Despite the sector's promising prospects, challenges remain.
SEATTLE (Scrap Monster): With India ranking as the third-largest producer of electronic waste, after China and the United States, the industry is seeing a surge in opportunities, especially with the strengthening of the Extended Producer Responsibility (EPR) policy. This policy mandates producers to manage e-waste responsibly, creating a structured and accountable framework for disposal and recycling. India's e-waste recycling industry is poised for rapid expansion, driven by technological advancements and regulatory reforms, as per a recent report by India Ratings and Research (Ind-Ra).
The Indian e-waste management market is projected to reach a valuation of approximately $5,198.52 million by 2032, growing at a compound annual growth rate (CAGR) of 13.52 per cent from 2024 to 2032, as per a report by Astute Analytica. This presents a lucrative opportunity for industry players, aligning India with global leaders in e-waste recycling, such as Switzerland, Sweden, and Norway, which have set benchmarks for efficiency in handling electronic waste.
"With dual revenue streams of high-margin EPR revenue and premium-priced ESG positive extracted metals sale, the e-waste recycling industry is poised for an organisation of the historically grey area, traditionally exposing e-waste to sub-standard and environmentally unacceptable conditions posing physical and environmental risks," says Abhash Sharma, senior director, mid corporates, Ind-Ra. He highlights that recent policy amendments, which have nearly doubled the EPR fees per kilogram of e-waste processed by manufacturers, will enhance the financial stability of recyclers, mitigating the risks posed by market volatility.
One of the key advantages of this industry is its low fixed capital outlay. The dismantling-based business model, which primarily involves crushers, dismantlers, and chemical-based extraction solutions, allows for scalability without heavy infrastructure investments. Established players with patented recovery technologies are likely to maintain a competitive edge, while new entrants may face higher research and development costs to optimize their operations.
Despite the sector's promising prospects, challenges remain. The unconventional business model of e-waste recycling, which lacks a standard cost-plus markup approach, makes profitability highly susceptible to fluctuations in metal prices. However, Ind-Ra suggests that a more robust EPR framework, which includes a broader product portfolio and specified fees for processing, will help stabilize revenues. Additionally, the use of hedging strategies can further mitigate risks associated with volatile commodity markets.
The report also underscores the untapped potential of EPR revenue, which currently contributes between 25 per cent and 30 per cent of total earnings for recyclers. Given its high margins and relatively low competition due to government-mandated environmental compensation, this revenue stream is expected to play a pivotal role in the financial sustainability of recycling businesses.
Courtesy: www.entrepreneur.com
Member