India–Gulf Countries: Circular Economy Partnerships

Policy Update
Devshi Satish Mishra

What is meant by “Circular Economy”?

The circular economy is a system that could be understood as a move towards sustainable development. It is a system wherein materials are fully utilised, which allows nature to be regenerated. In a circular economy, products and materials are kept in circulation through processes like maintenance, reuse, refurbishment, remanufacture, recycling, and composting. In simpler terms, the circular economy is a system that focuses on decoupling economic activity from the consumption of finite resources. In other words, it allows for continuous usage of the finite resources, so that no waste is produced. 

The circular economy is based on three principles, which are determined by the structure of the system.

• Eliminate waste and pollution
• Circulate products and materials (at their highest value)
• Regenerate nature

In our current economy, we extract materials from the Earth, manufacture them into products, and ultimately discard them as waste – a linear process. In a circular economy, by contrast, waste is prevented from being produced in the first place – the process is circular. This process is shown visually in the image attached below.

Source: Ellen Macarthur Foundation

Why is the system of Circular Economy needed?

A circular approach is not just desirable but essential for sustainable development. The urgency of transitioning into a circular economy stems from its ability to simultaneously address climate change, resource scarcity, waste mismanagement, and socio-economic inequities – issues that are relevant in national as well as global contexts.

There have been several ambitious global climate pledges; however, existing Nationally Determined Contributions (NDCs) remain insufficient to achieve the Paris Agreement targets. By 2030, a 25 Gt CO₂ gap is projected between expected emissions and the reductions needed to limit warming to 1.5°C. With this fact laid out, it is not difficult to understand that the problem of climate change cannot be solved solely by an energy transition.

Approximately 45% of global greenhouse gas (GHG) emissions stem from the production and consumption of products, materials, and food, not just from energy generation. This implies that, even if we opt for a complete decarbonisation of electricity, it will not be adequate to meet climate goals, unless material systems are also transformed. Moreover, global material extraction has tripled since 1970 and is projected to double again by 2050, driving climate change, biodiversity loss, and pollution. In the Global South, rapid urbanisation and weak waste infrastructure exacerbate these challenges, leading to overburdened landfills, informal waste economies, and social inequities. Circular economy strategies, therefore, offer a critical pathway to close this gap by:

• Reducing emissions from material production and waste through reuse, recycling, and efficient product design.
• Extending product lifespans to avoid emissions linked with new production.
• Supporting clean energy transitions by easing pressure on critical minerals, reducing waste from decommissioned energy infrastructure, and ensuring the long-term sustainability of renewable technologies.
• Enhancing climate adaptation by improving soil health, slowing ecosystem degradation, and building resilience against floods and other climate risks.

• Avoiding and reducing the extraction of raw and fossil-based materials.
• Reconfiguring waste management systems from “take–make–dispose” to regenerative loops that keep resources in circulation.
• Preventing CE initiatives from inadvertently driving demand for waste or fossil fuel energy by ensuring whole-system and long-term perspectives.

Considering these perspectives, it is clear that, by reducing the need to extract resources over and over again to meet the demand for goods, reusing also reduces the costs associated with extraction. With reduced time and costs associated with extraction, the circular economy not only helps achieve the goal of sustainable development but also reduces production and extraction costs.

However, to ensure that the Circular Economy approach truly fulfills its purpose, it needs to make sure that this system serves two additional purposes: 

• Promoting Social Equity and Inclusive Development
• Systems Change Beyond Technology

While the Circular Economy has been globally acknowledged as a desirable system, the dominant approach has been to rely on techno-centric, top-down models that risk the exclusion of vulnerable communities. Since the vulnerable countries and/or vulnerable groups bear the brunt of climate change, any circular economy system must ensure their systematic inclusion. In the Global South, where informal waste pickers and marginalised groups play vital roles in recycling and recovery, the circular economy must also deliver social justice outcomes. Additionally, a circular economy is not only about better waste management technologies, but about reshaping consumption and production systems. To fulfill these two additional purposes, a circular economy must:

• Empower marginalised communities through participatory decision-making, capacity building, and fair livelihood opportunities.
• Recognise and build upon existing informal practices of repair, reuse, and recycling that already contribute to circularity.
• Ensure that transitions to CE avoid reinforcing inequalities or disrupting livelihoods, instead promoting local economic development and decent work.

• Shifting cultural and social behaviours around consumption.
• Integrating ecological regeneration and nature-based solutions to restore degraded systems.
• Building collective action among governments, businesses, communities, and civil society to sustain long-term transitions.

The need for such a system is more evident today, when at international conventions on climate change, developed countries expect developing countries like India to cut down on their emissions and carbon footprint. Since there is an inherent tradeoff between economic development and lower emissions, the circular economy could target both, without having to make any tradeoffs. 

Why is the India-Gulf countries (GCC) partnership needed?

Gulf countries typically refer to the six Arab nations that are members of the Gulf Cooperation Council (GCC): Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. The partnership of these Arab nations with India could bear fruit benefitting both parties in the context of the Circular Economy. To understand why, we first need to look at some data related to the waste generation of both nations, as presented in the table below

Table 1. Data on India and Gulf countries (for the year 2024)

Source: World Bank, 2024
Note: ‘na’ stands for data not available

The data reveals information that, if carefully analyzed, reveals why there is a unique advantage possessed by both countries, owing to the rarity of the nature of their relationship. The following reasons put together the top-most reasons why the India-Gulf countries’ partnership in the context of Circular Economy (CE) would be beneficial, primarily drawing from the data presented in the table:

Economic Asymmetry and Complementary Strengths

The average per capita GDP of Gulf nations is about $58,000 as compared $6,496 for India, as demonstrated in Table 1. This asymmetric economic power highlights the financial resources that the Gulf possesses to invest in such massive-scale circular economy infrastructure. At the same time, India, with its 1.35 billion people, represents both a massive consumption base and a vast pool of low-cost labor that can support recycling, reuse, and waste-to-resource innovations. Together, these complementary strengths can create a powerful regional partnership.

