Cabinet Approves Rs.1,500 Crore Incentive Scheme to Promote Critical Mineral Recycling in India

New Delhi – In a decisive step towards strengthening India’s domestic supply chain for critical minerals, the Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a Rs.1,500 crore Incentive Scheme aimed at developing recycling capacities across the country. This initiative forms part of the broader National Critical Mineral Mission (NCMM), which is designed to ensure that India attains self-reliance in critical minerals while building a resilient supply chain that can meet industrial and technological requirements.

Critical minerals, which are essential for a range of high-tech applications including electric vehicles, renewable energy, and electronics, are typically sourced through exploration, mining, and acquisition of international assets. However, these processes often involve long gestation periods before the minerals become available for domestic use. To bridge this gap, the government has focused on recycling secondary sources such as e-waste, Lithium-Ion Battery (LIB) scrap, and other industrial and automotive scrap materials, enabling near-term access to critical minerals while the primary supply chain matures.

The scheme spans six years, from FY 2025-26 to FY 2030-31, and has been structured to support both established recycling companies and new entrants, including start-ups. To encourage participation from smaller recyclers, one-third of the total outlay has been specifically earmarked for them. Incentives under this scheme apply not only to new recycling units but also to expansions, modernization, and diversification of existing facilities. Importantly, the benefits are targeted at the actual extraction of critical minerals, ensuring that support is given to end-to-end recycling processes rather than just preliminary black mass production.

The financial incentives provided under the scheme include both capital expenditure (Capex) and operational expenditure (Opex) support. The Capex subsidy offers 20% assistance on plant, machinery, and associated utilities, applicable for units commencing production within the designated timeframe. Units that delay production beyond the specified period will receive a proportionally reduced subsidy. In addition, the Opex subsidy is structured as an incentive on incremental sales over the base year (FY 2025-26), with 40% provided in the second year and the remaining 60% in the fifth year, contingent on achieving specific sales thresholds. To ensure equitable distribution of benefits, the total combined subsidy for each entity is capped at Rs.50 crore for large units and Rs.25 crore for small entities, with further limits for Opex subsidy at Rs.10 crore and Rs.5 crore, respectively.

The expected outcomes of the initiative are substantial. The scheme is projected to generate 270 kilo tons of annual recycling capacity, resulting in the production of approximately 40 kilo tons of critical minerals per year. It is also expected to attract investment worth around Rs.8,000 crore and create close to 70,000 direct and indirect employment opportunities, significantly boosting economic activity and supporting India’s industrial ambitions.

Prior to finalizing the scheme, the government conducted extensive consultations with industry stakeholders through seminars, meetings, and focused discussions, ensuring that the incentives are practical, achievable, and aligned with the current needs of the recycling sector. This approach reflects the government’s commitment to building a sustainable, inclusive, and technologically advanced recycling ecosystem, which will contribute significantly to India’s strategic and economic goals.

By fostering domestic recycling capacity and promoting sustainable extraction of critical minerals, the scheme is poised to strengthen India’s technological independence, reduce import dependence, and enhance global competitiveness in key sectors such as energy storage, electronics, and advanced manufacturing. The initiative aligns with the broader vision of a self-reliant, future-ready India, while creating new avenues for entrepreneurship and innovation in the recycling sector.