A circular economy involves a comprehensive strategy for economic growth that is intended to benefit industry, society, and the environment. It seeks to separate growth from the consumption of finite resources by being restorative and regenerative by design, in contrast to the 'take-make-dispose' linear economy. It works on principles of reuse, reduce, recycle, refurbish/repair, and remanufacture.
A circular economy is a significant tool in reversing the environmental crisis by promoting the reuse of materials. It also supports the efficient utilization of expired products to reduce the negative impact on the environment. It also encourages people to responsibly use natural resources and extends the service life of those products which are hazardous to the environment such as plastics and other electronic appliances. In addition to it, regulatory bodies like Central Pollution Control Board (CPBC) in India have implemented regulations such as the EPR authorization, which requires companies to develop a plan for managing the waste generated by their products to reduce environmental damage.
With a population of 1.3 billion people, accounting for 18% of the global population, living on only 2.4 % of the world’s surface , India faces resource constraints. To attain the desired economic growth along with this growing population, India needs to tackle the issue of resource scarcity and embark on a positive, inclusive, and environmentally sustainable model of development. To achieve this transformation towards building a low-carbon resource-efficient economy, India needs to unlock and implement the opportunities in the circular economy. Considering the rapid expansion of population, swift urbanization, and escalating environmental and climate change, India needs to implement the concept of the circular economy to reverse and minimize the environmental crisis. This approach focuses on the need for an integrated view of processes and products and is essential for minimising the dependency on resources. It also helps with annual substantial yield benefits and promotes a significant reduction in congestion and pollution, which would have a multiplier effect on the economy. The sustainable circular economy approach helps improve resource efficiency, reduce the consumption of existing resources and the emergence of new business models will also help incentivize India’s transition towards self-reliance.
Indian start-up inventions provide evidence of technological progress and the positive impact that comes from continuing to conduct business in an ecologically conscious manner. A favourable ecosystem has been created for start-ups to test and develop solutions appropriate for India due to the global environment, government support, and private investments. The demands of the country are rapidly becoming more environmentally friendly. Being environmentally conscious means making the necessary sacrifices and purposeful efforts to change habits and conserve resources. Numerous industries have taken into consideration the effort to go green as companies begin to recognise how their operations have an impact on the environment. Indian businesses and start-ups appear to be making a concerted effort to protect the environment and slow down climate change by using recycled or renewable resources to reduce energy use and trash. Aspiring eco-entrepreneurs and CEOs have become interested in the recent major climate change calamities. By recognising emerging trends and implementing significant changes in their respective industries, they support India's assertion of sustainability. India has amazing potential to be a key player in sustainable industrial development (SID) given the size of its industries. Over time, India's SMEs have emerged as a key driver of the country's economic growth. The 42.5 million SMEs in India employ roughly 40% of the labour force and produce about 30% of the GDP, according to the Confederation of Indian Industry (CII). As a result, the government invests in MSMEs to help India meet its SDG obligations. A strong ecosystem of sustainability drivers is being built by several government efforts like Zero Defect Zero Effect (ZED). Innovating their business prototypes and presenting a sustainability-first mentality, the current generation of young eco-entrepreneurs is moving the sustainability narrative forward and bringing in a new era of environmentally conscious goods and services. The active, diverse ecosystems which are driven by sustainability provide support for them, boosting their stimulation.
Government Policies Supporting India’s Sustainable Circular Economy
To drive the nation towards a sustainable circular economy, the government of India has been actively formulating policies and various incentivizing projects.
To reduce greenwashing, the Securities and Exchange Board of India (SEBI) has introduced new guidelines for companies to disclose their environmental, social, and governance (ESG) performance. Under these guidelines, companies are required to disclose information on their environmental and social policies, performance, and risks, as well as their governance structure and practices. These principles are intended to give investors additional knowledge about a company's ESG performance so they can determine more informed investment choices. These rules also give businesses a structure for disclosure and reporting, which will aid them in improving their ESG performance. These new regulations will take effect in the 2023-24 fiscal year. The government of India will issue Sovereign Green Bonds (SGrBs) as part of its broader market borrowings to raise money for green projects. The earnings will be used to fund public sector initiatives to lower the economy's carbon intensity.
The implementation of a circular economy has numerous advantages including direct and positive implications for the competitiveness of companies, individual stakeholders, and the overall industrial sectors. To achieve an impactful circular economy transition, macro-economic level planning is important along with considering stakeholders. The government advocates about 7Rs of circular economy which includes Reduce, Reuse, Recycle, Redesign, Remanufacture, Refurbish, and Repair. These should be considered as guiding principles while designing new ventures, business parks, and industrial clusters. With a system-level approach and favourable economic conditions, India can become a sustainable manufacturing hub in the coming years.