India recycled around 3 million metric tonnes of tyres in FY24, but weak traceability, poor standards and limited demand continue to hold the sector back.
NITI Aayog has proposed national standards for Tyre Pyrolysis Oil and recovered Carbon Black, separate HSN codes, GST rationalisation and tighter regulation of pyrolysis units.
The proposals echo earlier concerns raised by the Centre for Science and Environment on informal recycling, taxation gaps and weak enforcement.
A one-day national conference, Paryavaran NITI Manthan, held in New Delhi on May 4, 2026, has brought renewed attention to the urgent need for reform in India’s waste tyre management system.
Convened by central think tank NITI Aayog in collaboration with the industry group Material Recycling Association of India, the event brought together policymakers, regulators and industry leaders to chart a path towards a more efficient circular economy. The discussions made one thing clear: while India is recycling large volumes of tyres, the system itself is far from efficient.
In 2024-2025, India recycled around 3 million metric tonnes (MMT) of tyres — 1.6 MMT from domestic waste and 1.4 MMT from imports. Yet, despite these volumes, the sector struggles to generate high-value outputs.
The core issue lies in fragmentation. Weak traceability, a lack of standardisation and limited market demand for recycled products continue to hold the sector back. As a result, much of the recycled material is “downcycled” into low-value applications.
A major gap identified at the conference was the absence of clear standards for products such as Tyre Pyrolysis Oil (TPO) and recovered Carbon Black (rCB). Without quality benchmarks, industries remain hesitant to adopt these materials. Stakeholders estimate that this alone leads to a loss of nearly Rs 7,500 crore in potential annual revenue.
To address these challenges, NITI Aayog outlined a series of focused interventions.
Standardisation and circular procurement of recycled outputs
Improving traceability and formalisation
Rationalising taxation
Tightening regulation of pyrolysis
Introducing national standards for TPO and rCB was recommended to ensure the quality, consistency and reliability of these products. At the same time, NITI Aayog proposed developing procurement guidelines and offering incentives to industries that use recycled materials. The aim is to shift recycling from low-value uses to more productive, high-value applications.
Currently, waste tyres and crumb rubber fall under the same HSN classification, making it difficult to monitor their movement. Introducing separate six-digit HSN codes would improve transparency and allow regulators to track whether tyres are properly recycled or diverted into informal channels.
To further reduce leakages, bringing informal recyclers into the formal system was also emphasised. This could be done through platforms such as the MSME Udyam Assist initiative, along with financial support and even one-time waivers of past environmental liabilities to ease their transition.
High Goods and Services Tax (GST) rates — currently at 18 per cent — on recycled tyre products were identified as a key barrier. Reducing GST to 5 per cent could make recycled products more competitive and help accelerate the transition from the informal to the formal sector. It was also proposed that the tax disparity between TPO and conventional petroleum products be addressed, as TPO falls within the ambit of GST while petroleum does not. Aligning the tax treatment, or offering GST credits to refineries using TPO, could help create a more level playing field and encourage adoption.
Since pyrolysis accounts for the majority of tyre recycling in India, or 2.68 MMT in 2024-2025, improving its regulation is critical. The recommendations include mandatory continuous emission monitoring for pyrolysis units.
The government is also planning to allow the import of waste tyres for pyrolysis, provided the plant has the facility to produce rCB. Additionally, it has been proposed that TPO derived from imported tyres should be allowed for use in refineries or select industries, and that carbon char should be further processed into rCB to ensure optimal use.
These recommendations are not entirely new. Delhi-based think tank Centre for Science and Environment (CSE), in its 2025 Waste-Tyre Dialogue, highlighted similar concerns — ranging from poor traceability and informal recycling to gaps in taxation and enforcement. The alignment between CSE’s findings and NITI Aayog’s proposals reinforces the need for urgent and coordinated policy action.
India’s tyre industry is the seventh largest in the world, with a 3 per cent global market share. In 2024-2025, the country produced 4.2 MMT of tyres, with 2.5 MMT consumed domestically and 1.5 MMT exported. However, the recycling ecosystem has not kept pace with this growth. The gap between production and efficient end-of-life management continues to widen.
While Paryavaran NITI Manthan sets a clear direction for moving towards a more structured and value-driven circular economy, the real test will lie in implementation. Whether, and how, these recommendations translate into change on the ground remains to be seen.