The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a ₹1,500 crore incentive scheme to promote critical mineral recycling in India. The scheme aims to build capacity for extracting essential minerals from secondary sources such as e-waste, lithium-ion battery scrap, and other end-of-life materials. This step is a part of the National Critical Mineral Mission, which focuses on strengthening domestic capacity and ensuring supply chain resilience for minerals vital to India’s growing industries.
Critical minerals are crucial for various sectors, including renewable energy, electric mobility, electronics, and high-tech manufacturing. However, developing mines and exploring new reserves often involves long gestation periods before minerals reach industries. Recycling, therefore, presents a more immediate solution for securing supply chains and reducing dependency on imports. With this in mind, the government has decided to encourage both large and small recyclers, including start-ups, to participate in this mission.
The scheme will run for six years, starting from the financial year 2025-26 up to 2030-31. It has been designed to benefit both new units and companies looking to expand or modernize their recycling operations. The focus will remain on the actual extraction of critical minerals, rather than just intermediate processes such as black mass production. To support this, the government will provide a combination of capital expenditure (Capex) and operational expenditure (Opex) subsidies.
The Capex subsidy will cover 20% of the cost of plant, machinery, and associated equipment for companies that start production within a given timeframe. If the timeline is not met, the subsidy will be reduced. Alongside this, the Opex subsidy will incentivize incremental sales beyond the base year 2025-26. Companies can avail 40% of the eligible Opex subsidy in the second year and the remaining 60% in the fifth year, covering the period from 2026-27 to 2030-31.
To ensure wide participation, limits have been placed on the maximum support any company can receive. Large entities will have a ceiling of ₹50 crore in total incentives, including a cap of ₹10 crore on Opex subsidy, while small entities will have a ceiling of ₹25 crore, including up to ₹5 crore in Opex support. Notably, one-third of the scheme’s outlay has been reserved exclusively for small and new recyclers, including start-ups.
The expected outcomes of this scheme are significant. It is projected to develop at least 270 kilotons of annual recycling capacity, resulting in around 40 kilotons of critical mineral production each year. The initiative is also expected to bring in nearly ₹8,000 crore worth of investments and generate close to 70,000 direct and indirect jobs.
The government has formulated the scheme after several rounds of consultations with industry experts and stakeholders, highlighting its inclusive approach to policymaking. By tapping into secondary sources, India is taking an important step towards building a secure and sustainable critical mineral ecosystem, which will support its clean energy transition and technological growth in the years ahead.
Mr. Shubham Vishvakarma, Founder and Chief of Process Engineering at Metastable Materials, said the cabinet’s approval of the ₹1,500 crore incentive scheme is indeed a big push towards building and strengthening a circular economy for the critical minerals industry. The focus on recycling of lithium-ion batteries and e-waste indicates a clear focus on securing resources for a sustainable future and recognizes recyclers and critical metal refiners like us as partners in national strategy. For innovators in this space, this scheme by the Government of India provides a clear roadmap to scale, modernize, and diversify capacity while also creating green jobs and reducing India’s dependence on imports.
Pratik Kamdar, Co-founder & CEO of Neuron Energy, said, “The continuation of the 5% GST rate on electric vehicles is a positive step in maintaining affordability and supporting demand in the segment. As the sector grows, there is increasing relevance in exploring GST rationalisation for the broader EV ecosystem, including batteries, charging infrastructure, and battery swapping services. A uniform tax structure across these components could help reduce operational inefficiencies, streamline costs, and improve accessibility for both manufacturers and consumers.
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