As India moves toward stricter sustainability regulations, the fast-moving consumer goods (FMCG) sector is urging the government to reconsider the plastic reuse and recycling mandates set by the environment ministry. The industry claims that the current food-grade plastic recycling and reuse capacities are insufficient to meet the requirements, creating significant compliance hurdles.
Mounting Concerns Ahead of April 1 Deadline
Starting April 1, 2025, the environment ministry’s guidelines will make it mandatory for FMCG companies to incorporate recycled and reused plastic in their packaging. However, industry players argue that India lacks the necessary infrastructure and production capacity to meet these demands. The requirement comes under the ministry’s Extended Producer Responsibility (EPR) guidelines, which impose year-wise recycling targets for plastic packaging, including:
- 30-50% recycled content in 2024-25, with gradual increases in subsequent years.
- 10% reuse of packaging for products sold in 0.9L–4.9L sizes by FY26.
- 70% reuse for packaging above 5L by the same period.
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Challenges in Food-Grade Plastic Recycling
The FMCG sector is particularly concerned about the feasibility of meeting food safety standards. Since 2018, the Food Safety and Standards Authority of India (FSSAI) has prohibited the reuse of plastic packaging below 5 litres, allowing it only for durable containers above 5 litres. Currently, only five factories in India have received FSSAI approval to produce food-grade recycled PET (rPET) plastic. These units can meet only 15% of the industry’s compliance needs, raising doubts about the sector’s ability to adhere to the new norms.
Moreover, the FMCG industry is facing a severe material shortage. High-quality post-consumer PET waste is scarce, and the costly sorting and washing technologies required for production remain a challenge.
Plastic Categories and Compliance Requirements
The environment ministry’s regulations divide packaging into three categories, each with specific recycling targets:
- Rigid Plastic (Category 1): At least 30% recycled content for rigid plastic packaging such as PET bottles.
- Flexible Plastic (Category 2): A minimum of 10% recycled content for wrappers, pouches, and milk or oil packets.
- Multi-layer Plastic (Category 3): At least 5% recycled content for packaging like disposable coffee mugs with thin plastic lining.
Industry’s Demand for a Phased Approach
Given the limited infrastructure, the FMCG sector is pushing for a phased implementation of the recycling targets. Industry bodies have proposed starting with a 15% recycled content target and gradually increasing it by 5% annually, allowing time for infrastructure development and ensuring food safety compliance.
Cost and Food Safety Concerns
The FMCG sector warns that the stringent recycling mandates will lead to higher packaging costs, with estimates suggesting an increase of up to 30%. Smaller companies, in particular, are expected to struggle with rising costs and compliance pressures. Additionally, ensuring food safety through advanced decontamination technologies (such as chemical recycling) is a major challenge, as these technologies are not widely available in India.
Government’s Stance
Despite industry pleas, the environment ministry has shown no signs of revising the recycling targets. Instead, it is focusing on stricter enforcement through amendments to the Plastic Waste Management Rules, 2025, emphasizing traceability and accountability.
The Road Ahead
While India’s push for plastic circularity is a step toward sustainability, the capacity crunch, cost escalation, and food safety concerns present formidable challenges. The FMCG sector continues to advocate for gradual implementation of the norms, urging the government to align the targets with the industry’s infrastructural readiness.
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