India’s Circular Economy push falters as r-PET Industry faces crisis amid proposed policy dilution
New Delhi: The ambitious circular economy goals envisioned by Prime Minister Narendra Modi is set to face a major setback, with the recycled PET (r-PET) industry sounding the alarm over poor uptake of recycled plastic by major brand owners.
Despite the Ministry of Environment, Forest and Climate Change (MoEFCC) mandating the use of 30% recycled content in rigid Category-1 PET packaging used by beverage companies—effective from April 1, 2025—brand owners are reportedly dragging their feet on procurement, citing confusion stemming from proposed amendments to the Plastic Waste Management (PWM) Rules recently.
The MoEFCC’s proposed amendment issued on June 3, 2025, allows brand owners to carry forward shortfalls in meeting the 30% r-PET target for food contact applications for 2025-26 over the next three years. This leeway, according to industry insiders, has emboldened some brand owners to assume an eventual rollback or relaxation of the target—resulting in delayed or avoided purchase of r-PET.
This policy ambiguity is threatening to derail the country’s recycling infrastructure, which has come up independently without any financial support from the very same Producer Responsibility Organisations (PROs) or PIBOs (Producers, Importers, Brand Owners), Shailendra Singh, Director General, APR (Association of PET Recyclers), Bharat, said.
The r-PET industry has so far invested an estimated ₹7,500–8,000 crore, with a total planned capacity of 4 lakh metric tonnes, of which 1.5 lakh MT is already operational and FSSAI-authorised, and another 1.5 lakh MT scheduled to become FSSAI authorised soon. However, most of these facilities are operating well below capacity or still non-operational, raising fears of a looming financial crisis and potential bankruptcy across the sector.
While the Food Safety and Standards Authority of India (FSSAI) has issued updated guidelines aligning with the PWM 2024 provisions and permitting the use of r-PET in food-contact applications, the delay in implementation by brands and retailers is crippling the very ecosystem meant to support India’s transition to a sustainable plastic economy.
Industry voices warn that this disconnect between policy intention and ground-level implementation may undo years of progress and jeopardize India’s international climate and sustainability commitments.
“Recyclers have taken bold steps, investing in world-class food-grade compliant r-PET plants. But if enforcement remains weak and brand owners keep defaulting, we fear the entire circular economy framework could collapse, in similar lines to what is happening in EU Nations,” Singh pointed out.
Brands have been claiming about non availability of FSSAI Authorised capacities in India, but the plants who are already approved also are forced to keep their plants shut due to lack of demand from Industry.
As India positions itself as a global champion of sustainable development, the disconnect between regulatory ambitions and on-ground reality now poses a serious threat to the credibility of its green transition narrative.
