India’s ₹10,000 crore recycled plastic bet hits policy roadblock

The government announced plans to roll out rules requiring at least 30% recyclable PET in bottles by April last year. Companies invested in setting up capacity, but the final notification has been delayed as the government has hinted at easing rules. This uncertainty has hit demand. NewsIndia’s ₹10,000 crore recycled plastic bet hits policy roadblock Vijay C Roy, Rituraj Baruah4 min read24 Feb 2026, 05:45 AM ISTThe recycled variant of PET is 12-15% costlier than conventional PET, making the latter more attractive(AFP)SummaryThe government announced plans to roll out rules requiring at least 30% recyclable PET in bottles by April last year. Companies invested in setting up capacity, but the final notification has been delayed as the government has hinted at easing rules. This uncertainty has hit demand.India’s plastic bottles industry faces a ₹10,000 crore quandary: investments in a costlier, recyclable, food-grade material risk turning dud as regulatory uncertainty has slowed adoption by beverage makers.India drafted rules in February 2022 to make it mandatory for beverage-grade bottles to contain at least 30% recycled polyethylene terephthalate (r-PET). It’s a kind of material that can be fully recycled. The new Plastic Waste Management Rules were scheduled to roll out from 1 April last year, and the industry was given three years to prepare for the transition.In anticipation of the enforcement, bottle makers invested in setting up r-PET capacity. However, the environment ministry’s draft notification in June 2025 proposed relaxing the norms, allowing beverage companies to carry forward any shortfall in meeting recycled plastic usage targets for 2025-26 for up to 3 years, starting 2026-27.More than eight months later, the ministry has yet to release the final notification, causing uncertainty. The provision has dampened the immediate demand for r-PET and impacted capacity utilization, said industry representatives. Key consumers of PET bottles include beverage makers such as PepsiCo India, Bisleri International, and Coca-Cola.Also Read | Recycled plastic, renewed worriesIndia’s PET consumption is estimated at around 12-14 lakh tonnes a year. Excluding the 2-2.5 lakh tonnes consumed by pharma, sheets, and straps sectors, the total available market for r-PET is 9.5-12 lakh tonnes per annum, according to Yash Sharma, director, Ganesha Ecosphere, a PET bottle recycler.The Food Safety and Standards Authority of India has approved a capacity of 3.5 lakh tonnes of r-PET, roughly accounting for 30% of the PET demand from consuming industries.“This capacity is already available in the market. Capacity is not a constraint at all to fulfil the obligation to use 30% r-PET,” said Sharma. “Given the relaxation, the actual utilization at present is only 1 lakh tonne per annum, which is far below the industry capacity. This is killing the players."‘Industry paralyzed’Goutham Jain, director-general at Association of PET Recyclers-Bharat (APR Bharat), said the food-grade r-PET sector invested more than ₹10,000 crore in setting up advanced recycling facilities equipped with globally accredited technologies."The changes in policy decisions have paralyzed the entire r-PET ecosystem with industry players unable to make their interest obligations and financial commitments,” Jain said. “Their expansion plans to match the growing mandate requirement in the near future have been stalled, and investor confidence has been significantly eroded.”According to industry stakeholders, the sector is fully prepared to meet the requirements for 2025-26 and beyond. They claim these plants comply with stringent standards laid down by agencies such as the European Food Safety Authority and the U.S. Food and Drug Administration.An additional three-year window is unnecessary and would penalize those who have invested heavily to align with the government’s mandates, according to Jain.The recycled variant of PET is 12-15% costlier than conventional PET, making the latter more attractive, according to an executive in a bottling company, who spoke on condition of anonymity to speak candidly.Also Read | Coca-Cola rolls out 100% recycled PET bottles for small packsQueries mailed to the Union ministry of environment, forest and climate change, PepsiCo India, Bisleri International, Coca-Cola, Varun Beverages and the Indian Beverage Association remained unanswered until press time.Threat to livelihoodsFacing losses, the plastic packaging and recycling industry has even written to the environment ministry expressing concern over a proposed amendment to the Plastic Waste Management (PWM) Rules, with the latest communication sent on 23 January.According to recyclers, the PET recycling value chain sustains the livelihoods of close to 5 million workers nationwide, a majority of whom are marginalized. PET waste alone accounts for nearly 50% of this workforce's daily income, particularly in the collection and scrap segment.The industry has said that regulatory certainty is critical to sustaining investment momentum and strengthening India’s circular economy objectives, especially as the country seeks to scale up food-grade plastic recycling under its extended producer responsibility framework."Recycling of polyethylene terephthalate (PET), w