India’s green strategy for economic growth, environmental resilience

India is increasingly adopting circular economy principles, positioning itself as a key player globally. Adopting circular practices could save up to 11 percent of its GDP by 2030 and 30 percent by 2050. Adoption of a circular economy will also strengthen India’s journey towards Viksit Bharat, and to achieve net zero goal by 2070.

India’s focus on sustainability is evident, with its efforts to minimize environmental impact, create green jobs, and boost innovation. This transition promotes resource efficiency, waste reduction, and recycling, helping conserve resources, reduce carbon footprints, and foster economic growth through sustainable practices.

While globalization has connected economies and cultures, it has also led to significant environmental challenges. Increased consumption, production, and industrialization have resulted in resource depletion, rising greenhouse gas emissions, and climate risks. Circular economy principles, by contrast, promote sustainability by shifting from a linear model of ‘take, make, dispose’ to a regenerative approach that prioritizes the restoration and reuse of resources.

Annually, more than 100 billion tons of resources enter the global economy, yet only 8.6 percent is recycled. The 2021 Circularity Gap Report, published annually by Circle Economy Foundation, the Netherlands-based impact organization, noted that the global economy is only 8.6 percent circular, with a target to reach 17 percent by 2030, focusing on high-potential sectors. Achieving this goal involves fostering product designs that are durable, repairable, and recyclable, enabling a shift toward sustainability.

The circular economy is beneficial for supply chain resilience. By reducing reliance on scarce resources, businesses can shield themselves from global supply chain volatility. The recovery and reuse of materials reduce dependence on new raw materials, lowering price volatility and ensuring resources remain in use for longer periods. This approach decouples economic growth from resource consumption, making it crucial for long-term sustainability.

India’s government is actively promoting the transition to a circular economy through various policies. Notable initiatives include the Plastic Waste Management Rules, e-Waste Management Rules, Construction and Demolition Waste Management Rules, and the Metals Recycling Policy.

To expedite the shift, the government has formed 11 committees led by ministries and including experts to create action plans for transitioning to a circular economy in key sectors. These areas include products and materials that present challenges, such as e-waste and construction materials, which require coordinated action.

NITI Aayog, India’s apex think tank, has been pivotal in advancing circular economy initiatives. It has collaborated with the European Union delegation on resource efficiency, focusing on sectors like steel, construction, and e-waste. Progress has been made in using industrial byproducts like fly ash and slag in other sectors.

Additionally, NITI Aayog has worked on creating a perspective on recycling industries, identifying challenges in utilizing waste as a resource.

India is also a member of the Global Alliance on Circular Economy and Resource Efficiency (GACERE), an international coalition promoting circularity and sustainable resource management. Launched in 2021, GACERE supports the transition to a global circular economy by encouraging governments to collaborate on sustainable solutions.

For Indian small and medium-sized enterprises (MSMEs), transitioning to a circular economy offers significant opportunities to reduce waste and maximizes resource efficiency. By collaborating with government initiatives, MSMEs can access support for this transition, ultimately contributing to a more sustainable supply chain.

Standardization plays a vital role in facilitating the circular economy. The development of common frameworks, such as those introduced by the International Organization for Standardization (ISO), ensures consistency across businesses, governments, and consumers. New ISO standards, released in May 2024, provide the tools and frameworks necessary for implementing and measuring circular economy practices. These standards support interoperability, energy efficiency, waste reduction, and market access, promoting global circularity and consumer confidence.

The circular economy also presents significant economic potential. According to UNCTAD, it could create more than 7 million jobs and generate up to USD 4.5 trillion in global growth by 2030. For India, adopting circular practices could save up to 11 percent of its GDP by 2030 and 30 percent by 2050. Greenhouse gas emissions could also be cut by 44 percent.

Currently, China is the world’s largest emitter of CO2, contributing around 28 percent of global emissions. The United States is the second-largest emitter of CO2 globally. India is the third-largest emitter of CO2 in the world, but its emissions per capita are relatively low compared to developed countries.

India, as one of the largest economies and most populous countries in the world, plays a critical role in global efforts to combat climate change, the country has made significant progress and is committed to a low-carbon future. At his juncture, the circular economy practices are crucial to India’s goal of achieving Net Zero emissions by 2070.

By shifting away from resource-intensive practices, businesses can contribute to reducing emissions while fostering economic growth. Circular engineering can offer MSMEs a competitive edge in the global market, driving sustainability and innovation. For MSMEs, circular models offer a chance to reduce costs, improve efficiency, and build brand loyalty among environmentally conscious consumers.

In conclusion, the circular economy represents a paradigm shift that addresses the pressing environmental and economic challenges. By moving away from the traditional linear model, businesses, governments, and consumers can create a sustainable, resource-efficient, and economically viable future. As globalization and circularity converge, the principles of circular economy offer a way to balance economic growth with environmental responsibility, paving the way for a more equitable and sustainable world.