Restrictions on scrap metal imports by China and Malaysia to prove a lucrative opportunity for Indian recyclers

Restrictions on scrap metal imports into China, Malaysia and other countries present a golden opportunity for recyclers in India. The global scrap and waste-handling industry has been in a state of disruption since 2017 when previous top scrap importer China announced a ban on most plastic, metal and paper scrap imports as part of a pollution crackdown.

Malaysia then emerged as a top destination for the world’s metal scrap and plastic waste, but it too recently raised purity thresholds on scrap imports that have left global metal recyclers reeling.

For India’s recycling industry, Malaysia’s ban represents a “golden chance” to win new business and establish itself as a global leader in scrap processing, said Dhawal Shah, senior vice-president of the Material Recycling Association of India (MRAI).

India is already a major metals recycler, with around 50 per cent of its steel, 40 per cent on average of all non-ferrous metals, and almost all of stainless steel output coming from secondary sources. Roughly 60 per cent of India’s scrap supply comes from overseas. As India’s consumption grows in the next 10 to 15 years, recycling volumes and rates are also expected to grow, especially in aluminium. 

“We are very frugal-minded here. Anything which has a certain value will be extracted, and it will be recycled,” said Shah, who also heads the non-ferrous metals division at the Bureau of International Recycling.

The scrap import restrictions imposed by China and Malaysia were designed to prevent the countries from becoming the dumping grounds for the world’s trash.

Shah said India’s recycling sector was well positioned to benefit from their step back, as long as government regulations were well thought out, with clear policies in place to ensure scrap is processed in an environmentally friendly way. Shah said India’s expected jump in renewable energy output, mainly from solar, will also provide a large supply of recyclable material as photovoltaic panels are replaced.

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