NITI Aayog has proposed a series of reforms aimed at strengthening India’s end-of-life tire management system, including national quality standards for tire pyrolysis oil (TPO) and recovered carbon black (rCB), tighter oversight of pyrolysis facilities, revised tax policies, and improved traceability measures.

The proposals were discussed during the Paryavaran NITI Manthan conference held in New Delhi on May 4, 2026. Organized by NITI Aayog in partnership with the Material Recycling Association of India, the event brought together policymakers, regulators, and industry stakeholders to examine challenges facing India’s growing tire recycling sector.

According to figures presented at the conference, India recycled approximately 3 million metric tonnes of tires during the 2024-2025 fiscal year, including 1.6 million metric tonnes generated domestically and 1.4 million metric tonnes imported from overseas markets.

Despite the scale of recycling activity, industry participants said weak traceability systems, inconsistent product standards, and limited demand for recycled materials continue to prevent the sector from generating higher-value outputs.

Standards proposed for TPO and recovered carbon black

A major focus of the discussions was the lack of national standards for products generated through tire pyrolysis, particularly tire pyrolysis oil and recovered carbon black (rCB).

Stakeholders said the absence of recognized quality benchmarks has limited confidence among industrial buyers and slowed wider adoption of recycled materials.

NITI Aayog proposed introducing standardized specifications for TPO and rCB to improve product consistency, reliability, and market acceptance across industrial sectors.

The recommendations also included procurement guidelines and incentives designed to encourage industries to use recycled materials in higher-value applications rather than lower-value recovery pathways.

Recovered materials generated through tire recycling and pyrolysis can include:

  • Recovered carbon black (rCB)
  • Tire pyrolysis oil (TPO)
  • Recovered steel
  • Pyrolysis char
  • Syngas and energy recovery streams

Improving traceability and formalization

NITI Aayog also highlighted traceability gaps within India’s recycling system.

Currently, waste tires and crumb rubber share the same HSN classification, making it difficult for regulators to monitor material flows and identify whether end-of-life tires are entering authorized recycling systems or informal processing channels.

The think tank proposed introducing separate six-digit HSN codes for waste tires and crumb rubber to improve transparency and strengthen oversight.

Formalization of the informal recycling sector was another major recommendation. Proposed measures include integrating smaller recyclers into formal business registration systems, offering financial support, and considering limited waivers for past environmental liabilities to support compliance transitions.

GST cuts and tax alignment under consideration

High Goods and Services Tax (GST) rates on recycled tire products were identified as another barrier affecting market development.

Industry stakeholders proposed reducing GST on recycled tire materials from 18% to 5% in order to improve competitiveness and encourage movement toward the formal recycling economy.

The conference also addressed differences in tax treatment between tire pyrolysis oil and conventional petroleum products. Since TPO falls under GST while petroleum products largely do not, participants argued that the current framework creates a pricing imbalance.

Suggestions included aligning tax treatment or offering GST credits to refineries and industrial users incorporating TPO into their operations.

Tighter regulation for pyrolysis facilities

Because pyrolysis accounts for the majority of India’s tire recycling activity, estimated at approximately 2.68 million metric tonnes during 2024-2025, improving environmental oversight of the sector was identified as a priority.

NITI Aayog proposed mandatory continuous emissions monitoring systems for pyrolysis facilities as part of efforts to strengthen environmental compliance and operational transparency.

The government is also considering allowing imports of waste tires for pyrolysis processing, provided facilities have the capability to further upgrade carbon char into recovered carbon black.

In addition, proposals would allow TPO generated from imported tires to be used by refineries and approved industrial sectors.

Growing focus on circular economy goals

The recommendations closely align with concerns previously raised by the Centre for Science and Environment (CSE), which has highlighted challenges related to informal recycling, weak enforcement, and gaps in traceability within India’s waste tire sector.

India currently ranks among the world’s largest tire markets, producing approximately 4.2 million metric tonnes of tires annually. However, recycling infrastructure and end-of-life management systems continue to face pressure as tire volumes increase.

The proposals discussed during the conference reflect broader efforts to strengthen India’s circular economy framework, improve material recovery efficiency, and increase the role of sustainability within the country’s growing tire recycling industry.

Implementation of the proposed reforms will likely determine how quickly the sector can transition from largely volume-driven recycling toward higher-value material recovery and more advanced circular manufacturing systems.

To learn more, read the original article by Down to Earth magazine.