Classify Recycling Industry as “Essential Services” amid coronavirus COVID-19 lockdown challenges: MRAI urges govt

New Delhi: As the coronavirus COVID-19 pandemic has caused a lot of disruption in all economic sectors, the apex association of India’s recycling industry and related processing units have urged the government to put the sector under “Essential Services”. It also demanded that the sector should be allowed to work in 12 hours shifts so that it would be able to provide job security to its employees and resume economy activities in a phased manner, according to Material Recycling Association of India (MRAI). 

The MRAI, which is the apex National Association of India, represents the interest of recycling industry with over 1200 members, including most Regional Trade/ Product Associations. “Our collective strength comprises of over 20,000 Small, Medium and Large enterprises, directly and indirectly employing more than 25 lakh people,” it said.

The Association said, “Out of total crude steel production in India, more than 55% is through Recycling Route and in case of non-ferrous metals, the rate for Aluminium is 30%, Copper is 20%, Lead is 85% and Zinc is 10%. Products made out of recycling activities are used in very critical industries like, Pharma, Defence, Auto Components, LPG valves etc.” 

It further statd that many governments across the world have classified the Recycling Industry as “Essential Services”, adding “In India, such a classification will help boost local production under ‘Make in India’ besides helping ‘Swatch Bharat’ programme of government of India & will assist in Exports of finished products as well.”  

Notably, recycling industry is one of the top 5 biggest job creating Industries especially for low strata population and women in India. 

Citing that the industry is facing the challenges, recycling industry has requested the government with following challenges to put it under “Essential Services”.

1. Since majority of scrap, which is used by Indian manufacturers as a vital raw material, is imported, during the period of lockdown, we estimate that more than 1.5 lakh containers containing scrap will be stuck at various ports across India. Ministry of Shipping has issued guidelines instructing all the ports, shipping lines and CFS not to charge any rent, detention/ demurrage on all imported containers from 22nd March, 2020 till 14th April, 2020 (which was the earlier lockdown end date). However many shipping lines (NVOCC)/ CFSs are not following these guidelines and continue charging rent, detention/ demurrage. 

2. Majority of containers which are lying at the port are containing Ferrous Scrap (which is a low value commodity) and if rent, detention/demurrage is charged on these container the value of rent, detention/ demurrage will be more than the value of material it contains. As per Industry Estimate more than Rs 5000 crores will have to be paid to the shipping lines as detention/demurrage charges in foreign exchange as a result of non-clearance during this lockdown period. 

3. We request government of India to issue a Notification/Circular at the earliest instructing all the Shipping Lines, Ports and CFS to waive off rent, detention/demurrage charges for the entire lockdown period (now currently extended to April 30th) plus additional 21 free days to be provided (beside agreed contractual free days between shipper and shipping line) and same too continue for the next two months after the lock down is lifted to clear the back log of the containers piled up at the port.

“The Association further stated that “banks have been directed by RBI to give 10% additional working capital. However, to clear the back log of the imported containers, the Recycling Industry needs special funding from banks as currently the Industry is faced with a cash flow crunch. With the help of these special funds provided by the Banks, Indian Buyers and Manufacturers can restart their payment obligations until their units restart and manufacturing activity gradually resumes.”


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