Scrap Metal Recycling Laws & Regulations You Need to Know




Scrap metal recycling is a booming industry in India, contributing significantly to the economy and sustainability efforts. However, scrap metal recycling laws play a crucial role in ensuring that the process is legal, safe, and environmentally friendly. Whether you own a scrap recycling company or are planning to sell metal scrap, understanding these laws is essential to avoid legal trouble and maximize profits.

Let's break down everything you need to know about metal recycling regulations in India!

1. Introduction to Scrap Metal Recycling Laws in India

India generates over 25 million tonnes of metal scrap annually, and recycling this metal helps reduce environmental pollution and raw material costs. The government has introduced several scrap metal recycling laws to regulate the industry, ensuring that metal waste is processed safely without harming the environment.

Recycling metal is a win-win situation – it benefits the economy, reduces mining dependency, and creates employment. However, not following legal guidelines can lead to fines or shutdowns. So, let’s explore the laws that govern the scrap metal business in India.

2. Key Government Regulations on Scrap Metal Recycling

2.1 The Environment Protection Act, 1986

This law is the backbone of environmental regulations in India. Under this act:

  • Scrap recycling companies must follow strict pollution control measures.

  • Improper disposal of hazardous metal waste can lead to fines or legal action.

  • Recycling units must get clearance from the State Pollution Control Board (SPCB).

2.2 Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016

  • If you are importing scrap metal, you need approval from the Ministry of Environment, Forest & Climate Change (MoEFCC).

  • Certain hazardous metals like lead, mercury, and cadmium have strict disposal rules.

  • Unauthorized movement of hazardous scrap can attract heavy penalties.

2.3 E-Waste (Management) Rules, 2022

With electronic waste growing at 30% annually in India, metals from e-waste are a major part of recycling.

  • Scrap dealers handling e-waste metals must register under the Extended Producer Responsibility (EPR) system.

  • Metals like copper, aluminium, and silver in electronics must be processed in certified facilities.

2.4 The Indian Factories Act, 1948 & Labour Laws in Scrap Recycling

  • This law ensures worker safety in scrapyards.

  • It prohibits child labour in hazardous scrap metal handling.

  • Companies must provide protective gear to workers dealing with ferrous and non-ferrous metals.

2.5 GST & Taxation Rules on Scrap Metal Trading

Taxation is a key area when dealing with scrap metal.

  • The GST on scrap metal is 18% for ferrous metals and 5% for non-ferrous metals.

  • Scrap dealers must maintain proper invoices and documentation to avoid tax evasion issues.

3. Legal Procedures for Starting a Scrap Metal Recycling Business in India

3.1 Business Registration & Licensing

To start a scrap recycling company, you need:

  • MSME Registration to get government benefits.

  • Trade License from the local municipal corporation.

  • GST Registration for tax compliance.

3.2 Pollution Control Board (PCB) Certification

  • If you are opening a metal recycling plant, you need an NOC (No Objection Certificate) from the State Pollution Control Board.

  • The certificate ensures you follow waste disposal norms and control emissions.

3.3 Compliance with Local Municipal & State Regulations

  • Different states have specific rules on scrap metal collection, sorting, and resale.

  • Always check with your local municipal authority before setting up a scrap yard.

4. Import & Export Rules for Scrap Metal in India

4.1 Bureau of Indian Standards (BIS) Certification for Scrap Import

India imports over 10 million tonnes of metal scrap every year. To ensure quality:

  • Scrap metal importers need BIS certification.

  • Only approved countries can send metal scrap to India.

4.2 Customs Duty & Documentation for Scrap Import/Export

  • Import duties vary by metal type (e.g., steel scrap: 2.5%, aluminium scrap: 5%).

  • Scrap dealers must provide customs clearance documents.

4.3 Ban on Certain Scrap Metal Imports

  • Toxic and radioactive metal scrap is banned in India.

  • Ensure your scrap metal imports meet safety and environmental standards.

5. Safety & Environmental Guidelines for Scrap Metal Handling

5.1 Workplace Safety Measures for Scrap Dealers

  • Workers must wear protective gloves, masks, and boots.

  • Scrap yards must have fire extinguishers and first-aid kits.

  • Heavy machinery should be properly maintained to avoid accidents.

5.2 Environmental Impact & Waste Management

  • India aims to recycle 50% of its metal waste by 2030.

  • Scrap dealers must ensure proper waste segregation.

  • Reusing metals reduces mining and environmental damage.

5.3 Penalties for Violating Scrap Metal Regulations

  • Illegal scrap metal trading can attract fines up to ₹5 lakh.

  • Pollution law violations can lead to business shutdowns.

  • Unregistered scrap dealers may lose their trading licenses.

6. Role of Government & Private Sector in Scrap Metal Recycling

6.1 Government Initiatives Promoting Metal Recycling

  • Make in India encourages scrap metal recycling for self-reliance.

  • National Resource Efficiency Policy (NREP) promotes sustainable scrap management.

  • The government provides subsidies for setting up metal recycling plants.

6.2 Contribution of Private Metal Recycling Companies

Some of the top recycling companies in India include:

  • Tata Steel Recycling – Leading the steel recycling sector.

  • MSTC Limited – A government-backed scrap trading company.

  • Mahindra Accelo – Specializes in automotive metal recycling.

  • Gravita India – Focuses on lead and aluminium recycling.

These companies are investing heavily in advanced metal recycling technology, creating jobs, and helping the environment.

7. Future of Scrap Metal Recycling Laws in India

  • Stricter policies are expected in e-waste and hazardous metal recycling.

  • The government may increase incentives for companies using recycled metals.

  • More rules on carbon footprint reduction in metal production may be introduced.

 8. Conclusion & Compliance Checklist for Scrap Metal Dealers

✅ Register your business and obtain all necessary licenses.
✅ Follow GST & tax regulations to avoid legal trouble.
✅ Obtain a Pollution Control Certificate for your recycling unit.
✅ Ensure safe working conditions and proper waste disposal.
✅ Stay updated with changing scrap metal laws in India.

Scrap metal recycling is a lucrative business in India, but legal compliance is key. By following the right regulations, you can build a profitable and sustainable recycling business while contributing to a greener future!

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