As India generates over nine million tonnes of plastic waste annually, industry leaders are calling on the Union Budget 2026 to play a decisive role in transforming plastic recycling into a commercially viable and operationally scalable sector.
Despite rising waste volumes, formal recycling continues to languish in single digits, held back by high taxation on plastic waste and recycling inputs, inconsistent enforcement of Extended Producer Responsibility (EPR), limited traceability, and inadequate access to modern recycling technologies. Industry stakeholders believe that targeted fiscal and regulatory interventions in the upcoming Budget could unlock significant scale in India.
“India’s formal recycling ecosystem remains constrained by a policy framework that has not kept pace with sustainability goals. High GST on plastic waste, scrap, recycling machinery, and inputs continues to make compliant recycling financially uncompetitive. The Union Budget must prioritise zero-rating GST on plastic waste, scrap, and recycling equipment, along with a meaningful reduction in GST on recycled plastic granules, to incentivise their use in long-life and durable products. Without correcting these cost distortions, the transition from virgin to recycled plastics will remain limited,” Mr. Sushil Kumar Aggarwal, Chairman and Whole-Time Director of AVRO India Limited; National President of The All-India Plastics Molded Furniture Manufacturers Association (AIPMFMA); Chairman, CII Western U.P Zone
Fiscal reform without regulatory certainty will not deliver scale. “EPR cannot work unless it is clear, stable, enforceable, and fully traceable, and the Budget must decisively strengthen EPR guidelines to ensure accountability across the value chain and give recyclers the confidence to commit long-term capital. Equally critical is the introduction of a dedicated technology upgradation fund and targeted subsidies for advanced recycling processes and automation, which will allow Indian recyclers to improve efficiency, meet global quality benchmarks, and make EPR compliance commercially viable at scale,” he added.
With the right policy push in the Union Budget, plastic waste can be transformed from an environmental liability into a value-generating resource, firmly embedded within India’s circular economy framework.
