‘Upcoming Indian powerhouse’ could jump straight to a circular economy

Adopting circular economy principles and potentially bypassing the linear economy stage seen in many mature economies would put India on a path to positive, regenerative, and value-creating development, according to a new report by the Ellen MacArthur Foundation.

‘Upcoming Indian powerhouse’ could jump straight to a circular economy
‘Upcoming Indian powerhouse’ could jump straight to a circular economy

The charity’s report ‘Circular Economy in India: Rethinking growth for long-term prosperity’, found that a circular economy framework – one that is restorative and regenerative by design, and makes effective use of materials and energy – could deliver annual benefits of ₹40 lakh crore (£494 billion) in 2050, equivalent to 30 per cent of India’s current GDP.

In addition to creating cost savings for businesses and households, following a circular economy development path would lower greenhouse gas emissions by 44 per cent by 2050, and congestion and pollution would fall significantly, leading to health and economic benefits to Indian citizens.

Guillermo Valles, from the United Nations Conference on Trade and Development (UNCTAD), which was a ‘knowledge partner’ for the report, commented on the report: “Lessons from this work in India serve as an important example for other developing countries seeking to meet both the Sustainable Development Goals and commitments in the Paris Agreement.”

Ellen MacArthur added: “This report builds on the foundation’s previous analysis of the circular economy opportunity for Europe. With its existing circular mind-set and strong digital backbone, India can reap significant economic and societal benefits.”

Three focus areas for circular economy principles

The foundation’s report suggests that, because of India’s high-growth markets, young population and emerging manufacturing sector, the country could move directly to a more effective circular system and avoid getting locked into the linear ‘take, make, dispose' systems seen in many mature markets.

This latest research is based on analysis of three focus areas key to India’s economy and society: cities and construction, food and agriculture, and mobility and vehicle manufacturing. These areas constitute the biggest source of employment, but also the majority of resource consumption.

‘Upcoming Indian powerhouse’ could jump straight to a circular economy
A circular economy structure

According to the report, applying circular economy principles in combination with digital and technological transformation would give India the opportunity to direct its expected high levels of growth and development toward a resource-effective system, creating value for businesses and the environment.

Benefits of achieving a circular economy also include a lower use of virgin materials, water and artificial fertilisers, reduced traffic congestion and air pollution and increased household disposable income through lower costs for products and services.

The report urges Indian businesses to lead the circular economy transformation, launching new circular economy initiatives and reinforcing existing efforts, and encourages policymakers to create enabling conditions.

India’s ‘unprecedented economic growth’ comes with waste challenges

India is currently experiencing unprecedented economic growth, with 7.4 per cent growth per year in the last decade. The country has a rapidly expanding population and is forecast to be the world’s most populous country by 2022. However, this also means the country faces questions about urbanisation, resource scarcity, and high levels of poverty. 

As a result of this rapid urbanisation, the country faces a substantial waste management challenge with waste management expected to reach 165 million tonnes per year, which could be both a challenge and an opportunity for creating a more circular economy.

Although not mentioned in the Ellen MacArthur Foundation report, a method of dealing with this waste problem in the Uttarpara-Kotrung municipality in West Bengal has just won a global award, defeating the likes of Auckland and Milan in the urban solid waste management category at the C40 Mayors’ Summit held in Mexico City this December.

As described in a recent article for the Hindustan Times, the initiative involves both source segregation and the inclusion of rag-pickers, which are common in many developing countries. It sees municipal workers in Uttarpara collect biodegradable and non-degradable solid waste from designated bins at households. Rag-pickers, who are given uniforms and protective equipment, then sort through non-biodegradable waste, which is dumped in a landfill, while the biodegradable waste is turned into compost, which can then be sold.

The article also indicates that India has recently revised solid waste management rules to require all local government bodies serving a population of one million or more to set up waste processing facilities within two years. The revised rules also advocate turning waste into wealth through recovery, reuse and recycling and the integration of the country’s rag pickers and waste dealers into the formal system.

More information about circular economy opportunities for the Indian economy can be found on a dedicated Ellen MacArthur Foundation microsite.