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Circular Economy in the Slums – Dharavi, Mumbai

Circular Economy

Dharavi, Asia's most crowded slum

June 28, 2020, 7:28 am

By Zayaan Merchant, Senior Prefect at GEMS Wellington Academy


Our contemporary understanding of sustainability is correlated with images of high-income countries investing in large scale energy management though, the notion of sustainability is far more diverse than that. Sustainability as a school of thought prides itself on being innovative, open-minded, and responsible, particularly with resource consumption that does not endanger future generations’ needs. Best practices of sustainability can be seen across the globe, and the UAE is an excellent example of how sustainable development is integrated into policy to stimulate change. However, sustainability doesn’t always need to have execution at macroscopic levels; sometimes, it can be done within communities. An uncommon example of sustainability is seen in the circular economy of Asia’s largest slum – Dharavi, located in Mumbai.

Before understanding how Dharavi embodies a circular economy, it is essential to understand what a circular economy is and how it promotes sustainability. To comprehend a circular economy, however, it is vital to assess the underlying economic problem and how the circular economy caters to this. Founding father of modern economics, Paul Samuelson, defined the underlying economic problem as the answers to the questions: “for what, whom, and how to produce.” The circular economy concentrates on “how to produce” nourishing best practices of recycling, reusability, and renewable energy.

It may be helpful to visualize this concept as a flow diagram. Traditional businesses manufacture goods and services using finite resources, disposing waste, and inducing an external cost of production for society, but the circular economy is different. Instead of merely disposing of the waste, a circular economy (or firms that embody its values) use the waste as a means of raw materials for the production of new goods and services. Essentially put, it is an economic perspective based on a 21st-century upheaval – “reuse, reduce, and recycle.”

Now that we have understood what a circular economy is, a manifestation of this school of thought is present in  Dharavi. With over 750,000 inhabitants and 6,000+ small enterprises, Dharavi is one of the most economically active areas within Mumbai, producing an annual turnover of approximately $750,000. Being an informal economy – an economy in which data collection on economic measures such as unemployment are inaccurate, and government policy is not as enforced – it would be unexpected for Dharavi to promote such a forward-thinking initiative; yet, the circular economy present is one of the most advanced in the country.

Nothing is wasted in Dharavi. From plastics and car batteries to computer parts, fluorescent lights, ballpoint pens, plastic bags, paper, cardboard boxes, wire hangers, and any scrap material. Its economy is a pioneer in sustainable waste management systems. Contemporary geographers describe the area as a ‘plastic recycling goldmine.’ After the sorting into recyclable and non-recyclable materials, crushing takes place- here is where materials are crushed into tiny plastics. Then is the cleaning process and distribution model that caters to over 60% of Mumbai’s industries that need plastic materials. The plastic recycling industry within Dharavi alone employs over 250,000 workers, Dharavi is truly a goldmine circular economy.

Our primary thought when we think of slums may not be sustainability, but it should. Dharavi may be perceived as under-developed, but a reason for such a robust informal economy is the presence of a circular economy. The mindset of not wasting anything may not have come from a sustainability standpoint, but nonetheless, it works out as a sustainable model. The environment is not only saved but so is the economy- a trade-off many high-income countries struggle to make. Let us all try and implement elements of a circular economy into our homes or workplaces; after all, this is our planet, and we are responsible for the sustainability of its resources.



Bardoloi, Y., 2018. What Can Be Done To Help The Residents Of Dharavi, One Of Asia’S Largest Slums?. [online] Young Post. Available at: <>

Berstein, D., 2016. Dharavi, Mumbai: The Pros And Cons Of Living In A Slum. [online] HubPages. Available at: <>

Bhat, A., 2020. Dharavi, India Is More Than Asia’s Largest Slum. [online] Culture Trip. Available at: <>

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