Iron and Steel Scrap Recycling in India: Market Overview 2026

Updated: May 07, 2026 · 17 min read

India produced over 144 million tonnes of crude steel in FY 2024-25, briefly overtaking Japan to become the world’s second-largest producer — and scrap was not a sideshow in that story. The Ministry of Steel, Government of India now counts domestic iron scrap recycling as a strategic input, not a residual trade. With the Union Budget 2025-26 extending the Basic Customs Duty (BCD) exemption on certain steel scrap imports through to March 2026, and with Electric Arc Furnace (EAF) and Induction Furnace (IF) capacity expanding aggressively across Gujarat, Maharashtra, and Telangana, the commercial and compliance stakes around iron scrap recycling in India have never been higher for industrial sellers, fabricators, and procurement teams alike.

India’s Iron Scrap Market in 2026: Scale, Supply, and Structural Shift

India’s total steel scrap consumption — domestic generation plus net imports — is on course to touch approximately 45 million tonnes in FY 2026, according to estimates aligned with the Ministry of Steel’s own capacity expansion projections. That figure represents a near doubling from roughly 25 million tonnes a decade ago, driven almost entirely by the explosive growth of EAF and IF-based steelmaking, which collectively account for over 57% of India’s total crude steel output.

Domestic scrap generation remains constrained by the relative youth of India’s industrial base — older, end-of-life infrastructure that feeds scrap markets in Europe or the United States simply does not exist at the same density here yet. The NITI Aayog’s circular economy framework acknowledges this “scrap deficit” and has repeatedly flagged it as both a policy challenge and a commercial opportunity. The gap between domestic generation and demand is currently bridged by imports, primarily from the United States, the United Kingdom, the UAE, and Japan — a dependence that creates its own regulatory exposure (discussed in Section 4).

Structurally, the market is shifting. Vehicle scrapping policy under the Voluntary Vehicle Fleet Modernisation Programme (V-VMP) — which gained formal regulatory teeth through Motor Vehicles (Amendment) Act, 2019 and subsequent CMVR notifications — is beginning to add a meaningful new stream of automotive steel scrap into the market. The Ministry of Road Transport and Highways has registered over 60 Registered Vehicle Scrapping Facilities (RVSFs) nationally as of early 2026, with more licensed under state transport departments in Maharashtra and Tamil Nadu. As these facilities scale up, the quality and consistency of domestic iron scrap supply is expected to improve significantly.

MS Scrap Rate Tracker: What ₹32–₹38/kg Actually Tells You

Mild Steel (MS) scrap — the backbone category in the steel scrap market — traded in the range of ₹32–₹38 per kg across Mumbai, Pune, and Navi Mumbai yards in Q1 2026. Ahmedabad and Surat yards in Gujarat tracked slightly lower at ₹30–₹35/kg, reflecting the lower logistics cost of port-proximity and proximity to major IF clusters. Tamil Nadu (Chennai and Hosur) quoted ₹33–₹37/kg, with marginal premiums for clean, sorted HMS-1 (Heavy Melting Scrap Grade 1).

Grade Matters More Than Most Sellers Realise

The ₹6/kg spread within MS scrap is not noise — it is the market pricing in grade, contamination, and sorting effort. HMS-1 (unambiguously clean heavy melting scrap, free of tin, galvanising, or non-ferrous contamination) commands the top of the range. HMS-2 (mixed, lighter gauge) sits ₹3–₹5/kg below. Shredded scrap — processed by industrial shredders and magnetically separated — commands a premium over HMS in most IF-fed markets because it improves furnace yield and reduces melt time. Fabrication drops (turnings, punchings, and offcuts from stamping and machining operations) are quoted at ₹28–₹32/kg in most yards due to their variable density and oil contamination risk.

