Launched in September 2025 under the National Critical Mineral Mission, the ₹1,500 crore Critical Mineral Recycling Incentive Scheme has received a positive response from industry participants.

Government Incentive Scheme for Critical Mineral Recycling

• Outlay: ₹1,500 crore to promote e-waste and battery waste recycling for recovery of critical minerals.
• Purpose: Serve as a near-term solution until mining and exploration projects become productive.
• Launched under: National Critical Mineral Mission (NCMM)
• Ministry: Ministry of Mines
• Aim: Strengthen India’s supply chain resilience for critical minerals. Create a domestic recycling ecosystem to secure raw materials for clean energy, EVs, and electronics industries.
  

Key Features of the Scheme

• Duration: Six years (2025-26 to 2030-31)
• Scope And Eligible Feedstock: The scheme covers recycling units that extract critical minerals (rather than only preliminary processing). Eligible feedstock includes:
  • E-waste as defined under the E‑Waste (Management) Rules, 2022.
  • Spent lithium-ion batteries (LIBs) scrap (various chemistries) and processing thereof. 
  • Other metal-rich scrap (for example, catalytic converters in end-of-life vehicles, etc) from which critical minerals can be recovered.
• Beneficiaries: Large recyclers and startups, 1/3rd of funds reserved for small/new recyclers
• Incentive Structure
  • Capex subsidy: 20% on plant & machinery, equipment and associated utilities for units starting production within specified timeframe. Delay results in lower subsidy. 
  • Opex subsidy (operational expenditure): Linked to incremental sales over the base year (FY 2025-26).
    • Example: 40% of eligible Opex in year 2 and remaining 60% in year 5, subject to meeting thresholds.
  • Cap: Large units – ₹50 crore (₹10 crore for OPEX)
    • Small units – ₹25 crore (₹5 crore for OPEX)
    • Supports new units, as well as expansion, modernization, and diversification of existing units

Need for Critical Mineral Recycling

• Rising demand for clean-energy technologies: Rapid growth in electric vehicles (EVs), solar power, and electronics manufacturing has sharply increased demand for critical minerals such as lithium, cobalt, nickel, copper, and rare earth elements.
  • Recycling helps meet part of this demand domestically, reducing strain on primary mining sources.
• Import dependence and supply risk: India currently imports most of its critical minerals, making it vulnerable to supply disruptions, price volatility, and geopolitical dependencies.
  • Recycling provides a strategic buffer by recovering valuable metals from secondary sources like e-waste and spent batteries.
• Limited domestic mineral reserves: India’s geological availability of certain minerals (e.g., lithium, cobalt, graphite) is limited.
  • Recycling is therefore essential to ensure a stable and sustainable supply chain without over-reliance on overseas mines.
• Rapidly increasing waste generation: Annual generation of e-waste (~1.75 million tonnes) and spent LIBs (~60 kilo tonnes) is rising with urbanisation and EV adoption.
  • These waste streams contain recoverable metals that are often exported or discarded, leading to resource loss.
• Environmental sustainability: Mining and refining critical minerals have high carbon and water footprints.
  • Recycling uses fewer resources, emits less greenhouse gas, and supports India’s net-zero and LiFE (Lifestyle for Environment) commitments.
• Circular economy and resource efficiency: Promotes a shift from a linear “use-and-discard” model to a circular economy, where end-of-life products become raw materials for new production cycles.
  • Enhances resource efficiency and reduces landfill pressure.
• Compliance with EPR and global sustainability norms: Under the Extended Producer Responsibility (EPR) framework, manufacturers are legally obligated to ensure proper collection and recycling of e-waste and battery waste.
  • Strengthening domestic recycling capacity helps India align with global best practices and EU-style sustainability frameworks.
• Technology and innovation driver: Encourages R&D in hydrometallurgy, bio-leaching, and solvent extraction processes
  • Strengthens India’s research ecosystem (IITs, CSIR labs) and builds a skilled workforce in extractive metallurgy and waste valorisation.

Challenges & opportunities

• Feedstock collection and formalisation: While e-waste and spent batteries are generated in sizeable quantities, collection, formal dismantling, traceability and integration into recycling systems remain challenging.
• Technology & yield: Extracting critical minerals efficiently (especially from mixed or complex waste streams) requires advanced technology (hydrometallurgy etc), skilled workforce and scale. The guideline acknowledges domestic institute capabilities but scaling remains crucial.
• Economics: Recycling critical minerals may still be cost-intensive; the subsidy helps but market viability will depend on global metal prices, feedstock quality, process efficiency, regulatory compliance, and competition from imports/exports.
• Regulatory & ecosystem alignment: Ensuring EPR (Extended Producer Responsibility) frameworks, waste collection networks, formalisation of dismantlers/scrap-processors, environmental clearances and logistics must align with scheme goals.

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What Next / Key Considerations

• Operationalising the scheme: Applicants must ensure they meet eligibility (registration under EPR rules, validity of facility authorisation) and are prepared to start production within specified timeframe to avail full subsidy.
• Scale-up focus: Recyclers should aim to design capacity models aligned with targets (e.g., 10,000 t/yr or more) to benefit. 
• Feedstock sourcing: Securing a steady stream of e-waste, spent LIBs, vehicle scrap will be key. This involves tie-ups with collection networks, dismantlers, EPR channels and possibly imports (customs duty lines for LIB scrap have been adjusted).
• Technology & yield optimisation: Recyclers should evaluate technologies for extraction (hydrometallurgy, metallurgy), target high recovery yields, design processes that comply with environmental standards and deliver critical minerals (not just “black mass”).
• Value chain integration: The scheme emphasises not just downstream (metal extraction) but also upstream formalisation (dismantlers, crushers, shredders) into formal systems, hence there’s opportunity for collaborations and ecosystem building.
• Monitoring & performance review: Recyclers should establish robust systems for tracking incremental sales, capacity utilisation, recovery rates, and meeting scheme milestones to qualify for Opex incentives in years 2 and 5.

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