Energy-Resource Linkages

The Gulf states possess large oil and gas reserves, but they remain resource-scarce, relying heavily on imports of raw materials. India, on the other hand, is resource-diverse, with agriculture, biomass, and secondary material potential, but is energy-import dependent. Circular economy collaboration can reduce these mutual dependencies by creating resource-efficient and low-carbon supply chains that link energy security with material efficiency. Both nations can overcome their respective limitations by co-developing waste-to-energy, desalination powered by renewables, and recycling technologies. This joint innovation ecosystem would be difficult for either to achieve alone at scale, owing to the limitations they possess.

Demographics and Labor Mobility

Gulf economies depend heavily on migrant labor from South Asia, particularly India. Integrating Indian workers into large-scale circular economy projects in the Gulf could make such initiatives more cost-effective, while also creating employment opportunities for India’s vast youth population. In turn, the Gulf’s investment in CE technologies could be adapted and deployed in Indian cities and industries, benefiting both nations mutually.

Food Security and Waste Management

Food systems are another area of complementarity. Gulf countries import nearly 80-90% of their food, yet face alarmingly high food waste levels of around 46% of their total waste stream. Meanwhile, India is a major agricultural producer but struggles to manage 500 million tons of agricultural waste annually. By working together, agricultural residues in India could be processed into bio-fertilizers, bio-energy, and animal feed to support Gulf food systems, reducing both methane emissions and import dependence.

Technology and Innovation Ecosystems

While Gulf countries are investing heavily in waste-to-energy plants, smart waste monitoring, and advanced treatment systems, India has developed low-cost, grassroots recycling innovations through its informal sector and small enterprises. Combining Gulf capital and technology with Indian innovation and scalability could help establish a circular tech ecosystem that is both cutting-edge and inclusive.

Geopolitical and Trade Potential

The India-Gulf partnership has a strong geopolitical foundation. Both regions are currently linked through ongoing India-GCC Free Trade Agreement negotiations. Embedding circular economy targets within these trade frameworks could create the world’s first circular economy-based trade corridor, positioning India and the Gulf as pioneers in climate-aligned global commerce. 

To summarise, the partnership is essential because: 

• Shorter Geographic proximity & trade routes: Shorter transport distances across the Arabian Sea mean lower costs and quicker supply chains between India and Gulf Nations as compared to Europe, Africa, or the Americas.
• Energy-material complementarity: The Gulf has abundant energy (oil, gas, solar, hydrogen potential) but is resource-scarce, while India is resource-diverse (biomass, secondary materials, labor for recycling) but dependent on energy-imports. This match is rare, allowing for a natural partnership to develop. 
• Market size: India’s massive consumer base would be able to provide demand for Gulf clean energy and recycled products, while the Gulf’s high per-capita consumption provides a testing ground for India’s circular solutions.
• Existing ties: India is already the Gulf’s largest trading partner and labor supplier, so building circular economy links strengthens an already deep economic relationship.

References

Building Circularity. (n.d.). Building circularity: Measuring circularity in the built environment. Retrieved August 26, 2025, from https://buildingcircularity.org/

Ellen MacArthur Foundation. (n.d.-a). Circular economy overview. Retrieved August 26, 2025, from https://www.ellenmacarthurfoundation.org/topics/circular-economy-introduction/overview

Ellen MacArthur Foundation. (n.d.-b). Circular economy diagram. Retrieved August 26, 2025, from https://www.ellenmacarthurfoundation.org/circular-economy-diagram

Ellen MacArthur Foundation. (n.d.-c). The circular economy in detail: Deep dive. Retrieved August 26, 2025, from https://www.ellenmacarthurfoundation.org/the-circular-economy-in-detail-deep-dive

Hadfield, P., Ningrum, D., Aditya, B., Hardesty, B. D., Holden, J., Maheshwari, T., Marthanty, D. R., Ombasta, O., Prescott, M., Priadi, C., Purnomo, C. E., Ramirez-Lovering, D., Skidmore, M., Suwarso, R., Tanumihardja, D., Taufik, F. D., Wong, T., & Raven, R. (2025). Transformative principles for circular economy transitions in the Global South. npj Urban Sustainability, 5(34). https://doi.org/10.1038/s42949-025-00225-9

International Labour Organization. (2019). Decent work in the circular economy: An introduction to policy, practices and initiatives. ILO. 

Kumar, R., & Pannu, R. S. (2024). Waste to wealth: Modern agricultural waste management strategies. Springer. 

NITI Aayog. (2021). Waste management and circular economy in India. Government of India. 

United Nations Industrial Development Organization (UNIDO). (2023). Circular economy and climate change. UNIDO. 

World Bank. (2023). Circular economy and private sector opportunities. World Bank Data Catalog. https://datacatalog.worldbank.org/search/dataset/0039597

Ministry of Commerce & Industry. (n.d.). India–Gulf Cooperation Council Free Trade Agreement (FTA) negotiations. Government of India. Retrieved August 26, 2025, from https://www.commerce.gov.in/international-trade/trade-agreements/indias-current-engagements-in-rtas/india-gulf-cooperation-council-gcc-free-trade-agreement-fta-negotations/

About the Contributor
Devshi Satish Mishra is a Research Intern at IMPRI and a student at the University of Delhi pursuing Economics Honours. 

Acknowledgement

The author sincerely thanks Ms. Aasthaba Jadeja and other IMPRI fellows for their valuable contribution.

Disclaimer: 

All views expressed in the article belong solely to the author and not necessarily to the organization.

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