Liberal scrap imports: Copper recycling in India
This article is authored by Tanima Pal, research analyst, Centre for Social and Economic Progress (CSEP), New Delhi.
The removal of customs duty on copper scrap in the Union Budget 2025-26 marks a significant step toward facilitating a seamless inflow of scraps, bolstering domestic recyclers and the wider copper industry. Additionally, the allocation of ₹1,500 crore for critical mineral recycling, as outlined in the recently launched National Critical Mineral Mission (NCMM), underscores the government's commitment to fostering a circular economy and reducing dependence on refined copper using extracted copper ore.
Copper, being the cross-cutting critical mineral, is crucial not only for renewable technologies like wind, solar, storage batteries, and electric vehicles but also indispensable in conventional applications, including power generation, transmission, distribution, and the end-use sectors. Copper is also highly recyclable, exhibiting equivalent performance properties as primary copper, with recycling being more energy efficient. In 2023, 32% of total global copper usage was derived from recycled copper.
However, India's copper recycling infrastructure remains at a nascent stage with enough room for improvement. A well-defined roadmap under an effective policy framework is necessary to give impetus to domestic recyclers, semi-fabricators, and downstream manufacturers to embrace a recycling-based economy. A large section of India's secondary copper supply chain, from scrap collection to processing and further integration into the recycling value chain, is dominated by fragmented, informal, and unregulated sectors. As a result, several concerns emanate from this situation.
First, as per the industry findings, India generated around 350 kilotons of copper scrap in 2021. However, there is a dearth of comprehensive official data on yearly domestic copper scrap generation. Government data on copper recycling units is outdated, with the Indian Bureau of Mines (IBM) report from 2011 indicating only 35 Central Pollution Control Board (CPCB) approved copper reprocessing units, with a total capacity of 2.42 lakh tonnes per annum. Moreover, the absence of a formalised and well-structured scrap market hinders recyclers and downstream manufacturers from sourcing domestically available scrap efficiently.
Second, the secondary smelting and refining infrastructure in India is inadequately developed, resulting in direct remelting of scrap instead of proper re-smelting and refining to achieve the highest level of purification. Electrolytic Tough Pitch (ETP) copper, with a mandated purity of 99.9% or higher under IS12444 standards, is critical for the performance and safety of electrical equipment. Studies indicate that direct remelting of scraps fails to remove the tramp elements such as tin, lead, iron, nickel, and zinc, which degrade the electrical conductivity and mechanical properties of the wires and cables. Reduced electrical conductivity increases resistivity, leading to overheating and electrical short circuits causing electrocutions and other potential safety hazards.
Third, scraps and e-waste with embedded copper contain huge chunks of hazardous toxins such as mercury, lead, brominated flame retardants (BFR), polychlorinated dibenzofurans (PCDFs) and hydrochlorofluorocarbons (HCFCs), it wreaks adverse impacts on human health if not managed in an environmentally sound manner. The informal sector, without a proper social safety net, however, exposes labourers, including women and children, to health hazards through inhalation of harmful constituents during open incineration and hazardous acid leeching practices.
To address these challenges, it is imperative to streamline the copper recycling infrastructure and create a well-channelled domestic scrap market with forward linkages and market access. Establishing a robust linkage between scrap vendors and recyclers and integrating informal scrap vendors into the mainstream recycling value chain will improve supply consistency. Small-scale recyclers, currently scattered across the country, should be incentivised to upgrade their technology and adopt advanced processing methods through subsidies, tax benefits.
As electrification is a key pillar of the energy transition and electrical and electronic products are integral to daily life, ensuring safety in this sector is essential. Technology transfer, knowledge sharing, and more R&D investment would encourage recyclers to move beyond direct remelting and implement cutting-edge techniques that ensure high-purity copper production. Additionally, standardised guidelines for responsible recycling will help maintain quality benchmarks for electrolytically refined copper. Besides, many industrial applications do not require the highest-grade copper purity, a separate demand-supply mechanism can be created through efficient collection, sorting, and processing. This approach helps lowering the higher recycling costs that would otherwise be necessary.
While removal of customs duty will enhance import, industry bodies report that in the absence of an effective regulatory monitoring mechanism scraps with a minimal percentage of quality copper get imported which eventually affects the quality of end-use products and poses environmental risks. Regulatory oversight is required to avert India becoming a dump yard of substandard scrap imports. China's Solid Waste Import Ban, 2017, has already curbed substandard import of low-grade copper scrap with stricter regulations to prioritise the environment.
Strengthening Extended Producer Responsibility (EPR) frameworks holds producers accountable for managing the environmental impact of products throughout their lifecycle. Developing effective take-back/bring-back systems in coordination with various stakeholders can enhance the collection of end-of-life products. Product manufacturers, especially those using critical minerals, should design the products meticulously for maximum metal recovery and minimal wastage, thereby closing the recycling loop responsibly.
Along with trade facilitation, with the right policy interventions and industry collaboration, establishing a robust and sustainable recycling-based alternative copper supply chain is the need of the hour to convert today's waste into tomorrow's wealth.
This article is authored by Tanima Pal, research analyst, Centre for Social and Economic Progress (CSEP), New Delhi.
