Shashank Verma, CEO of Indian sustainable packaging and post-consumer low value plastic waste recycling company Recinloop Innovations, calls for formalizing the waste collection system and shifting corporate strategies to ensure sustainable recycling practices.
Verma says EPR frameworks intended to support recycling efforts are undermined by a corrupt system benefiting middlemen.
Regulatory inconsistencies across Indian states enable fraud, with credits claimed for non-existent recycling activities.
India’s recycling targets and corporate sustainability goals are at risk due to dwindling waste supply.
India has almost 95-96% recycling rate for PET bottles, the highest of anywhere in the world because of the ‘rag-picking’ system.
The global push for a circular economy is built on a simple, powerful promise: to turn waste into a resource, creating a sustainable loop that benefits both the planet and the people who do the hard work of collection and recycling. In India, this promise was codified into ambitious laws like the Extended Producer Responsibility (EPR) framework, a system designed to make corporations pay for the plastic waste they create. On paper, it’s a perfect solution.
In reality, the system is failing. The very framework intended to empower the nation’s most vulnerable workers has been co-opted, creating a corrupt ecosystem that enriches middlemen while leaving those at the bottom in worse conditions than before. The money is flowing, but it’s not reaching the people doing the work.
Shashank Verma is the CEO of Recinloop Innovations, a company focused on manufacturing sustainable packaging and recycling post-consumer plastic waste. Verma is, in his own words, “half the value chain”, as he both recycles post-consumer flexible plastic waste and in turn manufactures packaging using recycled plastic resins. This vantage point gives him a ground-truth perspective on a system he says has been twisted into a racket.
The limitations of “top-down” design: “It is more of a middleman cartel rather than the EPR empowering the rag pickers,” Verma says. The EPR law was created to provide a vital subsidy, making the low-margin business of recycling flexible plastics—which yields a meager 7-8% EBITDA—financially viable. But the system’s “top-down” design has allowed intermediaries to intercept the funds. “A brand is spending thousands of dollars, but ultimately it is not reaching the actual people on the ground.”
Where circularity takes place: The true price of this failure is paid by the informal waste collectors, or rag pickers, who Verma calls the undisputed “backbone of the system.” While corporations fulfill their legal obligations, these workers toil, earning as little as one to two dollars a day. “That is the kind of environment where actual circularity is being taken care of.”
The exploitation is systemic. Rag pickers are locked out of the formal system because they cannot provide the “traceability documents, invoicing” that corporations require. This forces them to sell their collected materials to organized middlemen who can navigate the bureaucracy. The problem is compounded by a fragmented regulatory landscape where each of India’s states has different rules for plastic waste management, creating cracks in the system that the cartel exploits. This dynamic enables outright fraud, including the “fudging of the data,” where credits are claimed for recycling that never happens.
A plant may be running at full capacity, but cannot be expanded further due to a lack of access to segregated plastic waste and broken collection systems on the ground.
While the social failure is stark, it is rapidly becoming a full-blown business crisis. Corporate complicity, Verma argues, is rooted in a willful blindness to the realities on the ground. He explains that “circular economy heads” prefer to work with clean, professional operations like his, demanding paperwork but refusing to engage with the gritty source of their supply chain. “They don’t want to come along with me to the place from where I am procuring the waste,” he says.
PET project: The disconnect ignores a crucial proof point: the informal system is hyper-efficient when properly incentivized. “India has almost 95-96% recycling rate for PET bottles, the highest of anywhere in the world because of the rag-picking system,” Verma notes. But because there is no incentive to collect low-value plastics, that material is left to languish, creating an inevitable supply chain plateau for low value flexible plastics recycling. The social failure is now a direct threat to corporate sustainability goals.
The human toll: “A plant may be running at full capacity, but cannot be expanded further due to a lack of access to segregated plastic waste and broken collection systems on the ground,” he warns. The problem isn’t just logistical; it’s a matter of human dignity. “When waste is mixed with sanitary pads and vaccines, it’s almost inhuman for any team to segregate it.”
The (re)cycle is broken: The solution, according to Verma, begins with a simple, foundational step. “First is formalization, because if the system doesn’t even recognize the formal existence of rag pickers and waste management as an industry, how will they incentivize them?” he asks. Beyond that, it requires a fundamental shift in corporate philosophy. “Corporate strategy has to move from the obligation of not getting caught by the government to a strategic investment that will benefit the brand in the long term.”
Empowering the rag pickers isn’t charity; it’s the only way to secure a future supply of recycled material. India’s mandated recycled content targets are increasing year-on-year, creating a collision course between rising demand and a broken, dwindling supply. The clock is ticking, and Verma’s final warning is unequivocal. “If we actually want to achieve our future recycling targets, we need to empower the system as soon as possible. Otherwise, recyclers like me will soon run out of waste to process, with heavy capex investments and capacities lying idle, especially in the case of low value flexible plastics.”
