How the Critical Minerals Recycling Scheme Can Be India’s Fastest Route to Manufacturing Sovereignty

Critical minerals, as the name aptly describes, are essential for electric vehicles, electronics, renewable energy storage and defense. Minerals like cobalt, lithium, and nickel play a crucial role in energy storage. Currently, India imports virtually all of its lithium and cobalt and spent over ₹34,000 crore on critical mineral imports in FY2023–24.

Since these minerals are so important, recycling batteries and electronic waste can become a strong domestic source of supply. With a strong recycling ecosystem, dependence on imports and new mining can be reduced, and India can build strategic reserves that protect the country against supply chain disruptions.

Experts worldwide argue that recycling is vital for critical minerals supply security and sustainability. All major economies are racing to scale up recycling. The EU’s Critical Raw Materials Act (2023) sets a goal of 15% recycling of strategic minerals by 2030, and the US has proposed a $12 billion critical minerals stockpile.

India’s “manufacturing sovereignty” i.e., our ability to produce high-tech machinery or batteries at home, is dependent on securing critical mineral inputs through domestic recycling and processing, along with the primary routes of developing new mining assets and scaling refining capabilities.

Recycling Fuels Industrial Strategy: Global Trends

The International Energy Agency (IEA) substantiates the role of recycling in reducing reliance on new mines and enhancing supply security of critical minerals. Globally, recycling rates of nickel and cobalt have reached about 40–50%, providing ~40% of theoretically available scrap for nickel and cobalt (lithium ~20%) (IEA, 2024). There is significant potential for recycling to scale supply with the right policy support.

Internationally, over 30 new measures on critical minerals recycling have been introduced since 2022, ranging from Extended Producer Responsibility (EPR) frameworks to financial incentives. Corporates and automakers are responding to this, and EV battery supply chains are being designed for circularity. Consumer electronics firms are funding e-waste take-back programs, and these global trends foreshadow India’s path as well.

India’s Critical Minerals Scenario

With India being almost 100% dependent on key minerals, its industries are vulnerable to geopolitical risks. EV sales and renewable energy deployments are rising, and with that the domestic demand for lithium, nickel, cobalt and rare earths is set to skyrocket.

In January 2025, the government announced the National Critical Minerals Mission (NCMM) as part of Atmanirbhar Bharat. It is a ₹34,300 crore, seven-year mission (₹16,300 crore direct budget plus ₹18,000 crore expected PSU investment) spanning the full value chain from exploration, mining, and processing to recycling, effectively complementing recycling with mining and international tie-ups.

Under the NCMM, in September 2025, the government approved a ₹1,500 crore incentive scheme to build recycling capacity for critical minerals. This scheme, spanning six years, targets e-waste, lithium-ion battery scrap, and other secondary sources as feedstock. It encourages both new and existing recyclers through capital and operational subsidies. It offers up to 20% capex subsidy on new plants, plus opex-linked incentives (40–60% of incremental sales) over five years.

The scheme targets establishing 270 kilotonnes per year of recycling capacity and recovering 40 kilotonnes of critical minerals annually. The government intends this to catalyse about ₹8,000 crore of private investment and create around 70,000 jobs across the recycling ecosystem. Recycling can rapidly generate material supply and employment even as mining projects mature.

The Critical Minerals Recycling Scheme ties into a broader push for circularity across sectors. India is the world’s third-largest e-waste generator, and much of this e-waste such as phones and PCs contains cobalt, copper, gold and rare earth elements (REEs). The recycling scheme will ramp up formal e-waste and battery waste processing capacity and funnel recovered metals into manufacturing.

Recycling lithium-ion batteries will facilitate the supply of battery materials back into various metal value chains. Platinum group metals (PGMs) and REEs will also be recycled and collectively, these measures will ensure that waste is used as a resource for multiple industries including automotive, batteries, solar, steel, defense and other machinery. Some states like Tamil Nadu and Gujarat are already planning battery parks.

In summary, recycling will shorten lead times. Mines can take decades to yield usable minerals, but recycling plants can supply materials within months to a few years. A closed-loop system for critical minerals can feed India’s gigafactories and over time, mandated targets (such as 35–40% scrap use in steelmaking) will weave recycling into every factory’s supply chain. This will reduce India’s import bill and insulate manufacturers from global shocks and dependencies.

India’s Critical Minerals Recycling Scheme is a decisive step toward strategic autonomy. Its alignment of fiscal incentives with regulatory support and industry action can lay the foundation for high-tech manufacturing. This is an era where raw material supply is as vital as markets, and recycling is India’s fastest route to manufacturing sovereignty. With proper implementation, this scheme will create new industries, jobs, and help turn India into a manufacturing powerhouse amid the global green-tech transition.

Mr. Manikumar Uppala is the Co Founder and Chief of Industrial Engineering at Metastable Materials. Views expressed are the authors’ personal.