Imagine an entrepreneur setting up an e-waste recycling plant in India. The industrial land has been finalised, machinery worth several lakhs has been ordered, and the application for Pollution Control Board consent is underway. The business expects to start processing electronic waste within the next few months. However, during a review of the statutory approvals, the promoter discovers that factory licensing and occupational safety requirements have not been properly assessed.
This situation highlights an important challenge in recycling plant development. Entrepreneurs often concentrate on environmental approvals, CPCB registration and machinery installation while overlooking the industrial licensing requirements governing their facilities.
A Factory Licence for Recycling Plants in India is an important regulatory requirement for qualifying recycling facilities. Its applicability depends on the manufacturing activity, number of workers, use of power, location and relevant safety regulations. Certain hazardous recycling processes may also attract additional requirements.
With the implementation of the Occupational Safety, Health and Working Conditions Code, 2020, effective from 21 November 2025, factory licensing requirements must be assessed under the updated legal framework and applicable state provisions.
Understanding these requirements early can help recycling businesses plan their investments, prepare accurate documents and avoid unnecessary delays before commercial operations begin.
A factory licence is a statutory approval required for factories covered by the applicable industrial safety and licensing framework. It allows the competent authority to regulate qualifying industrial premises and examine compliance with prescribed workplace safety, health and operational requirements.
Recycling facilities frequently involve activities such as shredding, crushing, washing, dismantling, material separation and metal recovery. These processes may involve heavy machinery, electrical equipment, hazardous materials, dust generation and other occupational risks.
Factory licensing helps establish accountability for the occupier and management of the industrial premises. It also operates alongside the legal requirements governing safe machinery operation, worker protection, emergency arrangements and workplace conditions.
For recycling entrepreneurs, factory licensing should be considered during the Detailed Project Report (DPR) preparation stage. The proposed machinery, workforce, building layout and processing technology influence the approvals required for the facility.
Importantly, a factory licence is different from Consent to Establish (CTE), Consent to Operate (CTO) and waste-specific registration. These approvals serve different purposes and may be required independently.
The primary legal framework is the Occupational Safety, Health and Working Conditions Code, 2020, which replaced the earlier Factories Act, 1948 framework from 21 November 2025, subject to applicable transitional and saved provisions.
Under Section 2(1)(w) of the Code, the general thresholds for classification as a factory are as follows:
| Type of manufacturing facility | General worker threshold |
|---|---|
| Manufacturing process using power | 20 or more workers |
| Manufacturing process without power | 40 or more workers |
These thresholds represent an increase from the earlier general limits of 10 workers with power and 20 workers without power.
However, an important legal qualification applies. Where a state had prescribed a different worker threshold under its existing law immediately before the commencement of the Code, that threshold continues to apply until amended by the competent state legislature.
Therefore, recycling plant owners must verify the applicable state provisions rather than assuming the national thresholds operate identically everywhere.
The factory definition considers workers employed on any day during the preceding 12 months. The calculation is not limited to the number of permanent employees appearing on a particular shift.
Workers deployed through contractors and different working groups or relays must also be examined according to the statutory definition.
For example, a recycling plant employing 15 regular workers and 8 eligible contract workers may have a total relevant workforce of 23. If the manufacturing process uses power, the plant could meet the general factory threshold.
Similarly, a facility operating in 2 shifts cannot simply assess each shift independently and ignore other workers employed during the day.
This is why workforce planning should form part of the licensing assessment before operations commence.
A smaller recycling plant is not necessarily exempt from all industrial safety requirements.
Section 3 of the OSH Code provides for registration of establishments meeting the applicable conditions, generally at 10 or more workers. Occupational health and safety obligations can therefore apply even when an industrial unit does not reach the general factory threshold.
Certain notified hazardous or life-threatening activities may also be subject to special provisions.
The correct approach is to assess factory licensing, establishment registration and occupational safety requirements separately.
Recycling involves several technologies and processing methods. The activity carried out inside the facility matters more than the business description used in its registration documents.
Under the OSH Code, manufacturing processes include activities such as making, altering, repairing, washing, cleaning, breaking up and treating articles or substances for use, sale or disposal.
Many recycling operations fall within this broad definition.
E-waste recycling facilities may process discarded computers, electronic equipment, electrical assemblies, cables and other covered materials.
Activities involving powered shredders, granulators, dismantling equipment and mechanical separators can constitute manufacturing processes. Factory licensing applicability must therefore be assessed against the worker threshold and relevant state requirements.
Plastic recycling commonly involves sorting, washing, grinding, extrusion and pellet production. A plant converting post-consumer plastic waste into recycled HDPE, PP or PET material generally undertakes industrial processing.
The facility should evaluate its factory licensing obligations alongside plastic waste processor registration and Pollution Control Board approvals.
Lead-acid and lithium-ion battery recycling facilities may involve mechanical dismantling, crushing, separation, chemical treatment or metallurgical recovery.
Apart from general factory applicability, these projects require particular attention to hazardous materials, occupational exposure, fire prevention and emergency planning.
