India’s Circular Economy: Lofty Ambitions, Limited Progress

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With India projected to become the world’s third-largest economy by 2030, sustainable development is not only an opportunity for the country to demonstrate global thought leadership but also an imperative for the health and security of its citizens. One pathway to sustainable development is the circular economy. India has introduced policies and institutional initiatives for a circular economy, yet progress remains fragmented, inefficient, and slow.

Generally defined, the circular economy (CE) is a model of production that prioritises waste reduction or elimination at all stages of the product life cycle, from raw materials extraction and manufacturing to disposal and reuse. Material waste is a major challenge in a country as large and economically dynamic as India, where formal and informal infrastructures and practices overlap in inefficient ways. India’s rapid urbanisation, burgeoning waste generation, deferred maintenance, and fiscal stress are straining the country’s waste management infrastructure.

Material waste is a major challenge in a country as large and economically dynamic as India, where formal and informal infrastructures and practices overlap in inefficient ways.

Towering garbage dumps around Delhi-NCR dominate the landscape and cast imposing shadows over nearby communities. These landfills are not mere eyesores; they are epicentres of disease and infection. In an abstract sense, they are also sobering monuments to the outdated and unsustainable paradigm of linear production. Research on Delhi’s Ghazipur landfill estimated its methane emissions to be 15.3 Gg (gigagrams, or 10³ tonnes) annually, accounting for around 1-3 percent of India’s total landfill methane emissions. Additionally, Delhi has experienced a precipitous increase in waste generation, rising from 400 tonnes per day (TPD) in 1999-2000 to 10,470 TPD in 2019-20, over half of which ends up in landfills.

Beyond Delhi, India’s progress on waste management has been uneven at the state and municipal levels. The Central Pollution Control Board (CPCB) report for 2020-21 estimated that India generates approximately 160,038 TPD. Of this, 152,749 TPD is collected, yet only half—around 79,956 TPD—undergoes any treatment. Meanwhile, 29,427 TPD (18.4 percent) is dumped in landfills, and a staggering 50,655 TPD (31.7 percent) remains unaccounted for. The majority of India’s cities lack material recovery facilities and industrial-scale composting units, rendering widespread and centralised recycling unviable. While Bengaluru and Pune have piloted decentralised waste-management programmes, most cities rely on antiquated waste collection and disposal systems.

These stark realities underscore the pressing need for India to reform and modernise its waste-management systems, including paradigms like the CE. While the concept of a CE—minimising waste and maximising resource efficiency—has gained traction in India’s policy discourse, implementation remains sporadic, fragmented, and largely ineffective. Adopting circular models is not only an environmental necessity but also a strategic economic lever, and a better case for the latter should be made to strengthen political support. With the government’s commitment to boost the manufacturing sector under the umbrella of ‘Make in India’, the integration of circular economy principles into industrial production can enhance resource efficiency, reduce costs, and create green jobs.

Adopting circular models is not only an environmental necessity but also a strategic economic lever, and a better case for the latter should be made to strengthen political support.

Policy action

India has made efforts to promote sustainability and CE in the global arena. In March 2025, Jaipur hosted the ‘12^th Regional 3R and Circular Economy Forum in Asia and the Pacific’, a milestone in regional cooperation on waste management. Such forums are helpful, but the urgency of waste management demands a bolder administrative push and regulatory instruments like bans, standards, and taxes. One example is the City Investments to Innovate, Integrate and Sustain (CITIIS 2.0) initiative, which is a sub-component of India’s Smart Cities Mission to integrate CE principles into urban development. In 2024, CITIIS agreements worth over INR 1,800 crore were finalised between the Central and State governments; as part of this effort, 18 cities across 14 states were selected as ‘Lighthouse Projects’. Notably among them, Belagavi secured an INR 135 crore grant to improve its solid waste management system.

While these targeted interventions have potential, the broader challenge lies in scaling such efforts nationwide, ensuring that the CE is embedded in India’s urban planning and governance frameworks. A coordinated effort of such scale would likely contradict the ruling party’s commitment to lean governance and its celebrated ‘Minimum Government, Maximum Governance’ approach. Striking a balance between regulatory oversight and business-friendliness can encourage risk-taking and innovation, enabling CE principles to be translated into action rather than rhetoric.

