HomeIndustry InsightsIndia’s Circular Economy Drive Faces Setback as r-PET Industry Warns of Policy Risks

India’s Circular Economy Drive Faces Setback as r-PET Industry Warns of Policy Risks

2025-08-04

India has been striving to advance its circular economy agenda, particularly in the field of plastic recycling and sustainable resource utilization. A key element of this effort has been the Extended Producer Responsibility (EPR) framework, which requires plastic manufacturers to ensure proper collection, recycling, and reuse of plastic waste. However, the country’s progress is now facing headwinds due to proposed policy changes that could potentially dilute existing EPR obligations.

The Association of PET Recyclers (AIPR) has voiced strong concerns, warning that the proposed regulatory relaxation could significantly impact the recycled Polyethylene Terephthalate (r-PET) industry. According to AIPR, easing producer responsibility requirements may result in reduced demand for r-PET, which has been the driving force behind recycling infrastructure investments and technological upgrades.

r-PET plays a critical role in sustainable packaging and textiles, helping to reduce reliance on virgin Polyethylene Terephthalate (PET) while lowering environmental impact. The industry has built a relatively mature value chain, covering waste collection, sorting, cleaning, processing, and end-product applications. A decrease in r-PET demand could destabilize this ecosystem, potentially forcing companies to scale down operations or even shut down facilities. This, in turn, would threaten thousands of jobs and discourage future investment in recycling technology.

The timing of this policy uncertainty is particularly concerning as global markets are placing greater emphasis on sustainable sourcing and the use of recycled content in packaging and textiles. Indian exporters of packaged goods and synthetic fibers are under increasing pressure from international buyers who favor environmentally friendly materials. A rollback in domestic regulatory rigor could weaken India’s competitiveness in global markets and tarnish its reputation as a sustainability-focused economy.

Industry experts are calling on policymakers to maintain strict EPR enforcement and establish clear guidelines for recycled content usage. They argue that policy consistency and clarity are essential to fostering long-term investment confidence and ensuring India meets its environmental and sustainability targets. In addition, supportive measures such as financial incentives and tax benefits for companies using recycled materials are seen as critical to sustaining momentum in the recycling sector.

“Relaxing EPR obligations at this stage risks undoing years of progress made in building India’s recycling infrastructure,” the AIPR noted. “We urge the government to stay committed to strong regulatory standards that promote recycled content usage and circular economy principles.”

Without decisive action, India risks stalling or even reversing its progress in plastic waste reduction, undermining both domestic sustainability goals and international environmental commitments. The r-PET industry, which has so far played a central role in reducing plastic waste and supporting employment, is now looking to policymakers for reassurance and stability in the regulatory environment.

Source: Indian Chemical News