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A country that aims to supply piped drinking water to every rural household continues to lose billions of litres of water daily because of inadequate treatment.

India’s water and wastewater treatment market, valued at $13.1 billion in 2023, is projected to reach $23.85 billion by 2033. This number mirrors India’s accelerating urbanisation, climate fragility, and industrial thirst. In 2020, urban centres generated over 72.4 billion litres per day (BLD) of sewage; yet, the installed treatment capacity stood at just 31.84 BLD. The deficit of over 40 BLD represents a staggering gap in basic infrastructure. Progress here is unbalanced: Maharashtra treated over 8 BLD in end-2023, while Bihar treated under 0.4 BLD, despite comparable population pressures.

A country that aims to supply piped drinking water to every rural household continues to lose billions of litres of water daily because of inadequate treatment and reuse mechanisms. Can a water-secure India ever emerge if it continues to ignore wastewater?

India’s industrial sector is a major player in this landscape. The industrial wastewater treatment sub-market was worth $1.44 billion in 2023 and is set to touch $2.4 billion by 2033.

Sewage treatment, meanwhile, remains the second-largest segment, growing from $5.01 billion in 2023 to a projected $9.08 billion by 2033. Water treatment, including desalination and recycling plants, dominates, climbing from $6.65 billion to $12.37 billion in the same period. This layered growth hints at the simultaneous pressures of urban expansion, rising demand for potable water, and tighter environmental mandates.

However, these numbers obscure a deeper structural issue — policy fragmentation. Despite the consolidation of water-related departments into the Jal Shakti ministry in 2019, overlapping jurisdictions, state-level inertia, and a lack of techno-commercial capacity often derail projects mid-stream.

India’s wastewater sector is undergoing a significant technological pivot. Traditional chemical treatment is steadily giving way to more sustainable, membrane-based approaches like reverse osmosis (RO), sequencing batch reactors (SBR), and membrane bioreactors (MBR). The market for these advanced technologies is buoyed by rising industrial compliance costs and water reuse mandates.

However, with MBR systems being very expensive, the barriers to entry remain steep — particularly for small municipalities and low-income states. Public-private partnerships (PPPs) offer a partial solution, but uptake has been uneven. Tamil Nadu and Gujarat are leading examples, boasting some of the largest municipal and industrial desalination projects in Asia. But here’s the catch — decentralised systems that serve peri-urban clusters, villages, and small towns are virtually absent in policy frameworks. Real-time water quality monitoring, process automation, and AI-enabled compliance tools are still limited to large city projects or high-end industrial clusters.

India’s budgetary allocations for water and sanitation are substantial but not transformative. In 2023, only 67% of Amrut 2.0 funds were utilised, and over ₹6,000 crore of Jal Jeevan Mission grants remained unspent. Moreover, capital allocation is skewed towards urban megaprojects, while smaller cities — where over 60% of untreated wastewater originates — are left behind. Private investment faces its own hurdles. A 2023 industry survey revealed that 53% of wastewater firms cite high operating costs and lack of guaranteed returns on investment for not bidding on tenders. If the wastewater sector is to meet its $23.8 billion potential by 2033, India will need innovative financing mechanisms, including green bonds, water credits, and blended finance models.

India’s wastewater success is often measured by construction of sewage treatment plants (STPs) — by programmes such as Amrut 2.0 and Namami Gange — rather than performance. In 2023, as per the Central Pollution Control Board (CPCB), 40% of STPs failed to meet national discharge standards. Mandating zero liquid discharge (ZLD) for polluting sectors is a step in the right direction. But enforcement remains patchy. Only 13% of textile units in Punjab and Haryana were ZLD compliant as of mid-2023, despite repeated notices. Moreover, state-level implementation varies wildly. While Maharashtra, Gujarat, and Tamil Nadu have crossed 75% of their planned STP capacity, states such as Jharkhand and Tripura remain under 15%.

The “3R” mantra — reduce, reuse, recycle — is slowly entering industrial and municipal thinking. Yet nationally, less than 20% of treated wastewater is reused. The rest is discharged back into the environment. Circular thinking also opens the door to energy recovery, nutrient extraction, and sludge-to-brick conversion. In Pune, for instance, biogas from sewage sludge powers local buses. But such projects are outliers, not norms. India’s policy focus must shift from wastewater disposal to resource recovery.

The challenge is immense — but so is the promise. The drain, it turns out, may be the most powerful pipeline to India’s sustainable future.

Souryabrata Mohapatra is an assistant professor at the IIT Jodhpur School of Liberal Arts, and Amit Mitra is a research associate at NCAER, New Delhi. The views expressed are personal.

Chennai has demonstrated that wastewater reuse is not just a pipe dream, selling secondary-treated wastewater and using proceeds to rejuvenate water bodies. What India needs is an ecosystem to treat 70% of water going down drains.

India is set to become home to a quarter of the world’s urban population living in water-stressed regions. While the nation races towards economic prosperity, its urban centres are buckling under mounting water stress, rapid in-migration, and shrinking freshwater reserves. But what if the solution to India’s water woes — and an untapped economic opportunity — lies not in its rivers or reservoirs, but in its drains?

