India’s recycled PET (r-PET) industry faces a looming financial crisis due to prolonged delays by the Food Safety and Standards Authority of India (FSSAI) in granting manufacturing licenses. According to the Association of PET Recyclers (Bharat) – APR Bharat, a majority of companies that have invested heavily in this sector are now on the brink of bankruptcy.
₹8,000 Crore Investment Left in Limbo
The r-PET industry has built a total installed capacity of 4 lakh metric tonnes (MT), backed by an estimated investment of ₹7,500–8,000 crore. These facilities are designed to produce packaging materials suitable for direct food contact. They use recycled polyethylene terephthalate (r-PET) as the primary raw material. Many of these plants employ cutting-edge technology and meet international safety standards, including those set by the European Food Safety Authority (EFSA) and the U.S. Food and Drug Administration (FDA). Despite these efforts, only a few units have received FSSAI approval. Fifteen fully commissioned plants remain idle, awaiting regulatory clearance to begin commercial production.
Missed Deadlines, Mounting Concerns
In 2022, the Ministry of Environment, Forest and Climate Change (MoEFCC) issued a mandate requiring 30% recycled plastic content in PET bottles used by beverage companies, effective April 1, 2025. To support this initiative, FSSAI issued guidelines for the use of post-consumer r-PET in food-contact applications, resulting in five initial licenses and successful field validation.
However, FSSAI failed to publish the revised recycling guidelines in time. These were expected by early 2025. However, they were only notified in the last week of May 2025, causing further delays in approvals. As of now, nine new applications submitted as early as December 2024 and January 2025 are still pending.
Idle Assets, Rising Debt
“Following regulatory guidance by MoEFCC and FSSAI in 2022, the industry rapidly ramped up capacity. Most new plants have been operational since January 2025,” said Shailendra Singh, Director General of APR Bharat. “But with regulatory approvals stuck, these facilities lie idle—pushing companies toward financial distress.”
About 50% of the investments in the sector are debt-funded. Singh warns that continued delays could lead to severe liquidity issues and many of these accounts turning into non-performing assets (NPAs).
Impact Beyond Industry: Jobs and Livelihoods at Stake
As per the press release, the r-PET sector is expected to create around 10,000 new jobs. It also plays a crucial role in supporting over 2 million rag pickers who collect post-consumer PET bottles for recycling. Any disruption in the r-PET value chain could have a cascading impact on both formal employment and informal livelihoods across India.
