Key Points:

• Global electronics firms, including Samsung and Daikin, challenge India over increased recycling costs for e-waste.
• New government regulations require manufacturers to pay significantly higher fees for recycling appliances, raising concerns over compliance.
• The electronic waste problem in India is escalating, with only 43% of e-waste currently recycled, and informal sectors posing health risks.

NEW DELHI: India's ongoing struggle with e-waste has sparked a fierce confrontation between global electronics manufacturers and the Indian government, as companies like Daikin, Hitachi, and Samsung oppose new regulations that significantly increase the costs associated with recycling appliances, including air conditioners and televisions. The rising fees are part of a broader strategy to address India's mounting e-waste crisis, where only 43% of >1.7 million metric tons generated annually are recycled, leaving over 80% managed by informal scrapyards that often employ harmful practices.

In response to the situation, the Indian government has implemented a minimum payment structure for recyclers as of September 2023. The move is designed to formalize the recycling sector and encourage investment in sustainable waste management practices. However, manufacturers argue that the new prices have drastically tripled their recycling costs, fuelling anxiety over compliance and potential impacts on product prices.

According to a review of court documents and lobbying letters, companies have banded together to challenge these pricing policies in front of New Delhi's judges, claiming the regulations are unconstitutional and an overreach of government authority. The government, however, has urged judges to dismiss the cases, maintaining that the measures are essential for ensuring environmentally sound waste disposal and preventing a "race to the bottom" in pricing.

Daikin publicly expressed discontent, stating that past Indian policies never aimed to generate revenue for a select group at the expense of others. This sentiment echoes concerns from industry leaders, such as Voltas, who anticipate that the new compliance costs will trigger a "cascading effect" on the pricing of consumer electronics.

Amid the rapid growth of the Indian consumer electronics market, projected to hit $62 billion in 2023, companies are struggling to align their profit margins with escalating recycling fees. As urbanization drives demand, the stakes rise even further, especially when it comes to meeting both regulatory requirements and consumer expectations.

The Environment Ministry's push for compliance reflects India's longstanding resistance to foreign companies' demands for leniency on regulatory measures. Notably, major firms like Walmart and Amazon have encountered similar hurdles in their attempts to navigate India's regulatory landscape.

Informal recycling practices heighten the urgency of establishing a more formalized and safer system, particularly as the government reports only 322 authorized recyclers, leaving a significant gap filled by unscrupulous practices. Scrap dealer Mustakeem Malik represents this informal sector; he shared that he earns an average of ₹50,000 (approximately $580) monthly dismantling used electronics with little thought for environmental safety.

Under the new rules, manufacturers are now required to pay 22 rupees (25 U.S. cents) per kilogram for general electronics recycling and 34 rupees per kilogram for smartphones. Consequently, those producing heavier devices, such as air conditioners, will face steeper costs compared to lighter goods.

Research suggests that India's recycling efficiencies lag far behind global standards, with rates in the US and China significantly higher. Nitin Gupta, CEO of Indian recycling firm Attero, remarked on the disparity, emphasizing that the new rules are not just a burden, but a necessary step towards achieving scientific capacities in e-waste management.

Despite these sentiments, the electronics manufacturers are on edge; India's Consumer Electronics and Appliances Manufacturers Association has noted that compliance costs have surged to between 2% to 8% of production expenses. With concerns voiced through official letters, many firms, including LG and Samsung, are weighing their options as costs soar. Additionally, Samsung has reportedly indicated to Indian officials that its recycling expenditures could increase five to 15 times the previous levels.

The struggle for a balance between regulatory compliance and sustainable business practices continues, as companies navigate this complex landscape while the e-waste issue looms larger than ever. For further details, see the reporting from Reuters, Channel News Asia, India Times, and South China Morning Post.