Scrap Grade / Type	Typical Rate Q1 2026 (₹/kg)	Key Markets	Preferred Buyer Type
HMS-1 (Heavy Melting Scrap Grade 1)	₹36–₹38	Mumbai, Chennai, Hyderabad	EAF mills, large IFs
HMS-2 (Heavy Melting Scrap Grade 2)	₹32–₹35	Pune, Ahmedabad, Surat	Medium IF clusters
Shredded Scrap	₹37–₹40	Gujarat, Raipur, Mandi Gobindgarh	EAF, re-rollers
Fabrication Drops / Turnings	₹28–₹32	Across regions	Small IFs, foundries
Cast Iron Scrap	₹29–₹34	Coimbatore, Rajkot, Kolhapur	Grey iron foundries
Stainless Steel Scrap (304 grade)	₹90–₹105	Mumbai, Delhi-NCR, Bengaluru	SS melters, specialised traders

Rates are indexed loosely to the London Metal Exchange (LME) steel scrap futures and to Turkish import prices — the global benchmark for ferrous scrap — but the correlation is imperfect. Domestic demand from IF clusters in Mandi Gobindgarh (Punjab), Raipur (Chhattisgarh), and Surat (Gujarat) exerts significant independent price pressure, particularly when those clusters run at high utilisation. Sellers who treat the MS scrap rate as a single national number almost always leave money on the table.

The Scrap-to-EAF Pathway: How Iron Scrap Recycling Feeds Indian Steelmaking

The Electric Arc Furnace (EAF) route is where iron scrap recycling in India becomes industrial-scale circularity. An EAF melts steel scrap using high-current electric arcs, producing liquid steel without the need for iron ore, coking coal, or blast furnaces. In carbon accounting terms, the EAF route emits approximately 0.4–0.6 tonnes of CO₂ per tonne of crude steel, compared to 1.8–2.1 tonnes per tonne via the traditional blast furnace-basic oxygen furnace (BF-BOF) route — a reduction of roughly 70–75%.

India’s EAF capacity currently stands at approximately 35 million tonnes per annum (MTPA), with major operators including JSW Steel, Tata Steel (Kalinganagar EAF), Electrotherm, and JSPL. The Induction Furnace (IF) segment — smaller, more distributed, and heavily concentrated in Punjab, Gujarat, and Maharashtra — adds another 60+ MTPA of scrap-fed capacity. Together, these two routes consume the overwhelming majority of domestically traded iron and MS scrap.

Why Scrap Quality Translates Directly to Furnace Economics

A typical IF operator in Surat running a 15-tonne furnace processes 18–22 tonnes of raw scrap to account for yield loss, burning loss, and slag. Contaminated or mixed scrap (with rubber, paint, or non-ferrous elements) increases electricity consumption per tonne of output and reduces refractory lining life. This is why major iron scrap buyers in India increasingly specify grade and contamination limits in purchase contracts — and why sellers who can certify cleanliness and consistency command a consistent premium. The Bureau of Indian Standards (BIS) has published IS 10116 specifying classifications for ferrous scrap, though adherence in the unorganised segment remains partial.

Import vs Domestic Scrap: The Regulatory Fault Lines That Change Your Cost

India imports between 6 and 8 million tonnes of iron and steel scrap annually, with the volume fluctuating sharply based on BCD policy and global scrap price differentials. The Union Budget 2025-26 extended the BCD exemption on steel scrap imports — a measure first introduced in 2021 — through to 31 March 2026, keeping the effective import duty at nil for qualifying grades. This has been a deliberate policy lever by the Ministry of Steel to moderate domestic prices and support EAF and IF operators whose margin sensitivity to raw material cost is acute.

The Hazardous Waste Rules Trap That Catches Importers Off-Guard

Here is where many importers encounter serious regulatory friction. Steel scrap imports into India are classified as “other wastes” under the Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016 — specifically Schedule VI, which lists iron and steel scrap as a “restricted waste” for import purposes. Rule 13 of these Rules requires the importer to obtain a prior permit from the Central Pollution Control Board (CPCB) before any consignment can be cleared at port. Without this permit, the consignment sits under a Customs-hold at the port of entry (Nhava Sheva, Mundra, Chennai — depending on point of entry), and demurrage alone can cost ₹2–₹5 lakh per week on a standard 20,000-tonne bulk parcel.

