India doubles down on scrap to fuel steel growth

India plans to ramp up the use of steel scrap as it pushes towards a crude steel capacity of 300 million tonnes by 2031.

‘Scrap consumption in Indian steelmaking is rising steadily,’ Daya Nidhan Pandey, joint secretary at the Ministry of Steel told the inaugural session of the 13th International Material Recycling Conference and Exposition in Jaipur.

Scrap accounts for nearly 21% of India’s steel production, compared with a global average of around one-third.

Sharp growth

‘This clearly indicates sharp growth in scrap demand,’ Pandey says. ‘Large-scale capacity expansion will drive this momentum.’

The official indicated how policy measures support scrap-based steelmaking. They include the Steel Scrap Recycling Policy 2019 and the Vehicle Scrappage Policy. The government has also rolled out Registered Vehicle Scrapping Facilities and integrated scrap management with broader circular economy initiatives.

Recently notified extended producer responsibility (EPR) rules target end-of-life vehicles and construction waste. Pandey says these measures are expected to accelerate formal scrap recycling. India aims to progressively raise scrap use in steelmaking towards the global average of 31%.

The country also plans to reach 500 million tonnes of steel capacity by 2047. ‘Steel scrap will play a decisive role in conserving raw materials, cutting coal imports, lowering emissions, and supporting net zero by 2070,’ he adds.

Overcoming challenges

Sanjay Mehta, president of the Material Recycling Association of India (MRAI), mentioned operational challenges. ‘GST [goods and services tax] on scrap should be reduced to 5%,’ he says. ‘Current high rates are hurting growth and pushing the sector into non-compliance.’ He also called for full removal of import duties on aluminium scrap.

Mehta believes EPR enforcement across e-waste, tyres and plastics needs to be strengthened, saying weak implementation is undermining the recycling value chain.

The informal sector remains a key part of India’s scrap ecosystem. Around one-third of scrap originates from rag-pickers, households, and small workshops. Mehta suggests routing purchases from the unorganised sector through UPI-based transactions and discouraging cash at the first collection point.

‘This will bring informal workers into the formal economy with dignity,’ he says. Proper inclusion of these actors, combined with policy reform, could expand scrap availability and strengthen the sector.

Start-ups and green funds

Dhawal Shah, senior vice-president at MRAI, argues that recycling has evolved from an activity driven by social responsibility to a core business strategy. ‘India now hosts more than 1 400 waste management and sustainability start-ups. At this pace, recycling could surpass mining before 2050.’

Zain Nathani, MRAI vice-president, describes the recycling industry as a potential game changer while secretary-general Amar Singh believes that the sector is poised to make stronger contributions to GDP in the coming years.

Rajat Agarwal, managing director of Gravita India, spoke on the role of finance and global capital. ‘Capital is no longer a constraint for responsible recyclers. Global green funds and ESG-focused investors are actively backing scalable platforms that deliver financial and environmental impact.’

He believes that supportive policies, strong governance and India’s circular economy vision make local recyclers the providers of globally competitive climate-change solutions.