written by Khatabook | August 12, 2021

How To Start A Scrap Business In India?


Scrap business has the ability to eliminate harmful waste to the environment. Metal scrap is one of India's most profitable industries, and it requires only a minimal initial investment. For many people, metal scrapping is a thriving business, especially in these difficult economic times. The scrap business is based on repurposing unused materials, primarily aluminium. Aluminium is a metal that is widely recycled across the world. Initially, the scrap business in India was run mainly by socially backward individuals; However, as time has passed, the scrap sector has attracted the educated classes, who are increasingly investing in it.

Being an entrepreneur is much more than just making money; it also has a significant environmental impact. You can limit the number of components that can affect the environment as an entrepreneur. Those who choose to work in this industry gain the satisfaction of helping the entire planet while also making money.

Let's take a look at how to start a metal scrap business to see if it's a good investment of your time and money.

What Is A Scrap Business?

We frequently throw unwanted and undesirable metals in the form of aluminium or steel and those who deal in scrap acquire such scraps. In this way, they recycle all the so- called worthless metals, plastics, textiles, and food etc. These are melted down and turned into raw material, which is what recycling means. Scrap is a term used in the industrial sector to describe goods made of metal or other materials that cannot be repurposed. Metals are recycled and melted down to create new products.  As a result, scrap business is a way for entrepreneurs to make money by collecting these raw materials.

What is the most effective way to start a scrap business in India?

Be aware of the industry. You'll need to precisely identify the scrap you want to sell and must be able to recognise and sort various metals. To do so, first, check the metal's ferromagnetism with a magnet. The majority of your scrap will most likely be made up of five key metals-

  1. Iron & its alloy, steel, has a wide range of applications and are likely to be the most frequent metal you'll scrap.
  2. Another metal that will most likely make up the majority of your scrap is copper. It's non-ferromagnetic and weighs somewhat more than iron. Copper is used in wiring and high-quality cookware.
  3. Aluminium is a non-ferromagnetic metal that is also quite light. It is as common as iron.
  4. Bronze is a copper alloy that is far less valuable and has a lighter, almost gold tone.
  5. Lead is a soft and heavy metal. It's commonly used in bullets and as a radiation barrier.

Before you start your scrap business, get a good understanding of the metals. If you scrap electronics, you'll likely stumble across rarer, more precious metals.

Before setting up a metal scrap business, you need to keep certain things in mind:

1. Learn how to deconstruct objects to sell them for scrap: 

Some metals can be dismantled using common equipment, while others will necessitate a metal saw. You'll probably need to dissolve larger objects into smaller components to sort the scrap metals. Before scrapping, do thorough research online or learn from the scrap dealers.

While disassembly, tiny threats could be lurking. When separated, hard plastic, electrical products,  items, glass, metals can cause injury. As a result, caution is required since accidents quite often occur in this sector.

2. Find Out Where You Can Collect Scrap: 

To get started in the scrap business in India, you'll need first to find recycling centres; you must know where to obtain scrap. Scrap can be found at industries, near homes, based on the type of scrap you require for your business.

Then decide who your target audience will be and what you'll make out of the discarded materials, as well as the prices of the scrap. Select the type of scrap you require; you must not begin the business unless you are aware of all of these factors. If you don't grasp these factors, you may end up purchasing scrap that you can't sell, resulting in a loss.

To establish a scrap business, you need to know more than just about recycling centres and commodities prices. Knowing about scrap trading, cost specifics of transporting the waste to the recycling facility are important things to consider after picking the appropriate scrap, raw materials, and stuff to be created.

3. Transporting scrap: 

It's time to transport the scrap; transportation must be arranged to move goods from one location to the other, pick a van that can accommodate large loads of scrap metal. While you can easily rent a vehicle to transport scrap, it is vital to safeguard your vehicle's interior from damage or stains. Choose a nearby scrap centre to collect the scrap to save money on transportation. 

4. Make a space for your scraps: 

You'll need a spacious place to sort through your scrap metal, deconstruct it, and store it. You'll need to set up a yard depending on how much scrap you collect. A property for a scrap shop can be rented or leased. You must also ensure that the location is secure to avoid theft and maintain safety. Invest in safety equipment because dealing with scrap metal can be hazardous.

5. Dealing with Legal Issues

Taking care of legal matters like insurance, licencing taxes:

  • In the event of theft or a natural calamity, having insurance for your home and vehicle will assist you in recouping costs.
  • To start a scrap metal business, no licences are required; however, you must obtain permits from The Local Municipal Area to avoid future problems by demonstrating your safety procedures, providing proof of insurance, and show your understanding of local legislation.
  • See a scrapping business professional to ensure you've covered all bases such as inquiring about tax, licencing, safety and so on.

6. Managing Your Business: 

It's time to start your scrapping business once you've gathered all the above information. Most scrap business require at least two people. As a result, you can hire someone or get a business partner. You can start on your own if it's about managing items like wires and electronics.