Separately, the DGFT regulates the actual import licence under ITC-HS codes 7204 (ferrous waste and scrap). As of the current Policy, iron and steel scrap sits on the “restricted” list under the Foreign Trade Policy 2023 (FTP 2023), requiring a specific import licence from the DGFT before goods can be shipped from origin. Importers who assume a BCD exemption equates to a clean import pathway regularly discover — at the port — that the licensing and CPCB permit requirements are entirely separate compliance obligations. The MSTC Ltd (a Government of India enterprise) conducts regulated auctions of imported and domestically generated scrap; MSTC’s e-auction platform is a useful price-discovery tool for large buyers.

Who Buys Iron Scrap in India? A Map of Major Buyers and Yard Networks

The iron scrap buyer landscape in India is fragmented but regionally clustered. At the top end, integrated and semi-integrated steelmakers — JSW Steel, JSPL, Tata Steel, SAIL (in certain product lines), and Uttam Galva — purchase large volumes directly from industrial generators or through authorised scrap merchants. JSW’s Dolvi plant in Raigad, Maharashtra, for instance, is one of the largest single-site consumers of domestic scrap in the western region.

The mid-market is dominated by IF operators in hub cities: Mandi Gobindgarh (Punjab) is home to over 300 IF units; Raipur in Chhattisgarh hosts a dense cluster of EAF and IF re-rollers; Surat and Rajkot in Gujarat have large IF-based TMT bar and section producers; and Coimbatore in Tamil Nadu is a major foundry centre consuming cast iron scrap. Below this layer sits a network of registered scrap yards and secondary dealers who aggregate, sort, and supply the mid-market — the segment that The National Recycling Corporation operates within across Maharashtra and beyond.

For industrial generators — manufacturing plants, construction firms, demolition contractors, and fabricators — the practical route to fair pricing is through a registered scrap dealer or merchant who can offer volume-based pricing, scheduled logistics, and compliant documentation. Selling directly to a large IF operator is possible but typically requires minimum lot sizes of 20–50 tonnes and consistent grade certification, which smaller generators cannot always guarantee without an aggregator in the chain.

Environmental Case for Iron Scrap Recycling: Numbers the BRSR Desk Wants

The sustainability dividend from iron scrap recycling is quantifiable and increasingly mandatory to report. Recycling one tonne of steel scrap avoids approximately 1.4 tonnes of iron ore consumption, 0.74 tonnes of coal consumption, and 1.28 tonnes of limestone — inputs that would otherwise feed a blast furnace. On the emissions side, as noted earlier, the EAF scrap route cuts CO₂ intensity by approximately 70–75% per tonne of output against BF-BOF steel.

BRSR and ESG Reporting Obligations for Steel Industry Players

For listed companies in the steel and fabrication sectors, these figures are no longer voluntary disclosures. Under SEBI’s Business Responsibility and Sustainability Reporting (BRSR) framework — mandated for the top 1,000 listed companies by market capitalisation from FY 2022-23 — companies must report Scope 1 and Scope 2 emissions, raw material consumption including recycled inputs, and waste management data. SEBI’s circular dated 12 July 2023 introduced BRSR Core, a subset of 49 KPIs that are subject to limited third-party assurance from FY 2023-24 onward. Scrap consumption as a percentage of total metallic inputs is a directly relevant KPI under the “Resource Use” and “Greenhouse Gas Emissions” disclosure categories.

For companies not yet in the BRSR net, the NITI Aayog’s circular economy action plans — particularly the 2021 resource efficiency and circular economy framework — signal the direction of travel. Steel sector companies that can document scrap procurement volumes, recycling certificates, and avoided-emissions data today are building the audit trail that regulators and lenders will expect within two to three years. The Ministry of Environment, Forest and Climate Change (MoEFCC) has also signalled, through its draft Environment (Protection) Amendment rules, heightened scrutiny on industrial waste disposal practices — making compliant scrap channels more than a commercial preference.

