For emerging market economies, the modern development predicament is to support growth with inclusivity while safeguarding the environment and making action-oriented policies to combat climate change. The UN, through Agenda 2030, has voiced this concern by promoting the practices of a circular economy, envisaged in its SDG Goal 12 (Sustainable Consumption and Production), Goal 13 (Climate change), and Goal 8 (on economic growth), among others. Contrary to the popularly followed designs of economic growth, which are primarily linear in their execution, the circular economy model is highly multi-dimensional and inclusive. This is because the circular economy model doesn’t include any externalities like pollution and waste in its inherent design, and thus, the focus is on extending the life cycle of the products.
A typical production and consumption process inherently creates negative externalities for various stakeholders, increasing costs to individuals, firms, and the environment. On the contrary, the circular economy model is based on the practices of sharing, leasing, reusing, repairing, refurbishing, and recycling[1], thereby minimizing and eliminating market failures of negative externalities. Though the concept sounds all hunky dory, the primary concern lies in the transitioning of the economy from a linear pattern of consumption and production to a circular one, particularly for the developing nations struggling to strike a balance between growth and sustainability.
In this context, among the Global South, India is fast emerging as the poster face of the circular economy model, using a restorative approach to production and consumption by redesigning, recovering, and reusing products and materials and limiting inefficient utilization of resources.
When we say economy, it conceptually implies the involvement of all stakeholders, whether producers, consumers, financial institutions, or the state. Understanding this, India has adopted a multi-stakeholder approach, where all are encouraged to be active participants and not passive recipients in attaining environmental sustainability. The task is to bring reforms to both the demand and the supply side of the economy, thus addressing the issues in the “take-make-waste” model across the stakeholders.
This is where India has emerged in the forefront among the developing countries. On the production side, India proactively encourages businesses and welcomes investments supporting circular economy business models. For investors, India has become a significant target as it offers a swifter and flexible switch to sustainable production practices, unlike the developed markets,
where the linear process is rigid and switching costs are high. A famous example of India Inc.’s committing to the circular economy is the partnership of Aditya Birla Group’s initiatives in the bauxite industry within its organization boundaries. To utilize the by-products of bauxite refining, Aditya Birla Group’s Hindalco partnered with the Group’s subsidiary UltraTech Cement to use the residue as input in the cement manufacturing process[2]. As per FICCI’s report[3], about 97 percent of the leaders from major 100 companies in India are committed to linking their sustainability goals to their financial performance. Most companies are adopting circular economy objects through product/service recirculation, absolute consumption reduction goals, and the use of non-virgin / sustainably produced materials, among others.
During the G20 presidency, India emphasized four significant tenets: circular economy in the steel sector, Extended Producer Responsibility (EPR), circular economy, and establishment of an industry-led resource efficiency and circular economy industry coalition. Under EPR, India has resolved to sustainable development and circular economy by encouraging the replacement of natural resource usage with valuable waste materials. On the policy side, through EPR, India intends to make producers responsible for the environmental impacts of their products throughout their life cycle, promote better waste management, and reduce the burden on municipalities. In the case of plastic packaging, the government has provided a framework to strengthen the circular economy of plastic packaging waste and develop new alternatives to plastics. It also emphasizes the reuse of rigid plastic packaging material and enforces the prescription of a minimum level of recycling of plastic packaging waste[4]. Recently, in December 2023, India produced a roadmap for reducing plastic waste in India, in collaboration with Australian research institutions, to foster research and industry partnerships for India’s transition to a circular economy in the Plastics sector[5]. The government also launched a Circular Economy Cell (CE Cell) in its think tank, the NITI Aayog, in 2022, focusing on sectoral circular economy action plans[6].
Internationally as well, India has stood exemplary in its initiatives by being a significant part of the global participation with the International Solar Alliance (ISA), Coalition for Disaster Resilient Infrastructure (CDRI), creation of LeadIT, Infrastructure for Resilient Island States (IRIS) and the Big Cat Alliance, among others[7].
Not only the supply side, India has also been encouraging demand side stakeholders to be active participants in boosting the circular economy. To enable individuals, the Prime Minister’s call to Mission LiFE – Lifestyle for Environment, is a people-centric, action-oriented approach. Like the producers, it makes citizens mindful of their choices, discouraging throwaway culture, increasing consumer awareness about the problems of waste generation, and reducing environmental footprints. LiFE has become an India-led global mass movement[8] promoting environmentally conscious and pro-plant choices. It calls for the revision of sustainable traditional practices rooted in indigenous culture and values. This is where nations of the Global South from Africa and South Asia stand to benefit, revisiting their traditional sustainable practices and exchanging traditional circular economy practices of indigenous communities across the Global South. By changing the way people demand commodities, the objective is to put in motion a bottom-up approach where individual demands for environment-friendly products persuade industries and governments to change their patterns and adopt inclusive and greener production and policy formulation models. To put it in a nutshell, given the rising importance of India’s economic, cultural, and diplomatic presence internationally, it has, through its efforts, acquired a distinctive status as a global leader in sustainability practices. India has committed itself to achieving the Agenda 2030 and swiftly adopt resilient circular economy practices. As per estimates, India is expected to reap yearly benefits of US$ 624 billion by reducing the negative externalities by embracing the circular economy by 2050[9]. Thus, India’s evolving framework of circular economy holds even greater relevance for the Global South[10], while India emerges as a global leader in the promotion and implementation of the transition from linear to circular economy.
[1] https://www.europarl.europa.eu/news/en/headlines/economy/20151201STO05603/circular-economy-definition-importance-and-benefits#:~:text=The%20circular%20economy%20is%20a,cycle%20of%20products%20is%20extended.
[2] https://www.cnbctv18.com/economy/why-circular-economy-is-imperative-for-businesses-in-india-anirban-mukherjee-bcg-17929111.htm
[3] https://www.ficcices.in/Ficci_Accenture_CES_REPORT_2022.pdf
[4] https://pib.gov.in/PressReleasePage.aspx?PRID=1799170
[5] https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1983269
[6] https://www.niti.gov.in/circular-economy-cell
[7] https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1984434
[8] https://missionlife-moefcc.nic.in/
[9] https://www.ibef.org/blogs/circular-economy-for-sustainable-development-in-india
[10] https://theprint.in/ani-press-releases/india-circular-economy-forum-featured-journey-from-waste-to-wealth-india-leading-the-global-south/1654185/