7. Promote and market your scrapping business: 

Don't leave any stone unturned; advertise your business in all feasible places, including your local newspaper, online forums, and door-to-door flyers. Tell your neighbours you're launching a scrap metal business and ask them to donate you any scrap metal they have. Follow your scrap metal business plan to cover every area for establishing this business. In this way, you'll be able to sell your scrap metal.

Also Read: Different Types of Industries- Primary, Secondary & Tertiary

Important Points to Remember

You can start your scrapping business with a small investment and progressively grow your business. In comparison to the past, the scrap business in India is today more profitable. If the company is driven by market trends and consumer needs, you can get good returns.

Here are some top scrap business ideas:

1. Plastic recycling:

Millions of tonnes of plastic waste are created each year, with only around 10-20% of that material being recycled, resulting in increased pollution. Plastic is currently one of the most significant contributors to global warming. Plastic pollution has become a danger to the natural surroundings, human health, and society. Plastic may be recycled to a point where it generates a profit and reduces waste in society.  Educate yourself about the various forms of plastic, their uses, and the market worth of recycled plastic for a better understanding of the industry.

2. Metal recycling: 

Metals are necessary, adaptable, and useful; metals are utilised to manufacture vehicles, railways, cars, aeroplanes, ships, among other things. Metal scrap recycling is the most well-to-do of all recycling enterprises. Aluminium and steel are two of the most commonly recycled metals. The metals are categorised according to their properties.

Begin by gathering all metals, start distinguishing what can be recycled from what can't once the scrap metal is collected. Only high-quality original materials used in the recycling process can contribute to a high quality recycled product.

Scrap metal is classified as ferrous (comprising iron, such as steel) or nonferrous (not containing iron, such as aluminium). After sorting, the metal must be compacted to enable further processing, and the metals are broken into little pieces. The melting and purifying process begins. The melting process necessitates a significant amount of energy. The purification process starts once the melting process is completed.

3. Battery Recycling: 

The need for batteries has skyrocketed in recent years. This need is fuelled by the fact that billions of people own electronic devices such as laptops, cameras, mobile phones that use batteries. Have you ever wondered what happens to these batteries when they run out of power and can no longer be used? They are discarded and collected by scrap metal dealers to be recycled.

Batteries, both non-rechargeable and rechargeable, are collected for recycling from homes, businesses, and factories. Before recycling batteries, recycling companies sort them based on their composition, age, and condition. Battery recycling is a strong market with significant returns.

4. Recycling of Food Waste: 

Every year, millions of tonnes of food are thrown away by families worldwide, the majority of which could have been consumed. Throwing food trash wastes a lot of energy, water, and packaging used to produce, transport and store it. Food waste can be processed in an anaerobic digester, which removes oxygen from the process. The waste is converted to solid and gas forms.

5. Recycling Textiles: 

The typical lifespan of a garment is estimated to be 3 years. They are discarded as old garments after the period has passed. Even garments that are in decent shape but are out of style are sometimes thrown away, especially in children's clothing, as they grow so quickly. These garments can be put to good use again. It is possible to recycle used and worn garments.

These fabrics are first separated by kind and then broken down into individual pieces. Following that, these textiles will be recycled into little threading of various colours. Textile recycling also contributes to environmental protection. Clothes that have been recycled take up less space in landfills. Cushions, wallets, and quilts can all be made out of used clothing. Clothing that has been damaged can be repurposed as rags and dusters.

Sewing patches, beads, ironing graphics, and other techniques can be used to turn old garments into art pieces.

What other scrap businesses are there in India?

Other scrap business in India is as follows:

  1. Recycling Cartridges
  2. Recycling of E-Waste
  3. Farm waste Recycling
  4. Recycling of Utensils
  5. Recycling of paper
  6. Recycling of tire
  7. Rubber Recycling
  8. Recycling Plant
  9. Recycling of glass
  10. Recycling of wood
  11. Recycling Aluminium Can 
  12. Computer Recycling

Also Read: Top 5 Government Loan Schemes for Small Business in India


​It is a sign of intellectual creativity that these businesses can recycle old items and make them usable while also protecting the environment. If you choose one of these businesses in today's market, you will undoubtedly make a profit. However, in order to do so, you must have a scrap metal business plan and gain a thorough understanding of how to start scrap business in India.


1. What is scrap trading?

Selling a recyclable material to a scrap trader for less than its initial purchase price is known as scrap trading. Starting a scrap company in India is one of the most successful ventures that requires only a small initial investment. It has a bright future ahead of it, as well as excellent profit margins.

Anyone may start a scrap business with knowledge of different metals, how to recycle them, and how to trade them in the market.

2. What is the best location for a scrap metal business?

Choose an easily reachable place by public transportation, as transportation is critical in the scrap company, and make sure you have adequate space to keep the scrap you collect.

3. Is it possible for me to start a scrap business online?

Scrap business needs a lot of field labour, but you may exchange your recycled things online, as well as gather scrap metals and market your business online.

4. What is the profit margin in the scrap metal business?

When you receive a free scrap item, you may expect to make 100% of the profit from this business. You will obtain good returns depending on the type of merchandise you are recycling 

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