease of compliance, and stable scrap availability will further accelerate this trend. “Large industrial groups are also increasing their participation in steel recycling, especially as decarbonisation, ESG commitments, and circular economy goals become more central to corporate strategies. Their participation can bring scale, technology, and formalisation to the sector. However, it is important that policy frameworks ensure a level playing field, so that MSME recyclers, who form the backbone of the recycling ecosystem, are strengthened rather than crowded out,” said Mehta.