With water demand rapidly increasing, treated used water offers a practical, scalable solution to bridge the gap between supply and demand. According to the new Liquid Waste Management Rules 2024, large consumers such as industries and utilities must treat and reuse at least 20 percent of wastewater, rising to 50 percent by 2031. | Photo credit: istock.com
This combines ₹72,597 crore ($8.35 billion) in annual market revenues with ₹1.56-2.31 lakh crore ($18-27 billion) in infrastructure investments, says the report titled: Financing for treated water reuse in India.
Rising demand for water
With water demand rapidly increasing, treated used water offers a practical, scalable solution to bridge the gap between supply and demand. According to the new Liquid Waste Management Rules 2024, large consumers such as industries and utilities must treat and reuse at least 20 percent of wastewater, increasing to 50 percent by 2031.
The shift adds regulatory weight to a growing market that could simultaneously reduce freshwater extraction; increasing local resilience; and generate employment. The report predicted that scaling up treated water reuse could create over one lakh new jobs across the country by 2047.
National Framework
CEEW’s findings come as the country continues to develop its national framework for safe treated water reuse, providing policymakers with a data-driven roadmap to finance and scale up reuse in cities.
India could reuse 31,265 million m³ of treated used water by 2047 – enough to meet a significant portion of industrial and irrigation demand – if supported by the right mix of financing, regulation and infrastructure.
Underutilized
Currently, only about 28 percent (20.24 billion liters per day) of water used is treated. More than 80 percent of cities do not reuse treated water or do not have a functional infrastructure for reuse. Urban India generates more than 72 billion liters of used water per day, but much remains untreated or underutilized.
No more liability
Shalu Agrawal, program director of CEEW, said used water should be treated as an asset and not a liability. “Every liter recycled is an investment in the resilience of our cities, industrial competitiveness and energy security. Treated used water is not the end of a cycle, it is the beginning of a circular economy for urban India.”
Circular solutions
By financing circular solutions today, through public-private partnerships, municipal green bonds and industry co-investments, we can turn what is considered waste into wealth for a sustainable future, Agrawal said.
Surat, for example, currently supplies tertiary-treated used water to industries at ₹36 per kiloliter – slightly lower than freshwater rates – helping the city generate over ₹230 crore in revenue between 2014 and 2021.
Reuse certificates
Water reuse certificates can be issued as a market-based mechanism allowing bulk users who exceed targets to trade credits with those who fall short. This will monetize efficiency gains and create incentives for compliance.
Nitin Bassi, Fellow, CEEW, said that scaling up treated water reuse is one of the most practical ways to make India’s cities water secure. Urban local bodies should take the lead in developing long-term urban plans; diversification of financing; and setting fair and cost-covering rates.
Published on November 19, 2025
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