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To meet rising copper demand for its energy transition, India must tackle technological and structural hurdles in scrap refining, formalise its informal recycling sector, and build a resilient circular copper economy.
Image Source: Patrick morrissey/via Getty Image
Copper has emerged as a linchpin of the clean energy transition, with global demand projected to grow by at least 50 percent by 2050. This is in part due to the increased adoption of solar panels, wind turbines, and electric vehicles (EVs), which use three times more copper than conventional vehicles. Paradoxically, copper production through mining causes significant harm to the planet and is proving insufficient in meeting the demand driven by the green transition. However, copper is 100 percent recyclable and can be reused without diminishing any of its chemical or physical properties. To this end, India is set to scrap import duty on waste and scrap of a dozen critical minerals, including copper. But should India look abroad for copper scrap or strengthen circularity at home?
Figure 1: Global Demand Outlook for Copper
Source: Global Critical Minerals Outlook 2025, International Energy Agency (IEA)
Within domestic markets, enhancing circularity in India’s copper economy offers a potential solution but faces an array of hindrances. India’s copper recycling sector remains fragmented, predominantly informal, and associated with low-grade copper scrap and semi-finished products in its output.
India’s push toward circularity faces a key technical hurdle: refining low-grade scrap laden with impurities like lead, arsenic, and nickel. Conventional methods of electrorefining struggle with materials containing impurities. In standard setups, anodes made from scrap undergo electrolysis in sulphuric acid baths. High impurity levels in crude copper can trigger rapid anode passivation, which reduces output. In a nation where informal recycling dominates and purity levels vary, this can prove to be a systemic barrier to scaling copper circularity.
India’s copper recycling sector remains fragmented, predominantly informal, and associated with low-grade copper scrap and semi-finished products in its output.
Two types of hydrometallurgical methods offer solutions, each with distinct trade-offs. The first retrofits existing electrorefining infrastructure: by tweaking electrolyte currents or adopting pulsed currents, facilities can delay passivation and increase output levels. However, this method requires specialised equipment, which could be prohibitively expensive. This method also requires meticulous scrap sorting, which India struggles with due to the challenges of grading copper scrap through informal recycling channels.
The other involves leaching-purification-electrowinning (LPE) systems. Here, scrap is dissolved in acidic or ammoniacal solutions, impurities are chemically stripped, and pure copper is refined. While LPE’s modular design accommodates fluctuating scrap compositions, making it suitable for India’s heterogeneous waste streams, it uses significantly more energy. In a country where coal still fuels 70 percent of electricity, this poses a carbon conundrum.
Figure 2: Circular Hydrometallurgy for Copper Scrap
Source: The Twelve Principles of Circular Hydrometallurgy, Journal of Sustainable Mining
LPE’s higher energy needs could be offset by renewables, making it viable for decentralised micro-refineries. Conversely, upgraded electrorefining suits organised-sector mega plants, provided they secure high-grade scrap, which is a major challenge in India. In either case, the path forward demands policy reforms: tax reduction for copper scrap, research and development (R&D) grants for hybrid systems, and tighter integration with renewable grids.
India’s secondary copper supply chain, which contributes to 54 percent of domestic demand, remains overwhelmingly fragmented and informal. The recycling infrastructure is underdeveloped, with few formal smelting or refining units and an absence of an organised scrap collection system. India is highly efficient at collecting large quantities of scrap; 95 percent-99 percent of end-of-life (EOL) copper is recycled and reintroduced into the system. The issue lies in the quality of copper scrap collected and semi-finished products.
The dominant method of copper scrap processing in India is the direct melting of scrap into semi-finished goods. This direct melting involves melting scrap without refining it through smelting or refining processes. While the method is low-cost, it results in higher impurities.
India is highly efficient at collecting large quantities of scrap; 95 percent-99 percent of end-of-life (EOL) copper is recycled and reintroduced into the system. The issue lies in the quality of copper scrap collected and semi-finished products.
Only 1 percent of copper scrap in India is processed through the refining and smelting routes, compared to 32 percent in China, 30 percent in the European Union and 16 percent in Japan. This omission of the refining process results in impurities such as tin, lead, iron, nickel, and zinc remaining in the metal, degrading the electrical conductivity and mechanical properties of the recycled copper. This reduces the potential for recycled copper to be added back to the raw copper stock and raises safety concerns for end users.
The challenge is further compounded by minimal regulatory oversight and weak enforcement of scrap quality standards. The enforcement of Extended Producer Responsibility (EPR), critical for creating reverse logistics for EOL electronic products, remains weak. Although the government has taken steps such as issuing Quality Control Orders (QCOs) for select copper products, these measures have little influence without broader ecosystem reforms. Furthermore, data on copper recycling in India is limited; the lack of a national registry complicates monitoring compliance and designing policy.
Currently, the goods and services tax (GST) levied on copper scrap is 18 percent. The high tax rate disincentivises the integration of the informal recycling sector, as it makes compliance more expensive than operating through unofficial channels. This leads to operational difficulties, as many of the recyclers operate outside regulatory oversight. Bringing the GST rate down to a level that incentivises bringing recyclers into the tax base will be an important first step. This, in tandem with the introduction of the reverse charge mechanism, will ease the burden on informal recyclers. The government further plans to have a production-linked incentive (PLI) scheme for electronic waste recycling, which can provide an impetus for investments in recycling technologies. However, the success of PLI schemes in similar sectors has so far been limited.
Non-ferrous metal products, including copper products, will be subject to 5 percent recycled content mandates from 2028. Compared to the global average of about 35 percent, a 5 percent mandate for copper products seems deeply inadequate.
Instead, policymakers could focus on implementing copper scrap recycling mandates. Non-ferrous metal products, including copper products, will be subject to 5 percent recycled content mandates from 2028. Compared to the global average of about 35 percent, a 5 percent mandate for copper products seems deeply inadequate. Additionally, enforcing standardised guidelines for responsible recycling will help maintain quality benchmarks. Technology transfers and R&D investments could encourage recyclers to move beyond direct melting and implement technology that ensures high-quality copper.
A circular copper economy would be invaluable for India’s energy transition and could augment domestic supply. However, the sector faces significant technological and structural barriers. With the demand for copper rising and only 1 percent of copper being recycled through formal refining and smelting processes, timely and targeted action is required. Reforms such as reducing the GST on copper scrap, enforcing quality standards, and introducing recycling mandates can help formalise the sector. Formalising the recycling sector will be a complex process, but it can be aided by the establishment of dedicated facilities to incentivise the safe disposal of copper scrap and e-waste. A stronger regulatory framework and R&D investments will also be crucial in facilitating grid integration with renewable energy, which can promote genuine circularity.
Anika Chhillar is a Research Assistant with the Centre for Economy and Growth at the Observer Research Foundation.
Krishna Vohra is a Research Assistant with the Centre for Economy and Growth at the Observer Research Foundation.
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Anika Chhillar is a Research Assistant at the Centre for Economy and Growth, ORF New Delhi. Her work focuses on international trade and industrial policy ...
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Krishna Vohra is a Junior Fellow at the Centre for Economy and Growth. His primary research areas include energy, technology, and the geopolitics of climate ...
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