Circular Economy, Jobs & the New Indian Middle Class

Photo by ReCircle

India, one of the fastest-growing economies in the world, has seen rapid urban population growth and the rise of a new middle class. Its industrial growth has also resulted in a higher purchasing power and increased consumerism.

This growth has generated large volumes of hazardous waste, requiring careful management. India has set the objective of developing 100 smart cities functioning on sustainable waste management practices. As a result, the circular economy has opened doors for green jobs related to recycling, repairing, manufacturing, resource management, and renewable energy sectors. As well as business models in waste management streams, through the creation of integrated waste management facilities.

Now, the country is on a journey towards a circular economy whose activity is set to reach $45 billion by 2030.

Policy Support

India is ripe for a vast range of circular economy activities and for a demand for green technologies. The country adopted policies focused on circular economy practices, suchas the Extended Producers Responsibility, which legally binds producers to manage post-consumer waste, reduce plastic and e-waste.

The National Mission on Enhanced Energy Efficiency (NMEEE) programme aims to modernise outdated equipment, increasing the demand for skilled technicians and encouraging the adoption of forward-thinking policies that involve the 5R concepts and other circular concepts.

The Production Linked Incentive (PLI) scheme for green energy technologies provided businesses with essential funds to adopt circular economy principles. Tax incentives for environmentally friendly products have increased adoption rates of solar panels and electric vehicles by 35%. Maharashtra's plastic buyback scheme has increased recycling rates by offering financial incentives for the return of plastic bottles. Together, these policies and incentives are developing an environment where circularity, green jobs, and circular business models can bloom.

Economic and Job Growth

Between 2011 and 2015, the rapid economic growth of the country helped lift over 90 million people out of extreme poverty. The adoption of the circular economy in India alone is projected to create 14 million green jobs by 2030, and formal training could employ over a million people in e-waste recycling alone. To put that into scale, India’s labour force is 610 million, therefore, those green jobs would go only for 2.5% of the total population, making little impact. All efforts must lead to the creation of opportunities for employment and lifting millions of people out of extreme poverty, especially given the growing need for skills in services, recycling, remanufacturing, and repair.

Initiatives such as Swachh Bharat Mission (SBM) and the National Mission on Enhanced Energy Efficiency (NMEEE), serve to promote the circular economy and growth of green jobs, whereas the Skill Council for Green Jobs (SCGJ) was created to prepare workers for jobs in sustainable manufacturing, renewable energy and waste management.

These events are driving the circular economy to create employment opportunities that reduce poverty, stimulate economic growth, and enable people to join India’s new middle class.

India’s New Middle Class

The rise of India’s middle class is linked to increased consumerism, making India a profitable market for goods and services. Indian consumers, particularly the new educated middle class, are becoming increasingly more interested in circular economy initiatives and aware of green products.

Furthermore, India’s growing economy is credited to manufacturing SMEs across the country. These SMEs have a direct impact on the nation’s rising GDP as they are truly the heart of the economy. Startups and entrepreneurs are thriving in India, with increasing development and innovative solutions in sustainable packaging solutions, biodegradable products, waste management, and recycling. Several circular economy businesses have attracted significant investments of up to $1.8 billion in the past five years, demonstrating the potential of new business models in managing and recycling waste.

Banyan Nation, for example, uses advanced technologies to recycle plastic waste into high-quality reusable plastic. It can recycle annually over 1,200 tons. Saahas Zero Waste offers integrated circular waste management solutions to urban enterprises and homes. ReCircle manages waste segregation and recycling in urban cities (Kumar, 2025).

Thus, a new middle class of SMEs, startups, and entrepreneurs has emerged in India, and if supported by educated consumers and proper procurement policies, it can tur sustainable businesses into well-known, reputable companies that lift millions out of poverty.

Current Challenges

• Job Skills Gaps and Lack of Jobs

Recent discussions on social media highlighted the discussion of lack of job opportunities for Indians due to tight competition among many educated graduates.

Despite the potential that the circular economy holds for the future of India, there is no indication that it will supply enough jobs for the most populated country in the world. Although there are existing initiatives and programmes in practice for the development of circular and green skills, there is a large gap in skilled professionals and throughout the value chain.

