Water is essential not only for daily life but also for agriculture and industry. In India, even a single day of shortage can disrupt the lives of millions. Between 2017 and 2021, the thermal power sector lost 8.2 terawatt-hours of energy due to insufficient water for cooling.
India is facing severe water stress, impacting 66% of its population. The country has been water-stressed since 2011, and the situation continues to deteriorate. Per capita water availability has fallen from 1,800 cubic meters in 2001 to 1,368 cubic meters in 2021. In the coming years, nearly half of India’s water demand may go unmet.
On the occasion of World Nature Conservation Day on July 28, let’s delve deeper into India’s water and wastewater management sector.
Current State of India’s Water Management Sector
India is the 5th largest water and wastewater treatment market globally. Valued at $10.4 billion in FY24, it is projected to grow to over $17.9 billion by FY29.
India’s water management market is expanding, but not quickly enough to keep up with rapid urbanisation, raising serious concerns.
Indian industries are generating wastewater at an annual growth rate of 7.69% by volume, while the market for wastewater treatment is growing at around 12%. Additionally, 70% of India’s wastewater is discharged into rivers, and only 30% is treated, highlighting a major environmental concern and a significant business opportunity.
To address this, the government plans to set up over 500 new treatment plants and add 20 billion litres of treatment capacity by 2027. Given the rising concern over water scarcity, companies in the water and wastewater sector have a crucial role to play in treating and reusing water.
Read More From Junk to Investment: The Untapped Value in E-Waste
Challenges in Water and Wastewater Treatment
Here are the key challenges facing India’s water sector:
Lack of Funding at Competitive Rates: Most infrastructure funding comes from the government. Private investors remain wary due to perceived financial risks and the absence of proven business models.
Low Private Investment: With limited examples of profitability, private entities are reluctant to enter the water treatment space.
Lack of Standardisation: The absence of consistent metrics for tracking and reporting outcomes makes it difficult for investors to assess impact.
High Setup and Operational Costs: The capital and operational costs of treatment plants are often prohibitive for smaller towns and industries.
Weak Policy Enforcement: Only 11 out of 28 states have wastewater reuse policies. Most lack clear mechanisms for enforcement and accountability.
Outdated Legal Frameworks: While laws such as the Water Act (1974) and Environment Protection Act (1986) exist, enforcement is inconsistent, and these laws often fail to address modern wastewater challenges.
Urbanisation Outpaces Infrastructure: Rapid urban growth is generating more waste than existing infrastructure can handle, widening the treatment gap.
Government Initiatives
Increased Budget Allocation: In Budget 2025, the government allocated Rs 99,502.85 crore to the Ministry of Jal Shakti, with Rs 74,226.02 crore (74.59%) directed to the Department of Drinking Water and Sanitation.
Jal Jeevan Mission: Aiming to provide safe and adequate drinking water through individual household tap connections in rural India.
Namami Gange Mission: Launched in June 2014 with a Rs 20,000 crore outlay, the mission focuses on reducing pollution and rejuvenating the Ganga River.
AMRUT 2.0: Launched on October 1, 2021, AMRUT 2.0 aims to make cities self-reliant and water-secure by ensuring universal coverage of sewerage and septage management in 500 cities.
Atal Bhujal Yojana: This initiative seeks to improve groundwater management in water-stressed states like Gujarat, Haryana, and Rajasthan.
Stocks to Add to Your Watchlist
Future Outlook
Globally, the water and waste management sector is expected to grow from $329 billion in 2023 to $576 billion by 2032, at a CAGR of around 6%. The smart water management segment is set to expand even faster — at 11% CAGR — reaching $44 billion by 2029.
India’s market is still developing and not yet as advanced as those in Europe, North America, or parts of the Asia-Pacific. According to the CPCB 2023 report, the country generates about 72,368 million litres of sewage daily but treats only 44% of it — underscoring both a crisis and an opportunity.
With rising government investment, technological advancements, stricter environmental regulations, and an increasing number of public-private partnerships, the next decade could mark a major transformation for India’s water and wastewater treatment sector.
*The companies mentioned in the article are for information purposes only. This is not an investment advice.
*Disclaimer: Teji Mandi Disclaimer
