Government Approves ₹1,500 Crore Scheme to Boost Critical Mineral Recycling

The Union Cabinet has approved a ₹1,500 crore incentive scheme to develop domestic recycling capacity for critical minerals from secondary sources, marking a significant step toward supply chain resilience in strategic materials.

The scheme, running from FY 2025-26 to FY 2030-31, forms part of the National Critical Mineral Mission (NCMM) and addresses the immediate need for critical mineral supply while long-term mining operations mature. Prime Minister Narendra Modi chaired the cabinet meeting that greenlit the initiative.

Scope and Eligibility

The program targets three primary feedstock categories: electronic waste, lithium-ion battery scrap, and other recyclable materials including catalytic converters from end-of-life vehicles. Both established large-scale recyclers and emerging small entities, including startups, are eligible for participation.

One-third of the total scheme allocation has been specifically reserved for smaller recyclers and new entrants, ensuring broader industry participation. The initiative covers investments in new facilities as well as capacity expansion, modernization, and diversification of existing operations.

Financial Structure

The incentive framework comprises two main components. A 20% capital expenditure subsidy applies to plant machinery, equipment, and associated utilities, with reduced rates for projects exceeding specified timelines. Additionally, an operational expenditure subsidy provides 40% support in the second year and 60% in the fifth year, based on incremental sales performance above FY 2025-26 baseline figures.

To ensure wider distribution of benefits, individual entities face subsidy caps of ₹50 crore for large companies and ₹25 crore for smaller firms. Within these limits, operational subsidies are further restricted to ₹10 crore and ₹5 crore respectively.

Expected Outcomes

Government projections indicate the scheme will generate substantial economic and employment benefits. The initiative aims to establish 270 kiloton annual recycling capacity, producing approximately 40 kiloton of critical minerals annually. Total private investment is expected to reach ₹8,000 crore, creating an estimated 70,000 direct and indirect employment opportunities.

The program focuses specifically on recycling operations that extract critical minerals rather than those limited to black mass production, ensuring value addition throughout the processing chain.

Strategic Context

The scheme addresses India's growing dependence on critical mineral imports by developing domestic recycling capabilities. As the country's renewable energy and electric vehicle sectors expand, securing reliable access to lithium, cobalt, nickel, and other essential materials becomes increasingly important for economic security.

Industry consultations through dedicated meetings and seminars informed the scheme's design, reflecting stakeholder input on practical implementation challenges and market dynamics.

The initiative represents a bridge strategy while India develops its upstream mining capabilities, providing immediate supply chain support through waste stream monetization and environmental sustainability.