Indian Economy News

Circular business models can attract US$ 7 billion to India by 2035: Report

  • IBEF
  • August 30, 2023

Circular business models can unlock revenue potential of US$ 7 billion by 2035 in India, according to a joint report by India Cellular & Electronics Association (ICEA) and Accenture.

Six circular business concepts, including circular design, repair, and resale, have the potential to transform the electronics industry and promote resilience and economic growth. By 2035, the market for these circular models is expected to be worth US$ 13 billion. However, the entire addressable market, which may be reached through public-private partnerships, rises to US$ 20 billion, showing a 35% untapped potential, according to the report.

To develop into a force for resource efficiency, economic growth, and resilience, the circular economy strategy in the electronics industry must go beyond its function in managing e-waste. The crucial E-Waste Management (EWM) Rules and NITI Aayog's strategic prioritisation of e-waste are driving a transformation in India's dynamic circular electronics policy framework.

The report highlighted that failure to embrace the circular transition could affect approx. 1-3% of the electronics industry's EBITDA, leading to potential revenue loss.

Given the distinctive socioeconomic and manufacturing environment of India, it is crucial to strategically balance five important trade-offs. The research also listed some of these choices as formalising the informal economy, encouraging ease of doing business, controlling supply-side strength, and leveraging consumer-driven demand change.

In addition, it noted that India's three main business models—repair, resell, and recycling—were already flourishing and were mostly supported by the unorganised sector. Additionally, this competitive sector manages 90% of collection and 70% of recycling, but just 22% of collected e-waste is managed by the formal sector, indicating space for development.

The report presents nine bold policy interventions spanning downstream, use-phase, and upstream pathways. These include fostering multi-brand repair services, defining refurbishment standards, and creating a product-as-a-service framework.

According to the report, by concentrating only on smartphones and laptops until 2035, the proposed regulations can together divert 0.5 million tonnes of Waste Electrical and Electronic Equipment (WEEE) and provide an economic value of US$ 1.7 billion (net of costs).

The MeitY Secretary, Mr. Alkesh Kumar Sharma, emphasised that the report presents a number of audacious policy approaches. The report is in line with the government's dedication to circular business models focused on India. The 4Rs—reuse, repair, recover, and re-manufacture—and responsible resource management are advanced by this assessment of readiness, identification of opportunities, and proposal of evidence-based policies.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.