Pune's Battery Problem Is Not a Price Problem : It's a Coordination Failure.
Written by - Prakhar Borgaonkar, Research Intern, Pune International Centre.
Beyond The Blueprint is the Blog Series by Pune International Centre (PIC) under Centre for Cooperative Federalism and Multilevel Governance. It explores cities beyond policy, using data, field insights and analysis, bringing governance closer to people.
This month's blog examines Pune's growing battery waste challenge through the lens of governance and coordination. It argues that low formal recycling rates are not a result of poor market economics, but of misaligned incentives among consumers, recyclers, and government agencies. The blog highlights the need for integrated action, stronger collection systems, and collaboration with informal actors to build a more circular and sustainable battery economy.
Every year, roughly 1.06 million smartphones are retired in Pune alone. Each one contains a small lithium-ion battery. Collectively, that is approximately 47.5 tonnes of battery mass cycling out of Pune’s hands annually, carrying recoverable mineral value of over ₹1.44 crore per year at current market prices (Abramczyk et al., 2025; Fastmarkets, 2025).
Almost none of it is being recovered formally. Around 70% is handled by informal aggregators (Gattu et al., 2022). And a significant share of it never leaves the household at all, sitting quietly in kitchen drawers and storage boxes across the city.
The Phone in the Drawer
Ask yourself: when did you last hand over a retired smartphone to a recycler, formal or informal? If you hesitate, you are not alone, and you are not irrational.
Field research in Pune finds that data privacy concern is the single most barrier to battery disposal. Consumers are unwilling to hand over devices even after factory resets, which many do not trust. The rational consumer’s utility from disposing of a battery works out to −2.43. In plain terms: it means residents have a strongly negative incentive to recycle their phone battery. Hoarding is the bounded rational strategy. This is a reasonable response to an unreasonable system.
The battery in the drawer is not inert, a degrading lithium-ion cell risks fire and leakage at home, making consumer awareness a policy intervention, not just a footnote.
The Recycler’s Paradox
Here is where economics becomes genuinely surprising. One might assume formal recyclers cannot compete on price with the informal sector. The numbers say otherwise.
A formally licensed recycler in Pune earns approximately ₹319.40 per kilogram of black mass, after paying GST, transport costs, dismantling labour, and compliance overheads. An informal kabadiwala, operating without any obligations, earns approximately ₹309 per kilogram, a lower margin than the formal recycler (Fastmarkets, 2025; EVreporter, 2025). The minimum subsidy required for formal recycling to be competitive works out to −₹10.40 per kilogram. No subsidy is needed at all at the per-unit level.
And yet formal collection sits at 10%. Informal dominates at 70%. The formal sector earns more per kilogram and still cannot access the market.
This is not a price failure. It is a coordination failure, a Nash trap in which actors are simultaneously stuck, each behaving rationally given what the others are doing, and none able to improve their situation alone.
Everyone Is Waiting for Someone Else to Move
The structure of the problem, mapped as a Stackelberg game. The model presents a duopoly. Each actor is waiting for another to move first. Nobody moves. The equilibrium holds at 10% formal collection stable, rational, and socially wasteful.
A scenario analysis run across four policy configurations produces clear, ranked findings:
Doing nothing (S0) leaves Pune at 10% formal collection. A transport cost subsidy alone (S1) raises formal collection to 35%; it helps, but does nothing for consumer supply.
A data-wipe certification mandate (S2) unlocks an additional 21,384 kg of battery feedstock per year, a 45% increase in available supply, but only pushes formal collection to 20% because unlocked supply still flows to informal channels.
A ULB collection mandate (S3) required to designate and maintain battery collection infrastructure is the highest single-policy lever, raising formal collection to 40% and welfare to ₹0.82 crore.
Only the combination of all three (Scenario S4) the model reaches 72% formal collection, generating ₹1.44 crore per year in mineral recovery value from Pune alone, and produces a welfare gain of ₹1.29 crore annually over the baseline (Abramczyk et al., 2025).
This is the result that matters: The 70% BWMR target is not achievable through subsidies alone, or mandates alone, or infrastructure alone. It requires all three, acting simultaneously.
The Informal Sector Cannot Be Eliminated
Even at the optimal scenario, informal collection does not disappear. At S4 equilibrium, informal operators still handle 20% of Pune’s battery waste. Kabadiwalas have lower fixed costs, deep community networks, and established trust that formal systems lack. Attempting elimination by enforcement alone would suppress total collection rates, not raise them.
The more productive framing supported by Kala and Bolia (2022) is integration, not elimination. Informal aggregators who channel batteries into formal processing streams should be recognised, certificated, and incentivised to do so. They are not the problem. They are an underutilised asset in a system that has not figured out how to use them.
The Costs Nobody Is Paying For
The recycler’s paradox formal operators earning more per kilogram and still losing the market looks even sharper once you factor in the externalities.
Informal battery recycling is not benign. The health burden falls on workers typically from low-income communities with no occupational safety coverage and on the neighbourhoods where informal dismantling occurs. These are real costs. They are simply not on anyone’s balance sheet.
What does uncontrolled battery disposal actually cost society? Studies on informal e-waste processing in high-density urban settings in India and China find that heavy metal contamination produces measurable public health costs (Kala & Bolia, 2022). This matters enormously for the economics set out earlier.
When Social Cost Enters the Calculation, the Margin Nearly Vanishes
The formal recycler’s apparent advantage against the informal operator rests on private costs and revenues alone. It says nothing about what the transaction actually costs society.
If we add the externality cost of informal processing to the informal sector’s margin, the social cost rises from ₹309.00 to approximately ₹319.00 per kilogram. The formal recycler’s social cost remains at ₹319.40, because formal processing under licensed conditions largely internalises these environmental costs through mandatory compliance requirements. Making the gap between formal and informal recycling is effectively negligible.
The Central Lesson
The battery in your kitchen drawer is not there because you are careless or ignorant. It is there because the system gave you no good reason to remove it, no safe place to take it, and no assurance that your data would be protected when you did.
This coordination failure cannot be resolved by subsidies or enforcement alone. They require actors at every level of the system to move simultaneously, and that requires a government willing to be the first mover.
The BWMR 2022 target of 70% formal collection is achievable. The numbers show it clearly. What they also show is that it will not be achieved by accident, or by circular targets without circular infrastructure, or by waiting for consumers to overcome their privacy anxiety on their own.
Lastly, the question is not whether the minerals are there, the question is whether the governance is?
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