Policy options for facilitating circular transition include the Extended Producer Responsibility (EPR)—a framework that holds producers responsible for the post-consumption handling and disposal of products that are sold. By shifting the responsibility for the late-stage life cycle of products from consumers to producers, the EPR incentivises circular thinking ‘upstream’, starting with conceptualisation and design rather than end-of-pipe (post-use) actions. India’s Plastic Waste Management Rules, adopted in 2016 (amended in 2018), currently form a legal foundation for the EPR in India, obligating manufacturers and producers to establish systems for sustainable waste collection, segregation, recycling, and disposal. Other frameworks for the EPR in India target waste in electronics, batteries, and tyres.

Striking a balance between regulatory oversight and business-friendliness can encourage risk-taking and innovation, enabling CE principles to be translated into action rather than rhetoric.

Despite the EPR’s potential, implementation has been limited. The most pressing obstacles are financial and logistical. Establishing efficient recycling and disposal systems requires substantial investment from individual producers and, for industry-wide efficiency, coordination on shared infrastructure. Lack of regulatory compliance, weak inter-organisational coordination, and under-resourced monitoring and enforcement need to be addressed through immediate measures to prevent the EPR from becoming yet another sustainability policy tool with limited impact.

Similarly, India’s Right to Repair framework’s consumer focus, intuitive appeal, and strong theoretical basis reflect the high potential for impact; so far, there is minimal evidence linking such regulation with broader circular economy outcomes. Institutionalising such schemes will provide additional opportunities to measure their impact over time.

Challenges and opportunities

Several challenges impede India’s transition from a linear to a circular economy. The first is fragmented and inefficient capacity across supply chains for waste collection, material recovery, and (re)processing. The required coordination is unlikely to emerge only from producers, as the business case for such action is often lacking in conventional measures. To address this issue, the government must provide complementary support for private sector efforts to develop tighter logistics networks and expand capacity for waste processing (i.e., recycling and composting).

Another issue is the role of the informal sector in waste management. The lack of integration between informal waste collection and formal recycling systems results in inefficiencies, lost synergies, resource leakage, and occupational health risks. Without regulatory acknowledgement of and engagement with informal waste collection, policies will be isolated from practical realities.

The economic value of recovered waste and the reduction of waste are well-understood advantages of circularity.

Addressing such challenges is imperative to materialise CE benefits. The economic value of recovered waste and the reduction of waste are well-understood advantages of circularity. More broadly, industry-level and macro-level efficiencies in waste management can reduce resource extraction and environmental stress. Such actions are beneficial not only to businesses but also to urban and national governments seeking to elevate their performance on policy initiatives like the United Nations Sustainable Development Goals. However, to achieve these gains, stakeholders must adopt longer-term measures and use appropriate discount rates to project net benefits. The up-front costs of capital investment and some foregone efficiency in the short term may be discouraging, and a longer-term view is more appropriate for capturing the durable environmental and social benefits of circularity.

The work of policy, however, is incomplete without addressing how these benefits would be distributed. In most cases, disadvantaged and marginalised populations are the first to suffer the negative consequences of economic and systemic changes. Redesigning production systems to accommodate circularity may lead to job losses and displacement. For example, the formalisation of waste collection and a reduction in waste awaiting collection eliminates informal work opportunities. This is not necessarily a fault in the design or approach of circularity but a testament to how employment markets have risen to fill gaps in service delivery. Such cases necessitate retraining, re-employment, and social assistance programmes.

As India’s circular economy activity is projected to reach US$45 billion by 2030 (Kalaari Capital), the transition from a linear production model to a circular one can drive economic growth, job creation, and sustainability-focused innovation. However, liberating this potential requires more than vacuous discourse and gradual policy measures; it demands a fundamental and creative rethinking of how materials and product components are used, reused, and iteratively mined for value. Circularity transition calls for integrated waste management infrastructures, robust support for and enforcement of producer responsibility frameworks, and a reconfiguration of supply chains. There remain legal and policy constraints that require deeper reform to resolve regulatory gaps and the lack of clarity regarding EPR and product design. Updated, streamlined, and adaptive policies will enable a more scalable CE. India can become an example of a rapidly developing economy by abandoning outdated, unsustainable production practices and joining the growing call for a regenerative, resource-efficient future.

Shreyash Sharma is a columnist and collaborates on research with New York University Abu Dhabi.

Kris Hartley is Assistant Professor of Sustainability and Enterprise at Arizona State University, School of Sustainability.

• Developing and Emerging Economies
• Sustainable Development
• India
• CITIIS 2.0 initiative
• india circular economy
• management infrastructure in india
• material waste problem in india
• plastic waste management in india

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