The market value of treated wastewater in India will be INR 830 million in 2025 and INR 1.9 billion in 2050 if we have the mechanism to sell it to select sectors, according to an independent study by the Council on Energy, Environment and Water (CEEW). The study, Reuse of Treated Wastewater in India highlights that India will produce over 35,000 million cubic meters of wastewater by 2050, and if treated, this water can irrigate 26 times the area of New Delhi. 

Water security is an imminent issue in India. As per CEEW analysis using Central Water Commission estimates, 11 out of the 15 major river basins in India will experience water stress by 2025. Hence, it is essential to explore alternative sources of water to address the demand-supply gap.

India treats only 28% of the total sewage it generates per day from the urban centres (CPCB 2021). Out of the 72,368 million litres per day (MLD) of sewage produced in urban centres, the actual treatment is of only 20,236 MLD (CPCB 2021). Class I cities (those whose population is above 1,00,000) and class II cities (with population of 50,000– 99,999), which represent a major share (72%) of the total urban population, produce an estimated 38,254 MLD of sewage, of which only 30% is actually treated (CPCB 2021).

The untreated wastewater is then discharged into freshwater bodies, such as rivers. Given the exponential amount of wastewater generated in the country, India has immense potential to meet the growing water demand across different sectors and improve the water environment with proper management. Through this study, CEEW intends to estimate the market potential for the reuse of treated wastewater (domestic sewage) at the national scale and make recommendations to strengthen the existing governance on reuse.

“At 1,486 cubic meters of water available per capita per annum, India is a water-stressed country. Promoting the reuse of treated wastewater will reduce pressure on freshwater resources and lead to several benefits and positive externalities. There is a huge market potential for reusing it for irrigation alone provided financially viable models are developed to scale up wastewater treatment and reuse,” says Nitin Bassi, Programme Lead, CEEW.

Economic and market potential of treated wastewater reuse

• 11,622 million cubic metres (MCM) is the estimated amount of treated wastewater that was available in India for reuse in 2021. Based on projected sewage generation and treatment capacities in the future, this will become 15,288 MCM by 2025 and 35,178 MCM by 2050.
• About 8,603 MCM of treated wastewater was available for reuse in the irrigation sector in 2021; this could have replaced the equivalent freshwater demand for irrigation. It had the potential to irrigate 1.38 million hectares (Mha) of land, which is equivalent to about nine times the area of New Delhi. By 2050, this would go up to about twenty-six times the area of New Delhi.
• Reusing treated wastewater for irrigation in 2021 could have generated INR 966 billion in revenue. We estimate that 28 million metric tonnes (MT) of the produce of selected horticulture crops could have been generated using the available treated wastewater for irrigation in 2021. This produce could have further generated revenue of INR 966 billion.

Around 6,000 metric tonnes (MT) of nutrients could have been recovered from the available treated wastewater in 2021, generating savings of INR 50 million. As per our estimates, the nutrients supplied by currently available treated wastewater (for irrigation use in 2021) amount to more than 6,000 tonnes. Further, considering the market value of the nutrient load, we estimate that the total savings from the reduction in fertiliser use through irrigation using treated wastewater would have been more than INR 50 million.

• Reusing treated wastewater in irrigation could have reduced greenhouse gas (GHG) emissions by 1.3 million tonnes in 2021. Our analysis suggests that the available treated wastewater would have irrigated 1.38 Mha in 2021, which would have reduced pumping in 3.5% of the groundwater-irrigated area. Further, this would have led to a reduction of 1 million tonnes of GHG emissions. Additionally, on account of the inherent nutrient value of TWW, fertiliser consumption would have reduced, resulting in further reduction of GHG emissions by 0.3 million tonnes.
• INR 630 million would have been the market value of treated wastewater in 2021. Our analysis suggests that the market value of the treated wastewater available in 2021 (11,622 MCM) would have been over INR 630 million, if we had the mechanism to sell treated wastewater to different sectors for reuse. The market value will substantially increase to over INR 830 million in 2025 and INR 1.9 billion in 2050 at the current market rate.

Review of existing state policies on treated wastewater reuse

The study undertook this analysis to understand the comprehensiveness of the treated wastewater reuse policies of Indian states and to determine whether they will be able to realise the market potential of the treated wastewater in the future. The CEEW study found that only 10 states in India have a treated wastewater reuse policy. Of these state policies, most do not have incentives for end users of the wastewater, or define quality standards for the specific purpose of reuse.

