From Hitachi, Havells, Voltas to Samsung — why electronic makers are unhappy with India’s e-waste recycling cost

Several companies such as Daikin, Hitachi, Havells, Voltas and Samsung reportedly sued the Centre between November and March, seeking to quash the new pricing rules in its E-waste policy. These electronics companies said the cost they must pay to recyclers is too high.

What India's new e-waste rule says

In September last year, India set a floor price that electronics makers must pay recyclers. The move aimed at formalising the sector and encouraging investment in e-waste management.

The government's new rules mandate a minimum payment of 22 rupees (25 US cents) per kilogram to recycle consumer electronics and 34 rupees/kg for smartphones.

Makers of heavier devices such as air conditioners are likely to be hit hardest because their per-unit recycling cost has risen by a greater amount compared with makers of lighter gadgets like smartphones, the Reuters stated in its exclusive report.

Four companies sue Indian govt

According to Reuters, four companies have sued the Indian government over the measures, which they say will heighten compliance woes and unsettle businesses.

Johnson Controls-Hitachi, Japan's Daikin, India's Havells and Tata Group's Voltas each sued the government between November and March to quash the pricing rules, the report added.

Samsung and LG didn't sue the government but signaled concern. LG India's December IPO prospectus warned without specifics that higher recycling rates "had a significant financial impact on our company".

Why are companies unhappy?

1. 'Tripled recycling costs'

Court papers and lobbying letters seen by Reuters allege that the Centre's new rules require electronics companies to pay significantly more to recycle air conditioners, refrigerators, TVs and other appliances.

A Reuters review of hundreds of pages of non-public court papers and letters to the government by an industry group representing Samsung and LG reveals the impasse over the new rates, which the industry says have roughly tripled manufacturers' recycling costs.

In court, Johnson Controls-Hitachi was the only company to reveal what it previously paid for recycling: 6 rupees per kg, or 7 US cents. That figure has now almost quadrupled.

The Consumer Electronics and Appliances Manufacturers Association, which represents LG and Samsung, among others, reportedly wrote to the government in November that e-waste compliance expenses had risen to 2% to 8% of production costs.

The group asked environment officials to reconsider the pricing rules.

2. 'Measures are unconstitutional'

The companies said in submissions to judges, "The measures are unconstitutional, exceed the government's powers under environmental law, and raise compliance costs manifold."

Daikin said no Indian government had ever previously drafted policies with the "sole intention" of providing financial gain to some businesses — in this case recyclers — at others' expense.

Voltas predicted a "cascading effect" on product prices.

Meanwhile, Samsung declined to comment. However, sources told Reuters that Samsung had urged New Delhi not to interfere in commercial dealings with recyclers.

How has govt responded?

The government has called for the cases to be dismissed, Reuters added. In a March 18 submission, the environment ministry urged the judges to dismiss the lawsuits, saying it was "reasonable" and within its powers to fix prices.

The ministry said the alternative of letting companies and recyclers determine prices may not account for all costs of environmentally sound waste management. It said it wanted to prevent a "race to the bottom" in pricing.

The Ministry of Environment didn't respond to Reuters queries about the pricing rules and the industry's response.

India's e-waste

India is the third-biggest e-waste generator behind China and the US. In line with global trends, India's e-waste reached 1.7 million metric tons in 2023-24, more than doubling in six years, Reuters reported.

Government data revealed that only 43% of the country's e-waste last year was recycled and at least 80% of the sector comprises informal scrap dealers, whose methods can pose environmental and health risks. Here's a look at data from previous years:

The government says there are 322 authorised recyclers in the country. But informal waste handlers flourish nationwide, using methods such as open burning and acid leaching to extract metals and components, which can release hazardous materials.