India Doesn't Lack Scrap. It Leaves It Idle: Alang Runs at About a Fifth of Its Capacity, Vehicle Scrapping Centres at About a Tenth · Recykal Times
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India Doesn't Lack Scrap. It Leaves It Idle: Alang Runs at About a Fifth of Its Capacity, Vehicle Scrapping Centres at About a Tenth
As Europe moves to restrict scrap exports and India tightens its own import checks, the debate is all about imports. But India's two biggest sources of home-grown scrap, the Alang shipbreaking yards and the new vehicle scrapping centres, are running far below what they were built for. A Recykal Times analysis of official figures shows that the unused capacity at home is several times larger than the European supply now at risk.
Recykal Times Desk·2 Oct 2026·7 min read·7 sources
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A ship-breaking yard at Alang at dawn: a large vessel being dismantled on the tidal flats as cranes and excavators cut the steel hull.
The numbers behind the idle capacity
Indicator
Figure
Ferrous scrap used in India, FY 2024-25
About 42 million tonnes, of which about 9 million tonnes imported
Ferrous and stainless scrap imported from the EU, FY 2025-26
About 7.9 lakh tonnes (MRAI)
Alang ship recycling capacity
45 lakh LDT a year (target: 90 lakh)
Ships actually recycled at Alang, FY 2024-25
About 10.06 lakh LDT, from 113 ships
Registered vehicle scrapping centres
117 to 129 operating, each built for about 20,000 vehicles a year
Vehicles received under carmakers' scrapping targets, FY 2025-26
2.42 lakh, against 7.62 lakh required
End-of-life vehicles in India
Between about 1.2 crore and 2.3 crore, by different official estimates
Aluminium scrap needs met by imports
About 80% to 85% (MRAI)
(LDT, or light displacement tonnage, is the empty weight of a ship, most of it steel.)
The import debate misses half the picture
India's scrap conversation in September 2026 was about doors closing. The European Union published a draft list of countries that may keep receiving its metal scrap from 21 May 2027, and India is not yet on it. At home, India's own inspection rules for imported scrap were tightened.
Imports matter. In FY 2024-25, India used about 42 million tonnes of ferrous scrap and imported about 9 million tonnes of it, roughly a fifth. For aluminium, the dependence is far higher: the recyclers' association MRAI says imports meet about 80% to 85% of the country's aluminium scrap needs.
But there is a second question that gets far less attention. How much scrap is India failing to collect from its own ships and vehicles?
Alang: a world leader running at a fifth of its capacity
India recycled 35.4% of the world's ship recycling volume in 2025, according to the shipping ministry, and Alang in Gujarat handles 98% of India's share. The yard has capacity to recycle 45 lakh LDT of ships a year, and Gujarat plans to double that to 90 lakh LDT.
Yet in FY 2024-25, according to Gujarat government figures, Alang recycled about 10.06 lakh LDT from 113 ships, down from about 11.47 lakh LDT from 131 ships two years earlier.
Recykal Times analysis: That means Alang used only about 22% of its capacity, leaving about 35 lakh LDT unused in a year. The unused capacity alone is more than four times the 7.9 lakh tonnes of ferrous and stainless scrap India imported from the EU in FY 2025-26. (Our estimate: 10.06 lakh LDT out of 45 lakh LDT; 45 minus 10.06 is about 35 lakh LDT, which is about 4.4 times 7.9 lakh tonnes. Not every tonne of a ship is usable steel, so the real scrap figure is somewhat lower.)
Why the yard is quiet. Alang does not lack plots or workers. It lacks ships. When freight rates are high, shipowners keep older vessels working instead of selling them for scrap, and ship recycling reports through September 2026 said high tanker rates were doing exactly that. The government has tried to tip the balance: under a credit note scheme, owners who recycle a ship in India receive a credit worth 40% of its scrap value.
A door that may open. The European Commission has proposed adding two Alang yards to its approved list of ship recycling facilities. If member states agree, ships flying EU flags could be legally recycled in India for the first time. The Commission said a decision would follow discussions with member states in autumn 2026. No date has been confirmed.
