India's demand for steel scrap to increase sharply on capacity expansion: Jt Secy of Steel ministry

Jaipur: Scrap currently accounts for nearly 21% of India’s crude steel production, significantly lower than the global average of around one-third. However, scrap consumption in the Indian steel sector is steadily increasing, with scrap availability projected to reach nearly 36 million tonnes in the coming years. This indicates a sharp rise in demand for steel scrap as large-scale capacity expansion continues, according to Daya Nidhan Pandey, Joint Secretary, Ministry of Steel. He was speaking at the inaugural session of the 13th International Material Recycling Conference and Exposition (IMRC 2026) held here.

Highlighting government initiatives, Pandey said that coordinated policy actions are underway through the Steel Scrap Recycling Policy 2019, the Vehicle Scrappage Policy, the establishment of Registered Vehicle Scrapping Facilities, and the integration of scrap management within national circular economy frameworks. Recently notified Extended Producer Responsibility (EPR) mandates covering end-of-life vehicles and construction and demolition waste are expected to further accelerate formal scrap recycling.

Looking ahead, India aims to progressively increase the share of scrap in steelmaking towards the global average of 31%. With steelmaking capacity targeted at 300 million tonnes by 2030 and 500 million tonnes by 2047, steel scrap is expected to play a critical role in conserving natural resources, reducing dependence on coal imports, lowering emissions, and supporting India’s net-zero target by 2070. Scrap-based steelmaking was highlighted as a key enabler of decarbonisation by substituting iron ore and coking coal while avoiding carbon emissions.

Addressing operational challenges, Sanjay Mehta, President, Material Recycling Association of India (MRAI), called for urgent policy rationalisation. He stressed the need to reduce GST on scrap to 5%, stating that higher rates are hampering growth and encouraging non-compliance. He also called for the complete removal of import duty on aluminium scrap and stronger implementation of EPR across e-waste, tyres, and plastics to strengthen the recycling value chain.

Mehta further emphasised the social dimension of recycling, noting that nearly one-third of India’s scrap originates from ragpickers, households, and small workshops. He advocated lower GST and the use of UPI-based transactions at the first level of scrap collection to formalise the sector and reduce cash-based transactions.

On industry trends, Dhawal Shah, Senior Vice President, MRAI, noted that recycling in India has evolved from a CSR-led activity to a core business strategy. With over 1,400 start-ups operating in waste management and sustainability, the recycling sector is expanding rapidly and could surpass mining in scale before 2050.

The three-day IMRC 2026, organised by MRAI and held from January 20–22, 2026, brings together policymakers, industry leaders, and global stakeholders to deliberate on sustainability, climate change, circular economy transitions, and regulatory and market challenges facing the recycling industry.

Tags : Ministry of Steel, Scrap, Scrappage, Sanjay Mehta