Circular economy

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Source: This post on Circular economy has been created based on the article “Circular economy” published in “Business Standard” on 14th December 2023.

UPSC Syllabus Topic: GS Paper 3 Environment – Conservation, environmental pollution and degradation.

News: The article discusses the importance of adopting Circular Economy for India in the context of the recently released National Circular Economy Framework (NCEF).

A detailed article on Circular Economy can be read here.


The Confederation of Indian Industry (CII) recently brought out the National Circular Economy Framework (NCEF). It aims to provide a blueprint for India’s shift towards a circular economy.

What is circular economy?

The circular economy is a model of production and consumption, which involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products as long as possible. In this way, the life cycle of products is extended.


What is the importance of adopting Circular Economy for India?

Mitigate Environmental Impacts: As manufacturing grows and consumption habits evolve, there’s a likelihood of generating more jobs and higher individual incomes. However, this rise in production and consumption can have adverse impacts on the environment.

Offset the Lack of Natural Resources: India, possessing just 2% of global land area and 4% of freshwater resources, would face limitations in its manufacturing and broader economy if it follows a linear economic model of “Take-Make-Dispose”

Tackle Poor Waste Management: India ranks 4th on the Mismanaged Waste Index (MWI) which highlights the country’s poor ability to manage plastic waste (India recycles only 12.3% of its plastic waste).

Secure Green Investment: By applying circular economy in their applications, the private sector can get an advantage in securing green investment.

Reduce Compliance Costs in Exports: India must adopt circular-economy models to reduce compliance costs (in light of instruments such as EU’s Carbon Border Adjustment Mechanism which places higher tariffs on import of carbon-intensive products) and mitigate scope-3 emissions.

Note: Scope 3 emissions are those not produced by the company itself, but by those up and down its value chain that the company is indirectly responsible for.

In this regard, the circular economy can be a powerful strategy to minimise dependence on natural resources, curtail waste, and encourage sustainable design practices.

What are the highlights of the National Circular Economy Framework (NCEF)?

  1. It focuses on areas like municipal solid and liquid waste, electronic waste, toxic and hazardous industrial waste, faecal sludge, plastics, and construction material.
  2. It aims to reduce reliance on imported resources, decouple economic growth from resource consumption, reduce resource consumption and pollution, enhance resource security, improve competitiveness, and attract investment.
  3. Economic Growth and Job Creation: CII also stressed that by 2050, the sector is likely to contribute $2 trillion to the domestic economy and create close to 10 million additional jobs.

What should be the way forward?

Collaboration between Companies: It should help in the exchange of byproducts across the value chain. Rather than discarding byproducts as waste, collaboration allows for their efficient utilization at different stages of production among companies.

Investing in Waste-Management Techniques: India must invest in waste-management policies like Extended Producer Responsibility (EPR) (which holds manufacturers accountable for the entire lifecycle of their products, including proper disposal or recycling). By this, India can effectively manage waste and promote the reuse of resources.

Question for practice:

What is the importance of adopting Circular Economy for India? Elaborate.

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