South Korean electronics behemoths LG and Samsung have initiated legal action against the Indian government, challenging a recently implemented policy that mandates increased payouts to electronic-waste (e-waste) recyclers. Court filings reveal that the two companies have joined a growing list of major corporations contesting India's evolving environmental regulations, citing significant adverse impacts on their business operations.

These lawsuits, scheduled for a hearing on Tuesday alongside other similar challenges, mark a notable escalation in the ongoing standoff between foreign companies and Prime Minister Narendra Modi's administration regarding its approach to waste management practices within the country.

Neither LG nor Samsung responded to requests for comment from Reuters regarding the legal proceedings. Similarly, India's Environment Ministry has yet to issue a statement on the matter.

India currently ranks as the third-largest generator of e-waste globally, trailing only China and the United States. Despite this significant volume, the Indian government reports that only 43% of the country's e-waste was formally recycled last year. A substantial portion, estimated at 80% or more, is handled by the informal sector, comprised largely of unregulated scrap dealers.

Prior to LG and Samsung's legal action, other prominent players in the Indian market, including Daikin, India's Havells, and Tata's Voltas, had already filed lawsuits against Modi's administration, expressing similar concerns over the new e-waste regulations.

At the heart of the dispute is the government's decision to establish a floor price payable to e-waste recyclers. New Delhi argues that this measure is essential to formalize the e-waste recycling sector, attract more organized players, and stimulate much-needed investment in advanced recycling infrastructure.

However, LG's filing with the Delhi High Court, a comprehensive 550-page document reviewed by Reuters, argues that the pricing regulations fail to adequately consider the economic realities faced by electronics manufacturers. The company contends that simply imposing financial burdens on companies under the "polluter pays principle" will not, in itself, achieve the government's stated objectives. LG's filing, dated April 16, further asserts that the government's inability to effectively regulate the informal e-waste sector represents an "enforcement failure" rather than a justification for increased costs on manufacturers.

Samsung, in its 345-page court filing also reviewed by Reuters, echoes these concerns. The company argues that "the regulation of prices does not inherently serve the purposes of environmental protection" and warns that the new policy is "expected to cause substantial financial impact" on its operations.

The new regulations mandate a minimum payment of 22 rupees (approximately 25 U.S. cents) per kilogram for the recycling of consumer electronics. Electronics companies argue that this fixed minimum price will lead to a roughly threefold increase in their recycling costs, disproportionately benefiting recyclers at the expense of manufacturers.

LG's court filing reveals that the company had formally communicated its concerns to the Indian government in August, stating that the proposed rates were "very high and should be reduced" and advocating for market forces to determine recycling prices. Similarly, Samsung's filing indicates that the company wrote to Prime Minister Modi's office last year, highlighting that the new pricing was "5-15 times the price currently paid."

Interestingly, research firm Redseer's data suggests that India's formal recycling rates remain significantly lower compared to other major economies, with the U.S. achieving rates up to five times higher and China at least 1.5 times higher.

Adding to the legal challenges, Indian air conditioner manufacturer Blue Star has also filed a lawsuit contesting the regulations, citing concerns over increased compliance burdens, according to its court filings reviewed by Reuters.

In a recent development, Johnson Controls-Hitachi has reportedly moved to withdraw its lawsuit without providing specific reasons, based on court filings. Both Blue Star and Johnson Controls-Hitachi have not yet responded to requests for comment on their legal actions.

The outcome of these legal battles could have significant implications for India's e-waste management landscape and the relationship between the government and major electronics manufacturers operating within the country. The court's decision will likely shape the future direction of environmental regulations and the implementation of the "polluter pays principle" in India's rapidly growing electronics market.