By: Jossy Sebastian, Country General Manager, YCH India
India’s ambition to build a circular economy is steadily gaining momentum. With rising consumption, rapid urbanisation, and growing environmental pressures, the country is rethinking how products move not just forward from factory to consumer, but also backward after use. This is where reverse logistics is emerging as a critical enabler. Once viewed as a cost-heavy and operationally complex necessity, reverse logistics is now being recognised as a strategic lever that can unlock economic value, improve sustainability outcomes, and strengthen supply chain resilience.
At its core, reverse logistics covers the movement of goods from the point of consumption back to manufacturers, distributors, or designated facilities for reuse, repair, refurbishment, recycling, or responsible disposal. In a linear economy, products end their life at the consumer. In a circular economy, they re-enter the value chain. Reverse logistics provides the connective tissue that makes this loop viable at scale.
India’s case for reverse logistics is particularly compelling. According to government estimates, the country generates over 3.5 million tonnes of e waste annually, making it one of the largest e waste producers globally. Add to this the surge in packaging waste driven by ecommerce, growing returns in fashion and consumer electronics, and the increasing volume of end of life industrial equipment. Without efficient reverse flows, much of this material either leaks into informal channels or ends up in landfills, resulting in lost value and environmental harm.
The circular economy framework aims to change this outcome. By designing systems that recover products and materials, India can reduce its dependence on virgin resources, cut emissions, and create new economic opportunities. Reverse logistics sits at the centre of this transformation because it determines whether returned goods become assets or liabilities.
One of the most immediate value unlocks comes from improved asset recovery. In sectors such as electronics, automotive components, and industrial equipment, returned products often retain significant residual value. With structured collection, inspection, and refurbishment processes, companies can resell or redeploy these assets at lower cost. This is particularly relevant in India, where demand for affordable and reliable products remains high. Refurbished goods can bridge the gap between sustainability goals and price sensitive markets.
Ecommerce provides another powerful illustration. Returns are a defining feature of online retail, with return rates in certain categories reaching double digit percentages. When reverse logistics is inefficient, returns erode margins through delays, damage, and write offs. When managed well, they become an opportunity to recover inventory quickly, reduce waste, and improve customer trust. Faster return cycles also free up working capital, which is critical in a competitive retail environment.
Reverse logistics also plays a growing role in meeting regulatory and policy expectations. India has introduced extended producer responsibility norms across categories such as plastics, electronics, and batteries. These regulations require producers to take responsibility for post consumer waste. Compliance is not possible without robust reverse logistics networks that can track, collect, and process materials across geographies. Companies that invest early in these capabilities are better positioned to manage compliance costs and avoid operational disruptions.
Technology is reshaping how reverse logistics operates in practice. Digital tracking systems enable real time visibility into returned goods, improving forecasting and reducing losses. Data analytics helps identify patterns in returns, allowing businesses to address root causes such as product quality issues or packaging failures. Automation in sorting and handling improves speed and accuracy, especially in high volume environments. These tools are turning reverse logistics from a reactive function into a data driven strategic capability.
Warehousing infrastructure also needs to evolve to support circular flows. Traditional warehouses are designed for forward movement and high throughput. Reverse logistics requires flexible spaces that can handle inspection, grading, light repair, and consolidation. Purpose built facilities that integrate these functions reduce handling costs and shorten turnaround times. Green warehouses that optimise energy use and waste management further strengthen the sustainability impact of reverse operations.
Beyond economics and compliance, reverse logistics has a strong human and social dimension in India. The informal sector has long played a role in waste collection and recycling, especially in urban centres. As organised reverse logistics networks expand, there is an opportunity to integrate informal workers into safer, more productive value chains. Training, formal employment, and better working conditions can improve livelihoods while increasing material recovery rates. This alignment of social and environmental outcomes is central to a truly inclusive circular economy.
The industrial sector stands to gain significantly from reverse logistics as well. Heavy industries, infrastructure projects, and manufacturing plants generate large volumes of scrap, surplus materials, and end of life equipment. Structured reverse flows allow these materials to be recovered and reintegrated into production cycles, reducing procurement costs and exposure to commodity price volatility. In a global environment marked by supply chain disruptions, such resilience is becoming a strategic priority.
India’s logistics ecosystem is gradually adapting to these needs. Integrated supply chain providers are expanding capabilities across warehousing, transportation, technology, and sustainability services. Multi city networks make it possible to aggregate returns efficiently, even in a geographically diverse market. Investments in green infrastructure signal a broader shift towards long term value creation rather than short term cost optimisation.
Looking ahead, reverse logistics will be a defining pillar of India’s circular economy journey. As consumption grows and resources become more constrained, the ability to recover value from what was once considered waste will separate resilient supply chains from fragile ones. The transition will require collaboration across manufacturers, retailers, logistics providers, policymakers, and consumers. It will also require a mindset shift, from viewing returns as friction to recognising them as flows of opportunity.
India has the scale, entrepreneurial energy, and policy momentum to lead in this space. By strengthening reverse logistics capabilities today, the country can unlock economic value, reduce environmental impact, and build supply chains that are fit for a circular future. The path forward is not without complexity, but the rewards, for businesses, society, and the planet, are well worth the effort.