Treated used water in India presents $35-bn economic opportunity by 2047
Against a backdrop of increasing global freshwater scarcity, New Delhi-based climate think tank CEEW has made a strong pitch for scaling up the reuse of treated used water (TUW) in India, stating that the used water sector presents an economic opportunity of up to $35 billion, encompassing both market potential and investment opportunities by 2047.
The country’s TUW economy could unlock up to Rs 3.04 lakh crore ($35 billion) in economic opportunity by 2047, combining Rs 72,597 crore ($8.35 billion) in potential annual market revenue with Rs 1.56–2.31 lakh crore ($18–27 billion) in infrastructure investment, a new study released today by the Council on Energy, Environment and Water (CEEW) said.
The study projects that India could reuse 31,265 million cubic metres (MCM) of treated used water in 2047 – enough to meet a significant portion of industrial and irrigation demand – if backed by the right mix of financing, regulation, and infrastructure.
As climate change alters the earth’s hydrological cycle, freshwater resources are steadily declining globally. Transitioning from a linear to a circular water management approach, where treated used water (TUW) is viewed as a resource, is crucial for enhancing urban water resilience.
Currently, India treats only about 28 per cent (20.24 billion litres per day) of the used water it generates, and more than 80 per cent of cities either do not reuse treated water or lack functional reuse infrastructure, leaving vast untapped potential in urban systems.
The used water treatment sector will generate over 100,000 jobs by 2047 for maintaining sewage treatment plants alone. Additional jobs will be created for the construction of sewage treatment plants, pump stations, and conveyance infrastructure, the study noted.
The capital cost for establishing used water treatment capacity required by 2047 is Rs 1,56,494 – 2,31,050 crore ($18-27 billion). This is the investment required to reach the national target of 100 per cent used water treatment by 2047.
“Unlocking this economic potential requires scaling up investments in reuse, and moving beyond traditional public finance models”, the study stated.
Urban local bodies (ULBs) in India need to develop long-term, city-level TUW reuse plans. Reuse planning, an element lacking in most Indian cities, should be an essential component of water resource management. Reuse plans should define clear targets for used water treatment and reuse, based on the current and future water demand, as well as planned urban development. Additionally, they should include reuse-specific business models and funding mechanisms for implementing reuse projects, the study suggested.
Financial sustainability for used water projects must be secured at the ULB level through diversified funding streams. As the primary implementing authorities for domestic used water management, ULBs need robust mechanisms for generating additional revenue streams and ensuring cost recovery. This requires integrating used water management into city/ state-level plans and policies, leveraging funds from national schemes, and diversifying financing streams through innovative instruments like performance-linked public-private partnerships and corporate social responsibility partnerships, it added.
“India must treat used water as an asset, not a liability. Every litre reused is an investment in our cities’ resilience, our industries’ competitiveness, and our energy security. Treated used water is not the end of a cycle, it’s the beginning of a circular economy for urban India. It is India’s next big resource for growth, jobs, and resilience. By financing circular solutions today, through public–private partnerships, municipal green bonds, and industry co-investments, we can turn what was once considered waste into wealth for a sustainable future”, said CEEW Director of Programmes Shalu Agrawal.
The CEEW study highlighted how circular investments are already delivering results in Indian cities. Surat currently supplies tertiary-treated used water to industries at INR 36 per kilolitre—slightly lower than freshwater rates—helping the city generate over INR 230 crore in revenue between 2014 and 2021. The study also proposes Water Reuse Certificates as a market-based mechanism allowing bulk users that exceed their reuse targets to trade credits with those falling short, monetising efficiency gains and creating incentives for compliance.
CEEW’s projections are based on national and state-level data from the Central Pollution Control Board, the National Mission for Clean Ganga, and the Ministry of Housing and Urban Affairs. The study estimates future treatment capacity using historical growth rates to 2047, values reuse based on existing industrial and irrigation tariffs, and analyses lifecycle costs, job coefficients, and energy footprints across common treatment technologies to provide a realistic investment and employment roadmap.