India generates over 72,000 million litres of domestic wastewater every day, yet only 28% of this is currently treated. The rest contaminates surface water, burdens ecosystems, and worsens public health. In a country where 70% of the water supply is contaminated, affecting 75% of the population, this is more than an infrastructural shortfall — it’s a national crisis.

But hidden in this crisis is a circular economy goldmine. If treated and reused, wastewater can not only replenish urban water supplies and mitigate environmental degradation but also fuel a multi-billion-dollar reuse market.

Scaling up wastewater treatment and reuse isn’t merely a climate or health imperative—it’s an economic one. According to projections, by 2050, India will have the capacity to treat 80 per cent of its sewage, equivalent to 96,000 million litres per day. At current market rates, this could fetch Rs 1.9 billion daily, nearly tripling from Rs 630 million in 2021.

The reuse of treated wastewater (TWW) also offers staggering potential in agriculture. In 2021, 8,603 million cubic metres of TWW could have irrigated 1.38 million hectares (Mha) — roughly nine times the area of Delhi — yielding produce worth Rs 966 billion. 

With inherent nutrients like nitrogen, phosphorus, and potassium, this water could reduce fertiliser use, saving an additional Rs 50 million. By 2050, irrigation potential will become more than triple, enabling over 3 Mha of cultivation. This is circularity in action — using what was once waste to grow food, save water, cut fertiliser use, and generate jobs.

Several Indian cities have already demonstrated that wastewater reuse is not just a pipe dream. Chennai sells secondary-treated wastewater to industries and uses the proceeds to rejuvenate local water bodies. Delhi reuses tertiary-treated water for groundwater recharge, reducing energy demands for extraction. Cities like Gwalior and Kanpur have channelled TWW for suburban irrigation.

But these are exceptions, not the norm. For India to unlock the true potential of this circular economy, we need systemic change backed by strong policy, innovative financing, and public acceptance.

The policy groundwork is slowly taking shape. India’s National Water Policy (2012) mandates TWW reuse. The National Framework on Safe Reuse of Treated Water guides state policies. Schemes like Namami Gange, AMRUT 2.0, and Swachh Bharat Mission–Urban have also injected momentum into urban wastewater management.

Yet, gaps persist. Many state policies drafted before the 2023 framework need urgent updating, especially around effluent quality standards and reuse-specific business models. Urban local bodies must be empowered to create city-level reuse plans, identifying opportunities across irrigation, construction, landscaping, industrial cooling, and more.

Equally critical is the technological shift. In a business-as-usual scenario (unabated growth in GHG emissions), India’s sewage treatment energy demand will more than triple by 2050, rising from 11.6 terawatt hours (TWh) in 2021 to 35.1 TWh. When it comes to technologies like the Moving Bed Biofilm Reactor and Activated Sludge Process, they are energy-intensive, requiring up to 224 kilowatt hours (kWh) per million litres per day (MLD). In contrast, Water Stabilisation Ponds and Upflow Anaerobic Sludge Blankets with Extended Aeration systems demand far less, just 6 and 126 kWh/MLD, respectively.

Switching to low-energy or nature-based solutions — and powering STPs through solar or bio-energy — can make wastewater treatment green and cheaper.

What India needs now is a viable financial ecosystem to fund this transition. Encouragingly, new models are emerging. The Green Credit Programme enables tradable credits for environmentally sound practices like TWW reuse. Similarly, Wastewater Reuse Certificates—pioneered by the 2030 Water Resources Group—operate like carbon credits. Bulk users exceeding their reuse targets earn certificates; others buy them to offset shortfalls. Maharashtra is already piloting this system.

The Hybrid Annuity Model, tested under the Clean Ganga Mission, allows private players to build and operate STPs over 15 years, with the government paying annuities tied to performance. Corporate Social Responsibility funds, too, can be leveraged — whether for building infrastructure or training farmers in safe reuse practices. In short, with the right incentives and institutional mechanisms, wastewater reuse can be both financially sustainable and socially inclusive.

Reusing wastewater has co-benefits beyond the balance sheet. If India had used the available TWW for irrigation in 2021, the reduced pumping and fertiliser usage could have enabled the nation to cut greenhouse gas emissions by 1.3 million tonnes.

Moreover, wastewater management can create green jobs in plumbing, treatment operations, water auditing, and urban planning. As cities expand, these roles will be vital in building climate-resilient infrastructure.

Still, the greatest challenge may not be technical or financial, but behavioural. Many communities remain hesitant about using treated wastewater, particularly in food production. Awareness campaigns, crafted with local insights, are essential to shift perceptions and showcase TWW as a safe, sustainable, and smart resource.

A circular economy is not just about reusing waste, but it’s about rethinking value. India’s wastewater, long seen as a problem, is now an opportunity. If harnessed wisely, it can quench our cities, irrigate our fields, green our economy, and clean our future.

The question is no longer “Can we afford to treat and reuse wastewater?” It is: “Can we afford not to?”

Mohapatra is with IIT Jodhpur, and Mitra is with NCAER. Views are personal.