Govt Deploys ₹1,500 Crore Recycling Incentive Scheme to Secure Localized EV Battery Materials

The Union Government has introduced a 1,500 crore rupee Critical Mineral Recycling Incentive Scheme designed to advance industrial circularity and secure localized raw material streams for the domestic electric vehicle component industry. Announced by the Ministry of Coal and Mines at the Battery Summit 2026, the fiscal framework establishes direct state support to formalize end-of-life battery deconstruction and secondary resource extraction. 

The implementation of the incentive program comes amid a steep trajectory in national energy storage and electric mobility requirements. Industrial projections show that India's annual demand for lithium-ion battery variants is set to expand from 20 gigawatt-hours in 2022 to 220 gigawatt-hours by 2030, reflecting a consistent compound annual growth rate of 50 percent. To meet this volume growth, the country has relied heavily on external cell and material sourcing, with annual lithium-ion battery imports surging from 1.2 billion dollars in fiscal year 2019 to 4.7 billion dollars in fiscal year 2025-26.

G. Kishan Reddy, Union Minister of Coal and Mines, stated at the summit that the next phase of India's clean mobility transition requires a resilient battery ecosystem that hinges on how effectively the nation can reclaim and process critical minerals locally. By incentivizing the recovery of core battery components like lithium, cobalt, and nickel from spent cells, the policy is structured to compress the manufacturing sector's heavy import reliance. To complement the recycling ecosystem, the ministry is also overseeing the development of four dedicated Critical Mineral Processing Parks alongside nine specialized technological Centres of Excellence to elevate domestic value-addition capabilities.

On the primary extraction front, the government continues to accelerate localized mineral procurement and international asset acquisition. Since 2015, the ministry has taken up more than 570 critical mineral exploration projects and successfully auctioned 46 critical mineral blocks across the country, with nearly half of those blocks finalized within the last 18 months. Globally, the state has moved to secure offshore lithium assets in Argentina to lock in long-term raw material supplies for domestic cell manufacturers.