Beyond startups and ESG pledges, it’s India’s informal sector with kabadiwalas and scrap traders
that’s keeping the recycling economy alive — and transforming waste into serious wealth.
A study of how scrap, e-waste, and circular economy businesses are booming under the radar.
Walk into the narrow lanes of Delhi’s Mayapuri or Mumbai’s Dharavi, and you might think you’re
looking at an old-world junkyard. But under that apparent chaos lies one of India’s most quietly
booming industries: the recycling economy.
From scrap metal traders to high-tech e-waste recyclers, small and mid-sized players are at the heart
of a multi-billion-dollar transformation. According to a 2022 report by Research and Markets, the
Indian recycling market is expected to reach $25 billion by 2025, growing at a CAGR of over 14%.
Much of this growth is not driven by large corporates, but by the country’s fragmented, often
informal, network of scrap dealers and aggregators.
An Unorganized Army with a Formal Impact
India generates approximately 3.2 million tonnes of e-waste annually, as per the Global E-Waste
Monitor 2020 (United Nations University). Yet formal recycling units account for only 10-15% of the
processed volume.
The rest? It’s handled by small scrap yards, kabadiwalas, and micro enterprises that have learned,
over decades, to extract maximum value from waste.
In cities like Ahmedabad and Coimbatore, family-run businesses are building informal recycling
clusters. A survey conducted by the International Labour Organization (ILO) in 2021 noted that over
90% of India’s recycling labor force is in the informal sector — yet they are responsible for salvaging
and reintroducing nearly 70% of recyclable material into the economy.
It’s a paradox: the formal sector gets the accolades and ESG awards, but the real muscle remains
uncelebrated.
Big Policy Push, Small Player Gains
India’s E-Waste Management Rules (amended in 2022) introduced Extended Producer
Responsibility (EPR) mandates, legally requiring manufacturers to ensure safe recycling of their
products.
This is where scrap dealers have found a new opportunity.
Companies, unable to build recycling infrastructure fast enough, often outsource compliance to
aggregators. These aggregators, in turn, depend heavily on a network of thousands of small
collectors to meet collection targets.
According to a study by The Energy and Resources Institute (TERI) published in 2023, informal sector
scrap dealers helped meet nearly 40% of the e-waste collection targets for major appliance and
electronics brands. And the trend is only accelerating.
From Scrap to Circular Economies
What was once dismissed as “kachra” is now the raw material for a new circular economy.
Sectors like automobile manufacturing, construction, and electronics are actively rethinking waste.
Tata Steel, for instance, launched its Steel Recycling Business in 2021, setting up India’s first steel
scrap processing plant at Rohtak.
Yet even with such giants entering the fray, a large chunk of input scrap still originates from
traditional kabadiwalas operating within a 5–10 km radius of manufacturing clusters.
A 2023 paper by the Centre for Science and Environment (CSE) highlighted that recycled materials
could reduce India’s CO2 emissions by up to 20% by 2030, provided informal recycling chains are
strengthened rather than eliminated.
The Future: Tech Meets Tradition
Interestingly, the new wave isn’t about replacing scrap dealers — it’s about upgrading them.
Platforms like Recykal, Karma Recycling, and EcoReco are bringing tech into the equation, connecting
local collectors with formal processors via apps and digital platforms.
Recykal’s 2024 white paper showed that digital aggregation models increased scrap material
recovery rates by 25% within just 18 months in pilot cities like Hyderabad and Pune.
In short, India’s recycling economy is not moving from informal to formal — it’s becoming “phygital”
(physical + digital). Traditional dealers are getting trained, certified, and linked into national and
even international supply chains.
Why This Quiet Boom Matters
The boom in scrap and recycling isn’t just an environmental story. It’s an economic story. It’s a story
of millions of livelihoods. It’s a story of India’s gritty, resilient, entrepreneurial undercurrent that
policymakers and investors would be foolish to ignore.
If India is serious about achieving its net-zero targets by 2070 (as pledged at COP26), then
strengthening and investing in its scrap ecosystem is not optional.
It is essential.
And at the heart of this movement are the thousands of scrap dealers — not the slick startups, not
the corporate boardrooms — but the men and women who, every day, turn “waste” into wealth,
quietly, relentlessly, under the radar.
Sources:
Global E-Waste Monitor 2020 (United Nations University)
Research and Markets Report 2022
TERI Study on EPR Implementation 2023
Centre for Science and Environment Report 2023
Recykal White Paper 2024
International Labour Organization (ILO) Survey 2021