“​Provisions for treated wastewater quality standards in state policies are limited to safe discharge standards. All Indian states must define reuse-specific wastewater treatment standards for safe reuse across different sectors. Finally, states should develop effective outreach plans to build public confidence and nudge behaviour for the successful implementation of wastewater reuse projects,” Saiba Gupta, Research Analyst, CEEW.

Key gaps that need to be addressed

Only a few states identify the positive externalities associated with the treatment of wastewater and reuse. These include improvement in the water quality of receiving natural water bodies and the associated public health impacts.

• Only a few policies prioritise sectors for reuse. Also, only a few policies classify treated wastewater into mandatory and non-mandatory reuse.
• Most policies make only a brief recommendation on the technologies for wastewater treatment. A majority of the state policies that we reviewed do not provide details on the treatment process and technologies. Further, they make only a brief mention of the tertiary treatment process and technologies.
• Most policies do not consider the allocation principles for treated wastewater. They lack the enforcement mechanism that provides a blueprint for their effective implementation.
• There is no discussion on the incentives to encourage the reuse of treated wastewater. Most state policies do not have any provisions for incentives for end users, which can promote the reuse of treated wastewater.
• Most policies do not define the role of external stakeholders, such as community or industrial groups. Such a description is important from the perspective of community acceptance of treated wastewater for reuse at large.
• Treated wastewater quality standards are not defined for the specific purpose of reuse. Most state policies provide Central Pollution Control Board (CPCB) or State Pollution Control Board (SPCB) treated wastewater discharge standards. However, they do not define treated wastewater quality standards for specific reuse purposes.
• Most policies do not define binding provisions to aid effective implementation. Though majority of the state policies refer to various central and state acts as their regulatory framework, there is very limited mention of the binding provisions required for policy implementation.

The criteria for the selection of appropriate business models is not defined. Almost all state policies call for public–private partnerships (PPP) for developing treated wastewater reuse projects. However, they do not include the criteria for the selection of appropriate business models for effective implementation. Though the national framework on the safe reuse of treated water that was launched in January 2023 provides guidelines on some of the identified gaps, the state policies were launched much before and need revision to address these gaps comprehensively.

• Learning from the global best practices: Based on our analysis of three selected countries (Spain, Israel, and Singapore) that are at an advanced stage in their reuse of treated wastewater, the study identified key drivers, barriers, and enablers.

On the basis of the review of existing state policies and learnings from global best practices, the study makes the following recommendations to strengthen the existing governance on the reuse of treated wastewater in India:

• Make a paradigm shift in ideology: Wastewater needs to be considered an integral part of water resources and hence addressed in all water management related policies, plans, and regulations. Also, the potential of treated wastewater as an alternative source of water needs to be recognised.
• Define water quality standards: Water quality standards for both safe discharge and reuse need to be well defined with a risk-reducing approach and a periodic review mechanism in place for regular monitoring and assessment.
• Set robust institutional mechanisms: Urban local bodies should be empowered to formulate and adopt long-term, city-level wastewater reuse plans, with roles and responsibilities clearly defined. Further, the institutional arrangement should incorporate the engagement of end-user groups for the successful implementation of reuse projects.
• Improve financial viability: Targeted performance based incentives for the operators/end-users of wastewater treatment plants, and an effective pricing mechanism based on the market potential of the treated wastewater and considering different categories of end-users and their paying abilities, can act as catalysts to improve the financial viability of reuse projects.
• Leverage technological developments: Need-based and demand-driven technological advancements are essential to upholding the efficiency and effectiveness of wastewater treatment. For this purpose, we need dedicated funds for the research and development of such technologies, which can optimise resource efficiency. Indian states need to come out with a clear strategy for research and development in this sphere, especially focusing on low-cost, highly energy-efficient technological innovations that could be in cooperation with other relevant global actors.
• Invest in public outreach: Indian states should develop effective public outreach plans to build public confidence and nudge behaviour for the successful implementation of wastewater reuse projects. Public acceptance is a crucial factor for successful implementation of reuse policies and projects.

Read the full study here.