The 7-Step Compliance Checklist for Industrial Iron Scrap Sellers

Selling iron scrap from an industrial facility is straightforward when documentation is in order. It becomes expensive — in delayed payments, GST complications, and potential CPCB scrutiny — when it is not. The following checklist applies to any manufacturing plant, construction firm, or fabricator with regular scrap generation in India.

1. Verify your scrap buyer’s registration status. Confirm the buyer holds a valid scrap dealer registration under the relevant SPCB (State Pollution Control Board) norms, and — for dealers handling any mixed or hazardous-adjacent waste streams — a CPCB-aligned authorisation. Ask to see the registration certificate before signing any purchase agreement.
2. Classify your scrap correctly under HSN codes. Iron and steel scrap falls under HSN Chapter 72 — specifically HSN 7204 for ferrous waste and scrap. Misclassification attracts GST complications and can trigger scrutiny at the e-way bill stage. The GST portal’s HSN search tool is the definitive reference. GST on scrap sale is currently 18% (for most categories under HSN 7204).
3. Generate an e-way bill for every consignment above ₹50,000. Iron scrap moving between districts or states requires a valid e-way bill under the CGST Rules, 2017. The bill must accurately reflect the consignment weight, vehicle number, and HSN code. Expired or incorrect e-way bills are among the most common triggers for commercial vehicle interception by state GST enforcement teams.
4. Issue or obtain a GST-compliant tax invoice. Every scrap sale must be accompanied by a GST tax invoice with the seller’s and buyer’s GSTIN, HSN code, quantity in metric tonnes, rate per kg, and applicable GST (CGST + SGST or IGST for interstate). Maintain copies for a minimum of 6 years under GST record-keeping rules.
5. Obtain a Certificate of Recycling or Disposal. For scrap arising from plant decommissioning, infrastructure demolition, or regulated assets, a formal certificate of recycling from your buyer establishes the audit trail for BRSR, internal ESG reporting, or any MoEFCC compliance query. Do not accept verbal confirmation — insist on a written, signed certificate on the buyer’s letterhead.
6. Check whether your scrap stream has any hazardous component. Scrap contaminated with lubricating oils, cutting fluids, paints, or solvents may cross into the regulatory scope of the Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016. If it does, the generator (your facility) bears responsibility for ensuring the buyer is authorised to handle hazardous waste under Rule 6 of those Rules — not just a general scrap dealer.
7. Maintain a scrap disposal register with quarterly reconciliation. Document each scrap disposal event: date, quantity (in metric tonnes), grade, buyer name and registration number, invoice number, and vehicle number. Reconcile this register with your internal inventory and production records every quarter. If your facility is subject to environmental compliance returns under the Environment (Protection) Act, 1986, this register forms part of your submission evidence.

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Frequently Asked Questions

What is the current MS scrap rate in India in 2026?

Mild Steel (MS) melting scrap traded between ₹32 and ₹38 per kg across major markets including Mumbai, Pune, Ahmedabad, and Chennai in Q1 2026. The rate varies by grade (HMS-1 commands the top of the range; HMS-2 and fabrication drops sit lower), by location, and by prevailing demand from Induction Furnace and EAF clusters. Rates are reviewed weekly by most registered scrap merchants and are loosely correlated to global LME steel scrap futures and Turkish import benchmark prices.

Do I need a licence to sell iron scrap from my factory?

The seller (generator) does not require a separate scrap-selling licence in most states, but you are responsible for ensuring your buyer holds valid registration under your state’s SPCB norms and under the Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016 if the scrap contains any hazardous residue. You must issue a GST-compliant tax invoice and generate an e-way bill for consignments above ₹50,000 in value. Keeping a disposal register is advisable for BRSR and internal ESG audit purposes.

What regulations govern iron scrap imports into India?

