Circular Economy in India Skip to content

Circular Economy in India

December 7, 2016

Circular Economy in India


Circular Economy in India
Circular Economy in India

Rapid Growth

In a context characterised by unprecedented economic dynamism and a rapidly growing population, India stands at the threshold of profound choices about the path to future development. If it continues, the country’s economic growth trend, which averaged 7.4% a year in the last decade, will lead it to become the fourth largest economy in the world in about two decades. This positive prospect does not, however, come without challenges as the nation still faces significant questions about rapid urbanisation, resource scarcity, and high levels of poverty.

Value Creation to Align to Mature Markets

In an interconnected world predicated largely on a linear economic model, the upcoming Indian powerhouse could embark on an industrialisation path comparable – albeit faster – to that of mature markets, with the associated negative externalities it entails. But this scenario is not inevitable. With its young population and emerging manufacturing sector, the country is at a crossroads and can today make systemic choices that would put it on a trajectory towards positive, regenerative, and value-creating development.

Circular Economy in India - Cities and Construction
Circular Economy in India – Cities and Construction

Restorative & Regenerative Growth Model

Business leaders and governments around the world are increasingly looking beyond the linear ‘take, make, dispose’ model of growth, with a view to operate a strategic move towards an approach fit for the long term. Past research by the Ellen MacArthur Foundation and others has demonstrated the potential of the circular economy – one that is restorative and regenerative by design and makes effective use of materials and energy in a digitally-enabled model of development.

Circular Economy in India - Food & Agriculture
Circular Economy in India – Food & Agriculture

Applying Circular Principles for Rapid Growth

This report shows that a circular economy path to development could bring India annual benefits of ₹40 lakh crore (US$ 624 billion) in 2050 compared with the current development path – a benefit equivalent to 30% of India’s current GDP. This conclusion rests on high-level economic analysis of three focus areas key to the Indian economy and society: cities and construction, food and agriculture, and mobility and vehicle manufacturing. The research shows that realising these benefits fully would require applying circular economy principles in combination with harnessing the unfolding digital and technological transformation, all tailored to the Indian context.

Circular Economy in India - Mobility & Vehicle Manufacturing
Circular Economy in India – Mobility & Vehicle Manufacturing

Additional Health & Economic Benefits

In addition to creating direct economic benefits for businesses and households, following a circular economy development path would reduce negative externalities. For example, greenhouse gas emissions would be 44% lower in 2050 compared to the current development path, and other externalities like congestion and pollution would fall significantly, providing health and economic benefits to Indian citizens.

Indian Businesses Lead the Way

Achieving these benefits would require Indian businesses to lead the way in the transition phase, with policymakers simultaneously setting the direction and creating the right enabling conditions. Other organisations, such as universities, non-profits, and international organisations can play important supporting roles, including facilitating and participating in local collaborative initiatives.

Launching a Circular Economy Transformation

By embarking on a circular economy transformation – launching new circular economy initiatives and reinforcing existing efforts – India could leverage its expected high levels of growth and development to build a more resource effective system, creating value for businesses, the environment, and the Indian population.

Recycled from Ellen MacArthur Foundation

Circular Economy in India Ellen MacArthur Foundation Report

Visit The Circular Economy in India Microsite

Explore ISB Global’s Platform for a Circular Economy – RiDx