Tyre shredding, crumb rubber production, tyre pyrolysis, copper cable granulation and metal recovery can also involve manufacturing processes.
Facilities operating furnaces, heating systems or chemical recovery equipment may require a more detailed safety and regulatory assessment than a purely mechanical sorting operation.
A business engaged only in waste collection, storage or trading should be evaluated separately. It should not automatically be classified as a factory merely because it handles recyclable materials.
Certain recycling activities involve occupational hazards that require more extensive controls.
The First Schedule of the OSH Code specifically includes hazardous waste and e-waste processing plants, extraction of oil and raw materials from scrap tyres, and certain metallurgical and chemical activities among industries involving hazardous processes.
Depending on the nature of the operation and applicable legal provisions, additional requirements may include occupational health monitoring, dangerous-process safeguards, site appraisal, safety documentation and emergency preparedness.
For example, a lead-acid battery recycling facility may expose workers to lead-containing dust and other hazardous substances. A lithium-ion battery processing plant may present electrical, chemical and thermal risks during battery handling and dismantling.
A recycling entrepreneur should therefore examine the actual processing technology before finalising machinery procurement or plant construction.
The safety assessment should cover normal operations as well as maintenance activities, material handling and emergency situations.
Documentation is one of the most important parts of factory licence preparation. Although the exact list varies across states, most recycling projects require business records, premises documents, technical drawings and operational information.
The following checklist can be used during the initial document-readiness assessment.
| Document category | Documents to prepare |
|---|---|
| Business registration | Incorporation certificate or partnership deed, PAN, GST and business details |
| Occupier information | Identity documents, occupier details, manager information and authorisation documents |
| Land and building | Ownership records or lease deed, approved building plans and applicable land-use permissions |
| Plant engineering | Site layout, machinery layout, manufacturing process flow and technical specifications |
| Workforce information | Proposed worker strength, shift details and relevant contractor information |
| Safety arrangements | Fire prevention details, emergency arrangements and process-specific safety documentation |
| Environmental approvals | Applicable CTE, CTO and environmental authorisations where required by the licensing procedure |
These documents form a working checklist. Not every item is a mandatory upload in every state, and the competent authority may require additional documents based on the facility’s classification.
The application should clearly identify the legal entity operating the factory and the person legally responsible as its occupier.
For a company, an appropriate board resolution or authorisation may be required. Partnerships and proprietorships may need corresponding ownership and management documents.
The legal entity name, premises address and authorised person details should remain consistent across statutory applications.
The factory layout should reflect the actual machinery and manufacturing process proposed at the location.
For example, a plastic recycling facility with a washing line, shredder, extruder and pelletiser should show the arrangement of these machines along with material movement, storage and safety access.
Similarly, an e-waste recycling plant should identify dismantling sections, shredding equipment, separation systems and storage areas.
Incomplete or inconsistent layouts may require clarification or revision during application scrutiny.
The applicant must establish its lawful right to use the premises for the proposed industrial activity.
Ownership records, lease agreements, approved building drawings and industrial land-use permissions may be relevant. Additional permissions may be necessary when the facility is located in a leased industrial shed or an industrial development area.
A registered business address alone does not establish that the proposed recycling activity is permitted at the site.
The factory licensing process is administered through the relevant state government or competent authority. Application forms, portals and supporting document requirements vary.
A typical recycling project can follow the steps below.
The first step is determining whether the recycling facility qualifies as a factory under the applicable law.
This assessment should consider the manufacturing process, use of power, worker deployment, state-specific thresholds and hazardous-process provisions.
A written applicability assessment is particularly valuable when the project is close to the worker threshold or proposes operations in multiple phases.
Before substantial construction or machinery installation, confirm that the proposed industrial activity is permitted at the selected location.
The promoter should review industrial zoning, building permissions, lease conditions and relevant safety restrictions.
For factories requiring previous site or construction permission under Section 79 of the OSH Code and applicable rules, the relevant approval process should be completed.
The project engineer should prepare the site plan, factory building layout, equipment arrangement and manufacturing process description.
Technical drawings should include relevant access routes, work areas, material storage, utilities and safety facilities.
The engineering team should also confirm that the proposed building accommodates machinery installation and safe maintenance access.
The applicant submits the prescribed form through the applicable state portal or notified procedure.
Details commonly include the occupier, factory address, proposed manufacturing activity, worker strength, installed power and supporting documents.
The prescribed government application fee must be paid according to the applicable schedule.
The competent authority may scrutinise the documents, request additional information or undertake an inspection according to the relevant procedure.
Areas requiring attention can include building safety, machinery guarding, electrical installations, emergency exits and hazardous-material handling.
Any deficiencies communicated by the authority should be resolved before the application proceeds.
Once the relevant approval is granted, the factory must operate according to the applicable licence conditions and statutory requirements.
Changes involving the occupier, manufacturing process, machinery, worker strength or factory premises may require an amendment, intimation or additional permission.
A factory licence should therefore be treated as an ongoing compliance obligation rather than a one-time document.
