In a world where ‘development’ has for centuries been synonymous with ‘depletion’ — and continues to be so, alarmingly — the concept of Circular Economy (CE) has emerged as a harbinger of hope in more ways than one. While the idea itself is decades old, it has gained prominence over the last 15 years or so, with the global community waking up to its possibilities and necessity.
CE: More relevant than ever
Unlike the widely followed linear economy model, which operates on the principles of extraction (of resources), manufacture, use and dispose, CE stresses on sustainable and environment-friendly business models rooted in zero-waste practices. The concept is based on three pillars that addresses the most pressing concerns of modern world — reducing waste and pollution, restoring natural ecosystems and sustainable use of natural resources, and extending the lifespan of materials through reuse and recycling.
The Global Waste Management Outlook 2024, published by the United Nations Environment Programme (UNEP) is an eye-opener. According to the report, if the world follows CE practices, the volume of municipal solid waste generated globally could reduce from more than 4.5 billion tonnes to less than 2 billion tonnes. It is also seen as an efficient way to tackle uncontrolled waste. Adopting CE is touted to bring it down to around 630,000 tonnes — a decrease of more than 40 per cent — by 2050. The fact is vouched by the World Economic Forum (WEF) too. In short, it advocates development with responsibility, towards the planet, and the future generations that will inhabit it.
A promising business mode
Along with nurturing the planet, Circular Economy is a promising business model as well. Many global giants have already embraced it, and as per the research report titled “Global Circular Economy Market Insights Forecasts to 2033”, the worldwide CE market is expected to reach a whopping USD 1.9 trillion by 2033, with a CAGR of 13.10 per cent between 2023 and 2033. In a news that bodes well for India, the Asia Pacific region is expected to witness the fastest growth during this period.
Kings Research reveals that multinational corps like Adidas, IKEA, PepsiCo, Procter & Gamble, and Coca-Cola are some of the big names who are already treading the CE path. Be it IKEA’s strategy to use recycled materials or PepsiCo opting for sustainable packaging, every step, no matter how small, is a significant one.
Circular Economy in India
As the country with the largest population in the world, India needs to urgently shift completely from a linear economy to CE. The figures are staggering. According to a government report, India’s material consumption has witnessed a six-fold increase in 45 years (1970 to 2015), from 1.18 billion tonnes to 7 billion tonnes (Source: The EAC-PM or the Economic Advisory Council to the Prime Minister working paper series: India’s tryst with a circular economy).
This figure is slated to touch 14.2 billion tonnes by 2030. There’s more, India’s resource extraction figures are 1,580 tonnes per acre, which is an alarming 251 per cent higher than the global average of 450 tonnes per acre. Our recycling rate is embarrassingly low at 20 per cent, and we are ‘third rank holders’ when it comes to countries with highest greenhouse gas emissions. With a clear intent to transition into a CE, the Government of India has launched many initiatives and policies over the past few years.
The Economic advantages
Adopting CE practices has many advantages from an environmental and social perspective as well. Let us also dwell more on the economic benefits. To begin with, a decrease in waste generation and material consumption can save a lot of costs for businesses.
They will create numerous new avenues for businesses in areas like repurposing, remanufacturing, remodelling, recycling and sustainable product design.
With a huge spurt in young population, job generation is one of the biggest challenges our country is facing today. The shift from linear to circular economy will breathe fresh life into economic growth and also create millions of new jobs.
Circular Economy Investment: A wise option
Following the global trend, India is witnessing an impressive rise in the number of CE business ventures. The country’s business and tech giants such as Reliance Industries, Infosys, Tata Steel and Larsen & Toubro are leaning towards CE practices. Not just established businesses, as per April 2025 data, there are 580 CE start-ups in India, out of which 174 have secured funding (tracxn.com report: Explore circular economy startups in India).
Their number is poised for further growth in the coming years. CE practices are already gaining traction in key sectors such as agriculture, automobile, construction, electronics, waste management, and textiles, among others. In the coming years, it’s expected to grow further.
Figures show that the country’s CE ventures had drawn investments worth USD 1.8 billion (inc42.com report: The future of circular economy startup investment trends and predictions) between 2016 and 2021. Studies also predict India’s CE market will touch USD 45 billion by 2030. And by 2050, this figure is expected to rise to a whopping USD 624 billion (Financial Express report: Your money still early days for circular economy focused stocks).
Key sectors for investors
Talking about CE start-ups from an investment point of view, let’s look at the key areas that are likely to attract more funding:
Start-ups that offer cutting-edge recycling technology, especially when it comes to plastic waste, e-waste, construction waste, etc. will be a hot favourite among investors. Packaging materials that are reusable, biodegradable and eco-friendly will become the need of the hour. So, CE start-ups in this sector can expect a rush of investors.
CE is going to be popular, literally. We are already seeing growing popularity for reused, repurposed and recycled fabrics, and it’s just going to get bigger. Sustainable fashion start-ups, including rental services, will also be able to raise funding. Sectors such as agriculture and animal husbandry also hold immense potential as investment options. The same holds true for water management technology and bio-waste disposal techniques employing CE practices.
Conclusion
The concept of Circular Economy is based on seven pRinciples — Reduce, Recycle, Reuse, Remanufacture, Redesign, Repair, and Refurbish. In a country like India, which is strapped for resources and is bursting at the seams with a growing population, Circular Economy holds a lot of promise and potential.
