India’s metal recycling sector is expanding amid increased global demand for green steel.
The country’s Ministry of Steel National Steel Policy (NSP) 2017 estimates that 70-80 million metric tons of ferrous scrap will be required by 2030 to meet India’s growing steel production, more than doubling the 30 million metric tons presently needed.
In the domestic market, challenges like poor material quality, weak collection networks and limited and outdated processing infrastructure hinder India’s circular economy goals. As global sustainability targets tighten, will India overcome these barriers?
A thrust toward green steelmaking
As Europe moves toward carbon neutrality with rules like its Carbon Border Adjustment Mechanism, India aims to reduce carbon emissions associated with steelmaking.
Failure to lower emissions could lead to steelmakers paying a potential surcharge of $80 per metric ton by 2030, according to the European Union’s Joint Research Centre. This is significant because Europe is a key market for Indian steel, accounting for 25 percent of its exports, according to a Rystad Energy report.
Steelmakers are shifting to low-carbon technologies to avoid that potential surcharge.
Mumbai-based JSW Steel is piloting hydrogen-based direct reduced iron (H2-DRI) processes, which could reduce emissions by up to 97 percent compared with traditional blast furnaces.
Meanwhile, Tata Steel Ltd., also based in Mumbai, has begun constructing a 750,000-metric-ton electric arc furnace (EAF) mill in Ludhiana. Local reports suggest that once the EAF is operational, the company could add similar plants, taking its total domestic capacity to 36-40 million metric tons from its current 21.6 million metric tons.
In March 2019, 47 EAFs and 1,128 induction furnaces (IFs) operated in India, primarily relying on recycled steel as a raw material for steel production, according to the NSP. The NSP aims to establish a globally competitive steel industry in the country by expanding production capacity to 300 million metric tons by 2030, with 35-40 percent of that output expected to use the EAF/IF route, yielding roughly 120 million metric tons of green steel annually.
While recycled steel remains the primary raw material for the secondary steel sector, it also constitutes 15 percent of the charge mix in basic oxygen furnaces used by the primary steel sector, enhancing efficiency and reducing production costs. Ensuring the availability of high-quality scrap at competitive prices is crucial for the steel industry’s growth and achieving the NSP 2017 targets. Both the EAF/IF and primary steel sectors depend on stable and sufficient scrap supply for sustainable expansion.
Moreover, India’s Ministry of Steel is promoting the use of recycled materials in steel production.
The share of recycled material, currently at 15 percent, is expected to increase to 25 percent by 2030 and to reach 50 percent by 2047, significantly reducing dependency on iron ore. Thus, with insufficient domestic supply, India has to rely on recycled steel imports. The country imported 9.49 million metric tons of recycled steel in 2024, marking a 19 percent decline from 2023’s 11.75 million metric tons, according to India Customs data.
Challenges in the way
Despite promising signs of growth, India’s metal recycling industry faces a number of persistent challenges.
The inconsistent quality of recyclable material, often contaminated with impurities, makes processing difficult and reduces output efficiency. Impurities can contribute significantly to pollution, which prompted China to ban some recyclable metal grades that could contain contaminants. Instead, China relies on other Asian countries to remove impurities before importing cleaner materials.
India’s fragmented supply chains and inadequate collection network further limit scalability as a significant portion of recyclable materials remains uncollected or improperly sorted.
A lack of standardized segregation, processing and sorting infrastructure also slows operations, preventing the industry from reaching its potential.
The informal sector’s dominance in recycling, weak policy enforcement and changing global metal prices further add to the uncertainty.
Steel industry expands
India’s domestic steel consumption is forecast to grow 9-10 percent in the 2025 fiscal year, according to New Delhi-based investment services company ICRA. In the first quarter of the 2025 fiscal year (April-June 2024), consumption increased 15 percent year over year.
To meet growing demand, Indian steelmakers have been expanding capacity rapidly, adding 26.3 million metric tons between the 2021 and 2024 fiscal years. An additional 27.5 million metric tons per year of capacity are expected between the 2025 and 2027 fiscal years.
India produced 149.6 million metric tons of steel in last year, marking a 6.3 percent increase from the 140.8 million metric tons the country’s steel industry produced in 2023, according to figures gathered by the Brussels-based World Steel Association.
EV push aids recycling sector
The rapid adoption of electric vehicles (EVs) in India also is driving the metal recycling market.
EVs rely heavily on metals like steel, aluminum and copper for batteries, motors and structural components. By 2024, India’s EV count surpassed 5.6 million, with annual sales exceeding 2 million units for the first time, a 24 percent increase from 1.6 million in 2023.
As EV demand continues to grow, so does the need for these critical metals. Government efforts such as the Faster Adoption and Manufacturing of Electric Vehicles scheme are accelerating EV adoption, further increasing demand for recyclable metals.
Meanwhile, the auto industry’s sustainability push is upping the use of recycled materials to conserve resources and cut emissions because recycled metals not only save energy but also reduce the environmental impact of mining and processing virgin raw materials.
Recognizing this growing demand for recycled metals, major players are expanding their recycling capabilities.
In November 2024, Nupur Recyclers, based in Dehli, revealed plans to expand its operations by 2027, including its scrap processing and lithium-ion battery recycling capabilities.
Similarly, in June 2024, Japanese trading firm Mitsui & Co Ltd. invested in Mumbai-based MTC Business Private Ltd., which is expanding into end-of-life vehicle recycling and battery processing.
India’s metal recycling industry is on a growth path, driven by strong demand, supportive government policies and sustainability efforts. While challenges persist, technology and infrastructure investments will help unlock its full potential.
With an ambitious steel production target and a push for higher recycled content, India is poised to strengthen its position in the global metal recycling and steel manufacturing landscape.
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