FSSAI delays push India’s PET recycling industry toward financial collapse – warns APR Bharat

INDIA – A regulatory bottleneck has placed India’s PET recycling sector on the edge of a financial crisis, industry body Association of PET Recyclers (Bharat), or APR Bharat, has warned.

The delay in issuing food-contact licences by the Food Safety and Standards Authority of India (FSSAI) could render new investments worth ₹7,500–8,000 crore (US$936.1m) as non-performing assets (NPAs), threatening the survival of dozens of recycling companies.

The industry has built a production capacity of 4 lakh metric tonnes (MT) of recycled polyethylene terephthalate (r-PET), primarily meant for food and beverage packaging.

The investments—most of which rely heavily on debt financing—were made in anticipation of robust demand triggered by government policy mandates.

In 2022, the Ministry of Environment, Forest and Climate Change (MoEFCC) issued guidelines requiring beverage manufacturers to include at least 30% recycled content in PET bottles by April 1, 2025.

Simultaneously, FSSAI released norms to govern the recycling of post-consumer PET into food-grade material.

Based on this regulatory direction, industry players commissioned new plants using EFSA- and US FDA-compliant technologies. However, only five licenses have been granted so far.

Fifteen fully operational plants are now awaiting regulatory clearance, with nine applications pending with FSSAI since December 2024.

Revised guidelines, which were expected months ago, were only notified in the last week of May 2025—well past the industry’s planning timeline.

“These delays have left our members in limbo,” said Shailendra Singh, Director General of APR Bharat.

“Most of these investments became operational in early 2025, and without regulatory clearance to begin commercial production, plants remain idle. About 50% of the funding came through bank loans. Any further delay risks pushing these accounts into NPA territory.”

Singh also stressed the broader socio-economic impact, noting that the r-PET industry has the potential to create 10,000 direct jobs and support over 2 million informal workers who collect and sort post-consumer PET waste.

The current situation has not only endangered private investments but also jeopardized India’s circular economy ambitions and sustainability goals tied to plastic waste reduction.

Industry stakeholders are urging FSSAI to expedite the licensing process to avert an imminent financial and environmental setback.

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