Vehicle scrapping centres: built, but mostly empty
India's vehicle scrapping policy has created a network of registered vehicle scrapping facilities (RVSFs). A report prepared for NITI Aayog counted 117 operating centres, each designed to handle about 20,000 vehicles a year and costing about ₹14 crore to set up, with many running below 20% of capacity. The road transport ministry counted 129 operating centres as of 30 January 2026, which had scrapped 4,30,306 vehicles in total since the policy began.
The demand side is weak too. Under the end-of-life vehicle rules, carmakers had to ensure that 7.62 lakh old vehicles were scrapped in FY 2025-26 to meet their steel recycling targets. Only 2.42 lakh vehicles reached scrapping centres, a shortfall of about 70%.
Recykal Times analysis: 117 centres built for about 20,000 vehicles each add up to about 23 lakh vehicles a year. Against that, the 2.42 lakh vehicles received in FY 2025-26 used only about a tenth of the network's design capacity. (Our estimate: 117 × 20,000 = 23.4 lakh; 2.42 lakh is about 10% of that.)
The vehicles exist. NITI Aayog estimates India had about 2.3 crore end-of-life vehicles in 2025, rising to about 5 crore by 2030. A separate NITI presentation, reported in June 2026, used a lower figure of about 1.2 crore.
Recykal Times analysis: Even on the lower estimate, the 4.3 lakh vehicles formally scrapped so far are only about 4% of India's end-of-life fleet. On the higher estimate, it is about 2%. The rest are still on the road, parked, or broken up by informal dismantlers, whose steel does reach furnaces but without the paperwork that carmakers now need. (Our estimate: 4,30,306 as a share of 1.2 crore and 2.3 crore.)
Copper: the stock is large, the flow is still small
Copper tells a slightly different story. According to an industry stock-flow model cited in public analysis, India had about 15 million tonnes of copper in use as of FY 2020-21, in wires, buildings, machines and vehicles. But much of it stays in service for decades. Only about 3.8 lakh tonnes of old copper became available for recycling in FY 2020-21. India imported about 3.1 lakh tonnes of copper scrap in 2023, about the same amount.
Recykal Times analysis: For copper, the idle supply is not sitting in yards waiting to be processed. It will arrive over the next two decades as wiring, motors and vehicles reach the end of their lives. Collection systems built now decide whether that copper reaches Indian recyclers or leaves the formal system. With the EU supplying about 22% of India's copper scrap imports, according to MRAI, that matters more from 2027.
What the numbers add up to
Put together, the official figures point to one conclusion. India's ferrous scrap gap is real: in April to October 2025, the country needed about 23 million tonnes of ferrous scrap and found about 18 million tonnes at home. But the unused capacity at Alang and in the vehicle scrapping network is far larger than the European volume that may be lost in 2027.
Recykal Times analysis: India's problem is not a shortage of scrap facilities. It is a shortage of material reaching them. Filling existing plants, through ship supply, stricter end-of-life rules and better collection of old vehicles, may be the fastest way to cushion any European cut. Imports will still be needed, especially for aluminium and zinc, where the EU supplied about 20% and 40% of India's imports respectively, according to MRAI.
What this means for you
Steel mills and furnace owners: Ship and vehicle scrap is the supply no foreign rule can switch off. Long-term contracts with scrapping centres and Alang yards are worth exploring before 2027.
Scrapping centre operators: With most capacity idle, the bottleneck is getting old vehicles in. Tie-ups with fleet owners, insurers, transport departments and local dealers can bring in volume.
Kabadiwalas and local dismantlers: Carmakers now need certificates from registered centres to meet their targets. Working with a registered centre, instead of competing with it, can turn old vehicles into steadier business with proper paperwork.
Investors and policymakers: The opportunity is not more plants. It is the collection, transport and paperwork that feed the plants that already exist.
What to watch
16 October 2026: Last day for comments on the EU draft list of countries cleared to receive its scrap.
Autumn 2026: EU decision on adding two Alang yards to its approved list.
Tanker freight rates: a sustained fall would send more old ships to Alang.
FY 2025-26 Alang figures: whether throughput recovered from FY 2024-25.
End-of-life vehicle rules: any change to carmakers' scrapping targets after the FY 2025-26 shortfall.
The bottom line
India is right to fight for its place on Europe's scrap list. But the bigger, cheaper supply may already be inside the country. Alang is running at about a fifth of its capacity and the vehicle scrapping network at about a tenth. Every tonne that reaches those plants is a tonne India does not have to import.
Discussion
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