January , 2019
Metal recycling sector needs to be recognised as an industry
13:14 pm

Saptarshi Deb

India has wide scope for the metal recycling sector.

According to recent industry estimates, the widely unorganised and fragmented sector has the potential to register an annual growth rate of 11.4% till 2020. On the flipside, the government is yet to recognise metal recycling as an industry. The sector presently employs around 1.75 million people and contributes around 2% of the national Gross Domestic Product (GDP). The recognition of this sector as an industry will give a strong push to it and its stakeholders. Leading the drive for its industrial recognition is the Mumbai-based Material Recycling Association of India (MRAI).

Speaking to BE, Vijay Agarwal, Director, MRAI, stated, “Indian traditions encourage recycling. Our organisation wants to create a greener and cleaner earth by promoting recycling of all recyclable commodities in India, converting waste to wealth and becoming the primary force that helps to reduce or minimise carbon emission and protect natural resources for sustainable and economic benefits.” The goal of the organisation also finds resonance with the Swachh Bharat movement of the central government. Apart from the environmental implications, there is a distinct economic angle as well. According to the Federation of Indian Chambers of Commerce & Industry (FICCI), India imported 4.9 million tonnes of metal scrap in 2013-14 and 26.9 million tonnes of scrap was generated in India in 2013-14. The same report indicated towards a demand-supply mismatch as India imports around 9-10 million tonnes of metal scrap every year at an average. Given the size of the Indian economy, there is ample scope of import substitution in this sector by enabling necessary legislation and policy focus. MRAI had been one of the prime pushers of the newly drafted National Recycling Policy, which is awaiting legislative approval. This policy, when implemented, can significantly aid the metal recycling industry.

Speaking to BE on the side-lines of the inauguration of the Eastern Chapter of MRAI, Sanjay Gadia, President, MRAI, Eastern Chapter said, “At present, majority of aluminium scrap, the key raw material for the secondary aluminium processing industry and the automobile industry, is mainly imported due to unavailability of quality scrap in India. For many years, there was no import duty on the aluminium metal scrap but in 2013, the government imposed a 2.5% import duty. We would like to urge the government to waive this import duty on aluminium scrap.”

India’s annual scrap consumption is around Rs. 750 billion (20.40 million tonnes) and it imports 6.48 million tonnes (in 2016) of scrap at an estimated value of Rs. 390 billion to become the world’s third largest importer of scrap. With a CAGR of 11.4%, the sector is poised to take the consumption to 30.03 million tonnes by 2020. However, India’s recycling rate is less than 20% and it is dismally low as compared to other countries, which have accepted recycling as a as a sustainable business model. India also has lower scrap utilisation rates and lower collection rates as against developed economies such as Turkey, Europe or the U.S.A. Focused policies aimed at encouraging the metal recycling sector and it diverse stakeholders in India will augment well for the Indian economy. It will entail significant import substitution and also create employment opportunities as the sector is labour intensive. On the environmental front, encouraging metal recycling will save energy and reduce the need of mining and will also ensure that metal products are not simply wasted in landfills. Organisations like MRAI can go a long way in popularising metal and material recycling but industry recognition will improve the process.


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