Indias Battery Makers Say New Recycling Rules May Pull The Plug On Their Business

2 billion units are sold in India every year, but the factories behind them are now at risk of going dark.Eveready, Nippo, Panasonic and Duracell-companies that powered India for more than five decades-warned that a government recycling mandate could push the dry cell battery industry to the brink. They say the new rules have rendered their business model financially unviable, leaving manufacturers staring at potential shutdowns. 131976779Panasonic Energy, which has been manufacturing dry cell batteries in India since 1972, has flagged serious concerns. In its submission to the government, the company noted that current recycling technologies for zinc-carbon batteries are still evolving and do not yield metal purity high enough for reuse in new batteries. The rules mandate reuse targets and pricing benchmarks without accounting for these technical limitations.The financial math is equally devastating for the company. If the entire 50% collection mandate is pushed onto Panasonic, its extended producer responsibility (EPR) certificate purchase costs will skyrocket to ₹50 crore. For context, the company's total projected profit for FY26 is just ₹6 crore. Highlighting this unsustainable gap, Akio Fujita, chairman at Panasonic Energy India, told ET, No business can survive compliance costs that are nearly eight times its entire profitability. He added: If these provisions are not revised, a manufacturing unit that has successfully operated in India since 1972 will be forced to shut down entirely on account of these unviable complexities. Panasonic is not alone in facing this existential math; the entire industry is echoing the same alarm over the sheer pace of the rollout. Globally, such waste policies are implemented over 6-7 years in a phased manner, said Pavan Kumar, chief executive officer at Indo National, the maker of Nippo battery brand. In India, a 50% collection target has been mandated from year one, which is impossible given the absence of a collection ecosystem. At the core of the industry's concern is the Battery Waste Management Rules, 2022, which came into force from 2025. Companies argue that framework, largely designed around lithium-ion batteries, does not account for realities of zinc-carbon dry cell batteries, which make up 85% of country's consumption.Unlike lithium batteries, dry cells have low residual value and are difficult to collect. Their small size means they often get mixed with household waste, while the informal recycling sector has little incentive to pick them up. Even companies that have begun pilot collection programmes say recovery rates remain low, with the industry currently able to collect only around 20% of the total volumes.To enforce accountability, the rules introduce an EPR credit system. Manufacturers are legally blocked from recycling the batteries themselves but instead, they must purchase digital EPR certificates directly from authorised recyclers. Traded on a centralised portal, these credits have typically mandated a price range between ₹166 and ₹555 per kilogram.This creates a massive financial bottleneck. While virgin zinc costs around ₹300 per kg, the proposed regulatory penalty ranges from ₹720 to ₹2,400 per kg. Industry estimates suggest this cost structure is pegged to lithium battery economics, making compliance costs nearly four times the wider industry's profit.