The other side of India's tech boom

Computer recycling is booming in India, but the government has been slow to regulate the industry.

By Daniel Pepper

(Fortune Magazine) -- Far from the gleaming high-tech parks of Bangalore and Hyderabad, 25-year-old Mohammed Zayeed hunches over a raised concrete slab in the slums of New Delhi. With surgical precision he disassembles the backbone of India's booming IT industry for 12 hours a day: removing cream-colored plastic casings from old desktop computers, separating hard drives from circuitboards, and stripping PVC coating from copper wires. He tosses the detritus into towering piles destined for the next link in a long chain of recyclers.

In New Delhi alone about 10,000 people, some young children, dismantle old computers and other equipment known as e-waste - searching for gold, copper, palladium, or anything else to turn into cash. The work can be hazardous. Recyclers expose themselves to toxic metals such as lead, mercury, and cadmium. "We know that it's harmful," says Zayeed, whose monthly income of $75 supports a wife and two children. "But we are poor, so anything that can be recycled is money for us."

E-waste recycling is a booming business in India. A study by Toxics Link, an advocacy group in New Delhi, found that metals from 183 defunct computers could yield as much as $24,000. India currently produces 150,000 tons of e-waste a year and illegally imports at least that amount from the West, says the group's associate director, Satish Sinha. Currently India has only 22 computers for every 1,000 people, but that number is projected to increase to 120 in the next five years.

The government has been slow to regulate disposal. Although it bars the import of used electronics equipment, that prohibition is easy to circumvent, insiders say, by simply labeling the stuff as "mixed scrap metal." And there are no guidelines for domestic e-waste. The Ministry of Environment and Forests, the country's top regulator, is drafting regulations, but B.P. Nilratna, a top ministry official, declined to say when they'll be ready.

India is unlikely to impose any type of taxation or fee to cover recycling costs, as is done in other countries. An estimated 40% of all computers for home use are sold in informal marketplaces that are difficult to monitor. And the more formal PC market is afraid that if costs rise because of a recycling tax, it will lose even more market share.

While new regulations promise a switch to cleaner, safer recycling, that may address only part of the problem. Recycling scrap electronics is profitable only when it comes to computers and mobile phones, says Vinnie Mehta, head of the Manufacturers' Association for Information Technology. Other e-waste that doesn't contain the metals now fetching high prices on global commodities markets, such as fluorescent bulbs, are more costly to recycle. So are air conditioners, refrigerators, and microwaves. "Here in India the disposer of any waste gets paid for it," he says. "It's like cherry picking - what about the rest?"

Government regulations can't come quickly enough for Ravi Agarwal, the director of Toxics Link. He laments that even China, the world's other dumping ground for defunct electronics, "has been much more progressive on what needs to be done," passing legislation regulating e-waste recycling. European firms that have come to India with plans to start recycling centers, he says, are put off by the lack of regulation: "Legislation is not just regulation but enabling."

A few Indian companies aren't waiting. Ramky, India's largest waste-management firm, signed a deal in May with Singapore's Cimelia Resource Recovery to build a $12 million e-waste recycling facility in Hyderabad - the first of its kind in India. Construction is scheduled to begin in August, and the plant is expected to open by the end of the year.

"As long as legislation is not there, the flow [of e-waste] will go to the informal sector," says Yogesh Gupta, Ramky's general manager for e-waste recycling. That is certainly the case for the computer owner at home, but 70% of India's e-waste comes from the business sector. Ramky hopes that once government guidelines are issued, corporate e-waste will head its way.

India has only two government-recognized e-waste recycling facilities, in Chennai and Bangalore. Together they recycle under 1,000 tons a year, less than 1% of India's total e-waste - and less than half the metal and plastic they take in. Industry leaders, like Singapore's Cimelia and Belgium's Umicore, recycle more than 90%.

Efficiency like that would go a long way toward cleaning up India. But it might also leave people like Zayeed seeking other ways to feed their families.  Top of page