Consider an illustrative project involving a medium-sized e-waste recycling plant proposed in an industrial area.
The entrepreneur plans to establish a mechanical recycling facility with a design capacity of 2,400 tonnes per annum. Assuming 300 operating days, the average planned processing requirement would be approximately 8 tonnes per day.
The facility is designed to include shredding, cable granulation, magnetic separation and material sorting. Its proposed workforce consists of 18 regular workers and 7 eligible contract workers, giving a total of 25 workers.
Because the plant uses electricity for its manufacturing process and the workforce exceeds the general 20-worker threshold, factory licensing becomes an important requirement, subject to the relevant state provisions.
The promoter would also need to evaluate hazardous-process safety requirements because e-waste processing is specifically identified in the First Schedule of the OSH Code.
During the project-planning exercise, the team would need to coordinate the factory layout, machinery schedule, worker information and environmental approvals.
The main lesson is that the factory licence assessment should be completed before commissioning, not postponed until the recycling machinery is ready for operation.
This example is an illustrative case study prepared to explain regulatory applicability. It does not represent an actual client engagement.
Factory licence fees differ across Indian states. There is no single government fee applicable to every recycling plant.
The payable amount may depend on the maximum worker strength, installed power, licence category, state fee schedule and selected validity period.
Project promoters should distinguish the official government fee from professional expenses associated with technical drawings, application preparation and safety documentation.
Under Section 79(2) of the OSH Code, a deemed-permission mechanism applies to specified applications for factory site, construction or extension permission when a complete application receives no order within the applicable prescribed period, which cannot exceed 30 days.
This provision should not be confused with automatic issuance of a factory licence. It also does not replace Pollution Control Board consents or other statutory approvals.
Licence renewal, validity and processing requirements should always be verified against the operative rules and procedures of the relevant state.
Factory licensing is only one component of the regulatory approval framework for recycling businesses.
A new recycling facility may require Consent to Establish before installation or construction activities covered by the consent process. Consent to Operate is generally required before commencing operations that fall within the applicable pollution-control framework.
Waste-specific registrations and authorisations may also be necessary, depending on the material being processed.
For example, e-waste recyclers covered by the E-Waste (Management) Rules, 2022 require registration through the designated CPCB portal. The CPCB recycler registration procedure also calls for relevant consent and hazardous-waste authorisation information.
Plastic recycling facilities may require plastic waste processor registration under the Plastic Waste Management Rules, while battery recycling facilities are subject to registration requirements under the Battery Waste Management Rules, 2022.
Fire safety approvals, environmental clearance, hazardous-waste authorisation and other permissions should be examined where applicable.
Importantly, factory licensing and environmental approvals are separate regulatory obligations. Obtaining CPCB registration does not automatically establish compliance with factory licensing requirements.
Many avoidable application problems begin during early project planning rather than at the time of submission.
One common mistake is preparing factory licence documents independently from the DPR and Pollution Control Board application. This may result in differences in the declared machinery, installed power, factory address or operating process.
Another issue is failing to account properly for the total workforce. The inclusion of relevant contract workers and workers across different groups can influence the factory applicability assessment.
The most important checks include:
A structured compliance review can identify such issues before they result in application deficiencies or project delays.
A Detailed Project Report should do more than estimate plant investment, machinery capacity and profitability. It should also establish how the proposed facility can be lawfully constructed, commissioned and operated.
For example, a recycling project initially planned with 12 workers may later expand to 28 workers following installation of additional machinery. This change can affect its factory licensing position.
Similarly, adding a chemical recovery section to an existing mechanical recycling plant may introduce new occupational safety and environmental requirements.
A well-prepared DPR should therefore connect the manufacturing process, worker deployment, power requirements, plant layout and approvals schedule.
This approach helps business owners assess the regulatory implications of project expansion before committing additional capital.
A Factory Licence for Recycling Plants in India is an important consideration for entrepreneurs establishing e-waste, plastic, battery, tyre and metal recycling facilities.
Under the OSH Code, 2020, the general factory thresholds are 20 workers where manufacturing uses power and 40 workers where it does not, subject to applicable state-law exceptions. Smaller establishments and hazardous operations may still have other registration and safety obligations.
Successful compliance planning begins with a proper applicability assessment, followed by accurate business documents, technical drawings, workforce information and coordination with environmental permissions.
For recycling plant developers, addressing these requirements during the planning stage can reduce regulatory uncertainty, prevent avoidable revisions and support smoother project implementation.
Setting up a recycling facility requires coordinated planning across technology selection, land assessment, environmental compliance, industrial permissions and operational design. Green Permits supports entrepreneurs and industrial businesses with Detailed Project Reports, plant setup advisory and regulatory approval planning for e-waste, plastic, battery and other recycling projects. Explore our Recycling Plant Setup Services to understand the approval and technical requirements involved in developing a recycling business.
Green Permits Consulting LLC provides support for factory licence applicability assessments, documentation reviews, environmental permissions and recycling plant setup compliance planning.
Website: www.greenpermits.in
Phone: +91 78350 06182
Email: wecare@greenpermits.in