Many of these graduates are not taught practical work skills during their university studies and graduate without possessing applicable knowledge. Just 25% of India's waste management personnel have formal training in sorting and processing. Waste management and circular economy vocational programmes continue to be underfunded and neglected. This further enhances the restlessness that Indians share online about this reality.

• Unsustainable Growing Consumption

The growing consumption impact of the expanding middle class reflects an increase in waste generation, which is a major challenge for India’s circular economy. Indian consumers’ awareness of green products does not translate to a rise in green purchases, primarily because they are unaware of the actual environmental benefits of these products. Another factor is the price of products, which is the central preoccupation forIndian consumers. Despite these factors, there is a growing demand for eco-friendly goods in India’s market.

• Costly Circular Investments

The dominance of linear economic models by companies is a reality that opposes the adoption of circular economy practices in India. Funding for circular economy projects in India is limited due to struggling priorities for traditional infrastructure investments. 75% of Indian manufacturing companies prefer linear production models due to cheaper production processes and techniques.

Moreover, Indian SMEs struggle to afford circular technologies such as waste-to-energy facilities due to high costs. Recycling startups and SMEs also lack the funding to upgrade their circular technologies, making it difficult to compete with larger companies.

• The Informal Sector

  
  

Although the informal sector’s contributions are vital for waste management in India, with recyclers and waste pickers creating innovative techniques for material recovery and segregation, the sector faces challenges in incorporating itself with circular economy solutions. The informal sector uses outdated technologies, making the implementation of circular technologies unsuccessful. Over 90% of informal recyclers operate in conditions that pose risks to their health and the overall environment.

• Policy Gaps and Weak Regulation Implementation

  
  

Although regulations such as the Plastic Waste Management Rules 2016 and the E-

Waste Management Rules 2016 exist, the enforcement of these regulations is weak. Inconsistent state and federal regulations frequently cause misunderstandings and slow down the implementation of circular economy projects.

• Lack of centralised databases

  
  

India lacks a centralised database to monitor secondary material markets, recycling capabilities, or waste sources. This absence makes it challenging to evaluate and track the success of circular projects or develop policies backed by data.

Strenghts and Assets

Despite the challenges, India has several strengths and assets under its sleeve to accelerate its circular economy transition and create green jobs.

• Advancing Training Opportunities

  
  

Training and capacity-building initiatives must expand as they are crucial to prepare theworkforce for green roles, given the growing need for workers with expertise in the circular economy.

• Multi-stakeholder Collaboration

There is a growing movement across India, where the private sector and small enterprises are showing interest in establishing waste management projects. For waste management to function as a sustainable business, collaboration is necessary among private companies, municipal officers, users, suppliers, legislators, consumers, policymakers, and government officials.

These stakeholders are crucial for waste management to become a booming business sector. Only through coordinated movements and shared collaboration between businesses, consumers and the government will these regulations be taken seriously and fully enforced. Such a partnership will create millions of job opportunities for Indians.

• Empowering the Informal Sector

  
  

Women’s groups in India have launched campaigns to advocate for the rights of waste workers and to establish cooperatives. These campaigns have shifted public perception, brought together diverse stakeholders, and organised waste workers into groups or small businesses that engage with local governments and companies. Although steps have been taken, India’s top leadership must do more to incorporate the informal sector into the circular economy and improve working conditions, given the sector’s critical importance.

Training the informal sector in effective dismantling and recycling practices is crucial for achieving a sustainable and integrated formal e-waste system.

• Addressing Societal Barriers

The circular economy must be effectively promoted to consumers by policymakers and legislators. There needs to be a discussion on India’s values and cultural norms that suppress sustainable practices, not just among consumers, but by the people at large. Economic equality, the caste system and other technical barriers must be discussed and addressed by all stakeholders in society for attitudes to change and the circular economy to be adopted.

Sleeping Giant

India’s significant potential in the circular economy is clear. Recent policy and legislative progress, combined with strong entrepreneurial capacity, have positioned the country to unlock new opportunities that have changed the lives of many. Although challenges persist, India is sure to scale up its circular economy initiatives through a multi-stakeholder collaboration.

Circular economy initiatives can provide lasting routes to better wages and formal employment through repair, remanufacturing, and waste management. It is evident that once India addresses its challenges with full commitment, this sleeping giant will have a profound impact not only on the country but on the globe.