Why Doesn’t India Recycle Scrap Metal? Or Even Use Much Imported Scrap?

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This is part 1 of a 2-part series on scrap recycling in India, come back tomorrow for part 2.

The downturn in the Chinese economy has claimed another unwitting victim – the scrap metal industry. Already, in the US, scrap dealers are looking to fill a huge export demand gap left by China’s absence as a buyer.

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It’s not as if this has been an overnight development. US exports of ferrous scrap to China (excluding stainless) peaked at 5.5 million metric tons in 2009, and they have fallen every year since.

The fall in iron ore prices forced US scrap exporters to look for new markets to send their metal. Next in line for ferrous exports were India, Turkey, Thailand, Saudi Arabia and Mexico.

After China’s export demand fell even more this year, all eyes turned to the one place with enough population and development to make up that gap: India, the World’s largest democracy.

India’s Scrap Problem

Before economists and scrap dealers sit back and relax, thinking they have found their demand replacement, it’s important to note that India is certainly no China in the context of the recycling market.

Recycling of metals was, and still is, a largely unregulated sector here. There are hardly any laws governing the scrap sector, except perhaps that of e-waste, which came into existence in 2011, and the e-waste law, allege many, remains largely a paper tiger with little actual enforcement.

To claim that the Indian metal recycling sector is still at a nascent stage would be an understatement. To be candid, there was never ever any concerted effort in the last 65 years to utilize tons of non-segregated scrap thrown away everyday by industry; with consciousness of recycling creeping in only recently.

Buzzwords such as carbon footprint and waste of natural resources have only started creeping up into the consciousness of the nation’s 1.2 billion population recently.

Preponderance of Small Firms, Little Organization

The metals recycling business in India is, at best, disorganized and does not enjoy industry status in the eyes of the government. There are no designated collection centers, scrap yards or processing centers. Instead, much of the “waste” is picked up in urban centers even today by waste collectors, which at best, may be described as a cottage industry.

A Frost & Sullivan Metals and Minerals Practice report that was published earlier this year said the Indian Metal Recycling industry was “challenged by key interlocking crises of minimal existence of a metal scrap recycling ecosystem and lack of any domestic laws and legislation that assist and apply to the industry.”

No Viable Domestic Scrap Market

Here’s a classic example: End of Life Vehicle legislation does not exist. Nobody in India has even heard of scrapping/recycling old vehicles even though the vehicle population increases by thousands of new vehicles every day. Then, there’s a protectionist environment in place on the import of metal scrap (including aluminum) – all of which is hurting the existing metal recycling companies.

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Check this out: the overall Indian recycling rate is about 25%. Compare this to the US – which is a net exporter of scrap with recycling rates of 80 – 90% – and Europe, which has recycling rates in excess of 70%.

Comments (12)

  1. Chirag sankla says:

    I want to start with a scrap collection centre but lack knowledge pf where to export this scrap and waste segregated, ,? To which factories in my area or state except this scrap, and what are thelincencing and permits required for this?, can i know any scrap dealers and merchants who purchase scrap near pune , maharashtra, india? Please let mw know by email.. ! We are college students working for this startup, let us know

  2. Sravani says:

    would be more interested to knowabout business

  3. Raj says:

    I m interested in this business, so i would like to know more about this metal scrap thing.

  4. Charles Kemp says:

    I didn’t know that India didn’t recycle scrap metal. That is really interesting. I think it is interesting because there are so many people there that you would think that it was bound to happen. I think it would help their economy out a lot.

  5. Amit says:

    Sankla Sravani where do you stay guys… I am thinking to start a an Alluminium recycling plant..We can come together and discuss on points.. with partnership we can open this business.. recycling rate is cheaper

  6. Jenn says:

    We are scrap metal buyer if there is anyone who’s starting recycling plants

  7. Shaiju Mathew says:

    i like to start a scrap exporting business to india from usa
    i would like to know how to find buyers and sellers do the scrap

  8. Munish dhingra says:

    Sir, i want to start the Scrap business of metals like Aluminium, copper in india near Delhi. it is good for me that i Purchase the Material from india or import from another country. Also suggest that from where i get the scrap low rates in india or abroad.

  9. B Prasad says:

    I am based in London and I have more than 5 years experience in metal scrap Business, if you require any information on the availability of scrap example: HMS 1&2, Auto Shredded ISRI 211 Steel Scrap,Tin scrap,Electric Motor Scrap, Aluminum, copper and brass or any kind of Paper,Cardboard,plastic scrap, i can give you all the information where you can buy direct from the yards in United Kingdom.

    E-mail: dubey_prasad@yahoo.co.uk

  10. Sukhvinder Singh says:

    I am starting copper and aluminum scrap business. Any buyers over there?

  11. Midhun Thomas says:

    I am based in USA and handling Scrap Export to India ,south Asian countries. If anyone interested in starting Recycling business feel free to message for more information to collect procurement

  12. Bradley says:

    Im interested in exporting scrap metal out of South Africa
    Kindly advise me further

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