India’s sewage and wastewater sector is at an inflection point, where the focus is shifting from expanding sanitation infrastructure to managing wastewater as a strategic water resource. Urban India generates over 52,000 million litres per day (mld) of wastewater, while the effective utilisation levels are half this capacity, exposing a persistent gap between infrastructure creation and operational performance. This mismatch has made wastewater management one of the most critical components of the country’s water security agenda.
Over the past year, the sector has witnessed a noticeable shift from a narrow focus on treatment capacity creation towards outcomes such as reuse, energy recovery, operational efficiency and long-term sustainability. The government programmes have matured from asset-heavy programmes into platforms emphasising performance, reuse and financial viability. At the same time, state governments and urban local bodies are experimenting with circular water systems, digital monitoring, decentralised solutions and partnerships with private players and start-ups. Parallelly, the industrial wastewater segment has continued its transition towards zero-liquid discharge (ZLD), advanced oxidation and fit-for-purpose reuse, supported by regulatory enforcement and water scarcity pressures.
System-wide coherence for programme-level outcomes
There has been a continued deepening of wastewater investments under national missions, coupled with a qualitative shift towards system-wide planning. For instance, schemes such as the Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Swachh Bharat Mission and Namami Gange have moved beyond standalone sewage treatment plants (STPs) to emphasise sewerage coverage, interception of pollution loads and defined reuse targets. This evolution is clearly reflected in the scale and structure of investments by AMRUT, under which over 6,000 projects, with over Rs 830 billion investment, have been undertaken, with the vast majority of them already completed, as of December 11, 2025. This equates to the creation of over 4,700 mld of sewage treatment capacity, around 21,700 km of extensive sewer network expansion and a growing base of reuse-oriented infrastructure of over 1,400 mld capacity. The programme’s emphasis on both building capacity and last-mile sewer connectivity, including faecal sludge and septage management, highlights a maturing understanding that wastewater treatment is also shaped by decentralised coverage.
Large metropolitan initiatives illustrate this approach clearly. The completion of the Delhi Interceptor Sewerage Project in December 2025 reflects a growing policy preference for intercepting sewage before it enters drains and rivers, thereby addressing pollution at source rather than relying solely on downstream treatment. By integrating trunk sewers, diversion structures and treatment capacity, such projects have an emphasis on basin-scale pollution control. Similar thinking is visible in cities preparing for future population and demand growth, such as Pune and Nashik, where municipal authorities have prioritised upgrading and modernising existing STPs, alongside adding new capacity. Beyond large metros, Tier 2 and 3 cities such as Bhilai and Chhindwara are also adopting sewerage master plans that combine treatment capacity, interception, automation and long-term operations and maintenance (O&M).
At the state level, long-term vision is emerging as an important driver of wastewater planning. The Telangana Vision 2047, announced in December 2025, explicitly positions wastewater reuse and sludge-to-energy as pillars of a circular water grid for Hyderabad. By committing to 100 per cent municipal wastewater treatment and reuse and linking future sewage infrastructure to urban growth corridors, the vision integrates wastewater management with land use planning, energy recovery and climate resilience.
Resource recovery gains a structural momentum
One of the most predominant trends defining the sector is the growing emphasis on the circular use of treated wastewater across municipal and industrial contexts. Its use is being operationalised through formal municipal decisions rather than remaining an informal or peripheral activity. In Mumbai, the Brihanmumbai Municipal Corporation’s recent move to supply treated water from the Colaba STP for non-potable applications such as horticulture and cricket ground maintenance reflects a pragmatic shift in how urban utilities are beginning to substitute fresh water with reclaimed water for routine municipal uses. While the absolute volumes involved may be limited at this stage, such arrangements are significant as they institutionalise reuse through contracts and service agreements.
A more system-oriented approach to reuse is visible in Delhi, where policy approvals by the state government in November 2025 have enabled the diversion of treated wastewater towards environmental and recharge applications at scale. In this context, the Delhi Jal Board’s proposal to use treated effluent for wetland revival, lake rejuvenation and groundwater recharge, covering multiple sites across the city, indicates an emerging strategy that links wastewater reuse directly with ecological restoration. Complementing these municipal initiatives, decentralised reuse practices have also demonstrated viability in controlled settings, such as wastewater reuse plan implemented at Bhopal Ijtema in 2025, where multistage filtration systems enabled large volumes of wastewater to be treated and reused on-site.
Private participation reshaping sector delivery models
The expanding role of private players and start-ups has become a defining feature of India’s wastewater sector in recent times, driven by the scale of investment required, the complexity of modern treatment systems and the increasing emphasis on long-term performance. Municipalities are increasingly recognising that private sector participation is critical not only for construction but also for sustained operations, technology adoption and innovation.