Iron and steel scrap imports are governed by two parallel frameworks: first, the Foreign Trade Policy 2023 (FTP 2023) administered by the DGFT, which classifies steel scrap (ITC-HS 7204) as a “restricted” item requiring an import licence; and second, the Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016, which require a prior CPCB permit under Rule 13 before port clearance. Missing either document results in Customs-hold at port, with demurrage costs that can reach ₹2–₹5 lakh per week on a standard bulk consignment. The Union Budget 2025-26 extended the BCD exemption on qualifying scrap grades through to 31 March 2026.

How does iron scrap recycling help with BRSR reporting?

Under SEBI’s BRSR Core framework (SEBI circular dated 12 July 2023), the top 1,000 listed companies by market capitalisation must report recycled raw material inputs, waste management data, and Scope 1 and Scope 2 GHG emissions from FY 2023-24 onward with limited third-party assurance. Scrap procurement volumes and recycling certificates from authorised dealers constitute direct evidence for the “Resource Use” and “GHG Emissions” KPI disclosures. Companies without this documentation face assurance gaps during external audits — a growing concern as sustainability-linked lending clauses tighten.

Which government body regulates the quality of steel scrap in India?

The Bureau of Indian Standards (BIS) publishes IS 10116, which specifies classifications and quality requirements for ferrous scrap used in steelmaking. BIS operates under the Bureau of Indian Standards Act, 2016. In practice, compliance with IS 10116 is more consistently enforced in large EAF mill purchase contracts than in the Induction Furnace segment. The Ministry of Steel has periodically flagged the need for stronger quality standards enforcement in the domestic scrap market as part of its National Steel Policy 2017 implementation reviews.

Work With The National Recycling Corporation

The National Recycling Corporation is a Mumbai-headquartered B2B scrap trading and recycling company with pan-India operations spanning Maharashtra, Gujarat, Delhi-NCR, Karnataka, and Tamil Nadu. We work directly with manufacturing plants, construction companies, infrastructure developers, and large fabricators who generate regular volumes of iron and steel scrap and need a reliable, compliant, and commercially fair disposal channel.

For companies subject to BRSR reporting or internal ESG commitments, our documentation — which includes GST-compliant tax invoices, e-way bills, and formal certificates of recycling — provides the audit trail that your sustainability and finance teams require. Our pricing is indexed to current Mumbai yard rates and reviewed weekly, so you are never working off a stale quote. For large consignments, we arrange scheduled pickups with appropriate vehicle capacity, minimising disruption to your plant operations.

Whether you are a plant manager clearing accumulated MS scrap, a demolition firm with structural steel, or a procurement head at a fabricator looking for a consistent iron scrap buyer relationship, contact us to discuss your requirements. You can also explore our full range of scrap categories we purchase or learn more about our ferrous and non-ferrous metal recycling service.

• Pan-India pickup scheduling with dedicated logistics support for bulk iron and MS scrap consignments
• GST-compliant tax invoicing with accurate HSN 7204 classification and e-way bill generation
• Formal certificates of recycling for BRSR Core, ESG audit, and internal compliance records
• Fair-market pricing reviewed weekly and indexed to current Maharashtra yard rates and LME benchmarks
• CPCB-authorised disposal partners in our network for scrap streams with any hazardous-adjacent content
• Dedicated account management for generators with regular, high-volume scrap production

Sources and References

• Ministry of Steel, Government of India — National Steel Policy 2017 and scrap import policy updates
• CPCB — Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016
• Ministry of Environment, Forest and Climate Change (MoEFCC) — Environment (Protection) Act and Amendment Rules
• NITI Aayog — Circular Economy and Resource Efficiency Framework 2021
• Bureau of Indian Standards (BIS) — IS 10116: Classification of Ferrous Scrap
• MSTC Ltd — Government of India scrap e-auction platform and price discovery
• London Metal Exchange (LME) — Steel Scrap Futures and global benchmark pricing
• Goods and Services Tax portal — HSN 7204 (Ferrous Waste and Scrap) classification and GST rate