India recycled nearly 3 million metric tonnes of tyres during the financial year 2024-25, but weak monitoring systems, poor product standards and limited industrial demand continue to slow the growth of the country’s tyre recycling sector.
To address these challenges, NITI Aayog has proposed a series of reforms aimed at improving the quality, traceability and commercial value of recycled tyre products. The recommendations were discussed during the national conference “Paryavaran NITI Manthan” held in New Delhi on May 4, 2026. The event was organised by NITI Aayog in partnership with the Material Recycling Association of India.
Experts at the conference said India tyre recycling industry remains heavily fragmented despite handling massive volumes of waste tyres. Of the 3 million metric tonnes recycled during 2024-25, around 1.6 million metric tonnes came from domestic waste while 1.4 million metric tonnes were imported.
However, most recycled materials are still being used in low-value applications because industries remain hesitant to adopt products such as Tyre Pyrolysis Oil and recovered Carbon Black due to the absence of proper quality standards.
According to stakeholders, the lack of standardisation alone may be causing an annual revenue loss of nearly Rs 7,500 crore.
To improve confidence in recycled products, NITI Aayog has proposed national quality standards for Tyre Pyrolysis Oil and recovered Carbon Black. These standards are expected to ensure consistency, reliability and wider industrial acceptance.
The think tank has also suggested procurement guidelines and incentives for industries using recycled materials so that tyre recycling can move beyond low-value uses and become part of a stronger circular economy.
Another major proposal involves improving traceability in the tyre recycling system. At present, waste tyres and crumb rubber are classified under the same HSN code, making it difficult for regulators to track material movement. NITI Aayog has recommended introducing separate six-digit HSN codes for waste tyres and recycled products to improve transparency and reduce illegal diversion into informal recycling channels.
The conference also highlighted the need to formalise informal recycling units. Suggestions included bringing small recyclers under government schemes such as MSME Udyam Assist, offering financial support and even granting one-time waivers of past environmental liabilities to help them transition into the formal economy.
Taxation emerged as another key issue. Currently, recycled tyre products attract an 18 per cent Goods and Services Tax. Industry representatives argued that this high tax discourages businesses from adopting recycled materials. NITI Aayog has proposed reducing GST on recycled tyre products to 5 per cent in order to make them more competitive and encourage formal recycling.
The think tank also pointed out the tax imbalance between Tyre Pyrolysis Oil and conventional petroleum fuels. While petroleum products are outside the GST framework, Tyre Pyrolysis Oil falls under GST, making it less commercially attractive. Suggestions included aligning tax treatment or offering GST credits to refineries using recycled oil.
Since pyrolysis accounts for the majority of tyre recycling in India, nearly 2.68 million metric tonnes during 2024-25, tighter regulation of pyrolysis plants has also been proposed.
Recommendations include mandatory continuous emission monitoring systems for all pyrolysis units to ensure environmental compliance. The government is also considering allowing the import of waste tyres for pyrolysis only if the plants are capable of producing recovered Carbon Black.
In addition Tyre Pyrolysis Oil generated from imported tyres may be permitted for use in refineries and selected industries, while carbon char waste should be further processed into recovered Carbon Black to maximise resource recovery.
Many of these recommendations reflect earlier concerns raised by the Centre for Science and Environment, which had highlighted issues such as weak enforcement, informal recycling and poor traceability in India’s waste tyre sector during its 2025 Waste-Tyre Dialogue.
India is currently the world’s seventh-largest tyre producer with a global market share of around 3 per cent. During 2024-25, the country produced 4.2 million metric tonnes of tyres, with 2.5 million metric tonnes consumed domestically and 1.5 million metric tonnes exported.
Despite this rapid industrial growth experts say the recycling ecosystem has not kept pace. Policymakers now believe that stronger standards better taxation policies and stricter environmental monitoring will be essential to build a more sustainable and value driven tyre recycling system in the coming years.