South Korean consumer electronics majors LG and Samsung have sued the Indian government over its electronic-waste management policy that they claim increases their recycling costs, joining the likes of Daikin, Havells and Voltas.
In September last year, the Centre set a floor price that electronics makers must pay to recyclers. The rules mandate a minimum payment of Rs 22 per kg for consumer electronics and Rs 34 per kg for smartphones.
Though the companies oppose a floor price, the Centre has said it is important to ensure more formal players enter the sector and to boost investments in e-waste recycling.
India is the third-biggest e-waste generator, after China and the US. However, according to the Centre, only 43% of the country’s e-waste last year was recycled and at least 80% of the sector comprises informal scrap dealers.
According to experts, the government move is likely to hit the makers of air conditioners the most as their cost per unit increases far more than the companies making smaller gadgets like smartphones.
In its court filing, LG said that the pricing rules do not take into consideration that merely by “fleecing companies and taxing them in the name of the ‘polluter pays principle’, the (government) objectives sought to be achieved cannot be achieved.”
“(If) the authorities have not been able to regulate the informal sector, then it is an enforcement failure,” the 550-page court filing from April 16 showed.
Samsung, in its 345-page filing, said that “the regulation of prices does not inherently serve the purposes of environmental protection,” and this was “expected to cause substantial financial impact.”
LG wrote to the government in August, saying the proposed rates were “very high and should be reduced” and the government should let market forces determine the prices.
Samsung’s earlier filings suggest that the new pricing was “5-15 times the price currently paid.”
According to research firm Redseer, India’s recycling rates are still lower than in the US, where they are up to five times higher. In China too, these rates are at least 1.5 times higher.
Reports suggest that Blue Star has also filed a lawsuit challenging the rules. Hitachi also filed a complaint but has now moved court to withdraw it.