Large engineering, procurement and construction (EPC) and hybrid contracts awarded during the year show the continued appetite for private participation in setting up wastewater infrastructure. Projects such as the 910 mld Panjrapur WTP Project in Maharashtra, awarded to Welspun Enterprises Limited, with Veolia Water Technologies as the technology partner and the 150 mld Fatehwadi STP in Gujarat, awarded to Khilari Infrastructure Private Limited in November 2025, highlight how cities are bundling construction with long-term operational responsibility, in order to improve accountability and asset performance. Similarly, the Bhilai Sewage Master Plan integrates design, construction, automation and 15 years of O&M under a single contract structure, reflecting a growing preference for life-cycle-based procurement models.
Advanced treatment and digital intelligence enhancing operations
An acceleration in the adoption of advanced treatment technologies and digital systems is evident across municipal and industrial wastewater segments. This shift has been driven by tighter effluent standards, growing reuse requirements and the need to control rising operating costs in energy-intensive treatment facilities. The uptake of ZLD and advanced membrane treatment has accelerated, particularly in water-intensive sectors such as textiles, chemicals and power. Industrial clusters in states such as Gujarat, Tamil Nadu and Maharashtra are increasingly deploying treatment trains combining membrane bioreactors, reverse osmosis and evaporation systems to meet stricter discharge norms and reduce freshwater dependence. Alongside process upgrades, digitalisation has emerged as a critical enabler of operational performance. Municipal utilities are increasingly deploying supervisory control and data acquisition systems, online sensors and data analytics platforms to monitor influent and effluent quality, energy consumption and equipment health in real time. This trend is no longer limited to large centralised STPs. The decision by the Pune Municipal Corporation to digitally map and monitor private housing society STPs reflects an acknowledgement that decentralised treatment assets also need regulatory visibility and performance tracking. Similarly, new STPs planned in Nashik and Raipur are being designed with integrated automation and monitoring systems to ensure consistent compliance with discharge norms.
Indigenous and natural solutions
Higher attention is being paid to development and application of indigenous, nature-based and resource-efficient wastewater treatment strategies. This trend reflects both the operational realities of Indian cities, particularly smaller towns and peri-urban areas, and a policy recognition that sustainability and affordability are critical to scaling wastewater solutions nationwide. Research-led innovations emerging from Indian institutions have played a notable role in reinforcing this shift. In December 2025, researchers at IIT Bhilai developed a sustainable polymer technology that converts toxic industrial sulphur waste into advanced materials capable of removing hazardous pollutants from water. Similarly, research at IIT Guwahati has highlighted the potential of biological treatment pathways for contaminant removal. These developments underscore the growing relevance of biologically driven and low-energy treatment methods, particularly for addressing heavy metal contamination in industrial effluents and polluted waterbodies.
Regularised and targeted trajectory
India is entering a phase where future growth of the sector will be driven less by the creation of basic infrastructure and more by the scaling of reuse markets and advanced treatment services. Forward-looking assessments by institutions such as NITI Aayog and the Ministry of Jal Shakti in 2025 have indicated that by 2030-32, a substantial share of incremental non-potable urban water demand, particularly from industry, construction and thermal power, will need to be met through reclaimed wastewater, given declining per capita freshwater availability and intensifying intersectoral competition. Other industry market outlooks reinforce this trajectory, projecting wastewater reuse and recycling as among the fastest-growing segments of India’s water sector. These assessments estimate that the treated wastewater market, valued at around Rs 630 million in 2021, is expected to reach Rs 830 million in 2025 and expand to nearly Rs 1.9 billion by 2050, driven by industrial reuse, urban non-potable demand and tightening environmental norms.
Besides these growth signals, qualitative shifts in policy, regulation and institutional design are shaping the sector’s longer-term trajectory. Emerging national and subnational planning frameworks increasingly position wastewater as a core element of water security and climate resilience strategies, rather than a peripheral sanitation concern. Ongoing efforts by the Bureau of Indian Standards and the Central Public Health and Environmental Engineering Organisation to update technical guidance around fit-for-purpose reuse standards are expected to enable wider and more differentiated application of treated wastewater across construction, agriculture, groundwater recharge and urban services. At the same time, sector discourse in the recent past has increasingly emphasised financing and governance reform, with blended finance, municipal bonds and green or blue financing instruments being explored to support capital-intensive reuse and resource recovery projects. This is complemented by a gradual shift away from pure EPC contracting towards long-term O&M and performance-linked models, reflecting the growing recognition that the sustainability of wastewater systems will ultimately depend on professionalised operations, data-driven compliance and credible cost recovery mechanisms.
Shubhangi Goswami
