E-Waste Industry in India Hindsight & Foresight ©

The last 10 years have been a trying, tumultuous ride, with turbulence testing the service provider companies from all directions: Clients, Regulators of all hues, Commodity Prices, Logistics and Employees. 

E-Waste management is now a reasonably stable industry in India, with most players able to cover expenses and grow at a steady pace. This short article briefly touches upon the various drivers of the business, the journey so far, and the directions that future is likely to bring.

This article is introductory article to a 5 part in-depth series brought to you by Insight Success magazine 

Key drivers of business: 

1. Clients:

From having to explain a-z of the sector, regulation and why hazardous E-Waste should only be given to authorized market players instead of the neighbourhood kabadiwala, many clients have evolved to the thought process that at least they don’t question why they should not give E-Waste to unauthorized sector, even if that’s exactly what they do behind the regulator’s back !

2. Regulators 

• Environmental

From the go-slow, reluctant policies & implementation of last 10 years, the environment regulators are now certainly in the driving seat, with Central Pollution Control Board (CPCB) carrying out EPR (Extended Producer Responsibility) reforms with the rigour that is probably the best EPR execution in the world so far.

State pollution control boards are close on the heels, implementing the E-Waste rules smoothly.

The issue that has been bothering many industry players is the confusion between Rules and guidelines. The E-Waste management Rules, a legally applicable framework, clearly give jurisdiction for evaluation of capacity to District Industries Centre. The Guidelines, which are advisory in nature and have no legal validity under the constitution, have cut the above capacity drastically to only 15-20% of evaluation by DIC. This needs to be clarified either by MoEF & CC, or in a qualified court of law.

• Taxation

Customs department has been an equal running mate with CPCB in implementing the EPR reforms by strictly implementing the policy of allowing imports of electronics only to those companies that are duly authorized under EPR clauses. This, in addition to helping the implementation of E-Waste compliance targets, is also helping create a level playing field for the hitherto disadvantaged domestic manufacturers, in line with  ‘Make In India’ policy and vision of the Modi government.

The implementation of GST has done away with complex and business unfriendly VAT/CST regime and paved the way for organized, honest players to score above the unscrupulous, unorganized sector in a big leap. If you are law compliant, it is a good time to be in the industry. If not, the days are numbered.

3. Commodity Prices 

• Metals & Precious Metals

Instability is the word that comes to mind when we speak of metal prices in last decade. Though it has been an overall upward trajectory, the climb has been anything but smooth. That makes it very difficult to plan the budgets properly and stick with annual and quarterly plans.

What has also been a short sighted move by the government is putting the unofficial freeze of permissions to export PCBs to established markets. There was no warning, no official word on this policy and no planning could be done as a result.

It was short sighted because there is no infrastructure, existing or in the pipeline, to recover precious metals from PCBs in India on a globally competitive scale. While Western Europe and Japan clock recovery rates of 99.7%, we are still struggling with even 85% at any respectable scale, ignoring a few fanciful, bogus claims by unscrupulous entities.

The government should support to bring expert foreign JV partners into the precious metal recovery business in India and till such time, avoid drastic steps.

• Polymers

Though not a stable trajectory, I feel it is not of much consequence as the percentage amount for an E-Waste management company is not much, at the moment. Here is where an opportunity lays hidden in plain sight. Around 55 different types of plastic are present in E-Waste but most companies are not able to give it the due attention as their internal volumes don’t add up to a substantial amount. Time is ripe for a company specialized in E-plastic, focused on recycling FR (Flame Retardent) containing plastics.

• IT Equipment

Refurbished IT still remains the uncrowned king for most E-Waste management companies and the glut of Low cost, low quality imported  electronics in the market has significantly dented this market in the last decade. Companies who are fully dependant on this output stream need to be careful in forthcoming times. On the bright side, with the great market size, speed of market adoption and the classic Indian hunger for a ‘good deal’, the time is right for a specialized platform for sale and purchase of certified refurbished IT.

4. Logistics

Reverse logistics is a critical part of the chain, and now an attractive vertical itself, as EPR obliges electronics companies to organize mass scale take-back programs. Companies can either partner with a logistics companies, or even create subsidiaries / full service operators to cater to this requirement. Since it is a relatively new segment, early movers can expect to reap rich rewards and long term business engagements with both the electronics produces and recyclers.

5. Employees & Associates

The journey so far has been a free- for –all, where people come and go out of companies and business associations like a merry-go-round, for a few rupees more, or after conducting scams of various sizes and seriousness. The industry has been replete with examples of this frivolous behaviour, and gross misconduct, in the past decade. But now as the industry evolves to the next level of maturity and organization,  the coming times necessitate professional behaviour and career minded people, at all levels, from labourers to CEOs

6. Consultants

Consultants are generally numerous and fulfil a specific awareness need in any nascent industry, as E-Waste in India has been in the last decade. In the next stage of industry growth, there is place for fewer, more knowledgeable and capable consultants who command a higher premium for their time & efforts. Now is the time for that metamorphosis as the few who evolve into capable knowledge partners will see their practice grow manifold while the others will have to find alternate livelihoods. 

7. NGOs & Industry Associations

NGOs and industry associations have played a critical role from the beginning, or even before the rules were notified and the industry began in full swing. These are anti pollution groups such as Toxics Link and Manufacturers associations such as MAIT & ELCINA. They have been a guide to the evolving legal framework as well as the nascent industry and we all keep seeking their reagent like influencer to our industry.

A glaring gap has been a strong association of the recycling industry. Though attempts have been made in the past, they have all come to a naught due to power play and all players trying to grind their own agenda above industry welfare. 

8. PROs (Producer Responsibility Organizations)

In classic trigger happy fashion, PROs are approved without due rigour in formulating their features, do’s and don’t’s. PROs could be a useful chain connecting all parts of the industry but due to short sighted policy, they are not more than roadblocks in the current situation. It requires a proper discussion with all stakeholders and formulation of a proper policy that makes PROs enablers. 

Conclusion

To conclude, the industry has gone from an infant to teenager with plenty of teething troubles. With the right regulatory environment, almost all players are seeing good business opportunities, but the ones who’ll choose and stick to their specialization are the ones who’ll trump above the masses.

Enough of snorkelling on the surface, time to dive deep!

About The Author

Shankar Sharma is the Founder & Director of Green Vortex Waste Management Pvt Ltd. It is an early mover company in organized electronic waste management space with the capability to handle all E-Waste /WEEE in a safe, transparent manner complying / exceeding the directives set by the government. Shankar contributes regularly to industry bodies and think tanks on topics of waste management, environment & entrepreneurship. He can be reached at Shankar@greenvortex.in and  https://www.linkedin.com/in/sharmashankar/