₹1,500 Crore Incentive Scheme Greenlights Domestic Critical Mineral Recycling

The Union Cabinet, under the leadership of Prime Minister Narendra Modi, on Wednesday approved an ambitious ₹1,500 crore incentive scheme to increase India’s recycling capacity for extracting critical minerals from secondary sources.

The National Critical Mineral Mission (NCMM) drives this initiative to strengthen India’s domestic capabilities and supply chain resilience.

Recognising that new mining ventures and foreign mineral acquisitions require lengthy timelines, the government views recycling as a near-term and effective solution to secure the supply of essential minerals critical for strategic industries.

Scheduled to run over six financial years from FY 2025–26 to FY 2030–31, the scheme covers the recycling of various materials, including electronic waste (e-waste), lithium-ion battery scrap, and other scrap such as catalytic converters from end-of-life vehicles.

The scheme targets a wide spectrum of beneficiaries, from large, established recyclers to smaller enterprises and start-ups, with one-third of the total outlay earmarked for smaller firms.

Incentives will support both the creation of new recycling units as well as the expansion or modernisation of existing facilities.

The scheme crucially extends support to recyclers who extract critical minerals, not just those producing intermediate materials like black mass.

Incentive Structure

• Capital Expenditure (Capex) Subsidy: 20% subsidy on plant, machinery, and utilities, provided units commence operations within the prescribed timelines. Delays in operationalisation will result in reduced subsidy rates.
• Operational Expenditure (Opex) Subsidy: Linked to incremental sales over the FY 2025–26 baseline year, with firms eligible for 40% of eligible opex costs in Year 2 and 60% in Year 5, contingent on meeting sales targets.
• Subsidy Limits: The maximum cap is ₹50 crore for large entities and ₹25 crore for smaller entities. Opex support is capped at ₹10 crore and ₹5 crore, respectively.

Moreover, the government anticipates that the scheme will establish an annual recycling capacity of 270 kilotonnes, yielding approximately 40 kilotonnes of critical minerals each year.

The scheme will mobilise investments of around ₹8,000 crore and generate nearly 70,000 direct and indirect jobs.

This initiative signifies a strategic pivot towards circular economy principles, reducing dependence on imported minerals and enhancing India’s self-reliance in critical raw materials vital for sectors such as electronics, electric vehicles, and clean energy technologies.

Further, by fostering innovation and supporting smaller firms alongside established players, the scheme aims to spur sustainable growth and build a resilient industrial base aligned with global clean energy and technology trends.

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