CHENNAI: Tamil Nadu has rolled out a Circular Economy Investment Policy 2026, to promote recycling-based industries, attract private investment, and create green jobs across key industrial sectors.
The policy, launched by Chief Minister MK Stalin last week, focuses on waste-heavy sectors such as textile, automobile and electronics.
The policy offers a 10% capital subsidy on eligible fixed assets, capped at Rs 3 crore, to eligible entities, alongside employment incentives as the reimbursement of employer’s EPF contributions for up to 50 new workers domiciled in Tamil Nadu, and skilling support of Rs 10,000 per employee for training.
Tech-driven waste management platforms are eligible for a payroll subsidy of up to Rs 20,000 per employee per month over three years, linked to turnover and job creation.
Meanwhile, MSMEs can access capital subsidies, incentives for clean technologies, full reimbursement for circularity certifications, patent-filing support, innovation vouchers, and marketing assistance under existing MSME and FameTN policies.
To anchor circular manufacturing, SIPCOT will develop low-carbon green industrial parks in partnership with national and international players, aimed at reducing direct and indirect emissions. The parks will integrate shared low-carbon infrastructure, including renewable power sourcing, common utilities for waste and water management, and facilities for material recovery and recycling.
Under the policy, textile manufacturers investing in processes that convert pre- and post-consumer waste into yarn, fabric or finished goods will be eligible for state support.
The policy also targets the automobile sector, with a focus on scrapping end-of-life vehicles and recycling of advanced-chemistry cell (ACC) batteries. India’s lithium-based battery storage potential is estimated at 600 GWh, of which around 128 GWh is expected to enter the recycling market by 2030, creating a pipeline for secondary materials and energy storage inputs.
Tamil Nadu is the country’s second-largest producer of electronics and optical products and generates an estimated 31,000 tonnes of e-waste annually.