The Union Cabinet of India has given its approval to a landmark Rs. 1,500 crore (US$ 170.4 million) scheme aimed at promoting the recycling of critical minerals, a move that underscores India’s strategic push towards resource security, sustainable growth, and green energy. The scheme, part of the National Critical Mineral Mission (NCMM), was cleared on September 3, 2025, and will run from FY26 to FY31 as an immediate, short-term solution until domestic mining and exploration of critical minerals mature.

Background and Significance

Critical minerals such as lithium, cobalt, nickel, and rare earth elements are essential for modern technologies, including electric vehicles (EVs), renewable energy systems, batteries, electronics, and defence applications. However, India, like many other countries, faces a significant supply gap in these resources due to limited domestic availability and high import dependence.

By launching this scheme, the government aims to create a circular economy framework, where valuable minerals are extracted from waste streams like e-waste, used batteries, and catalytic converters, reducing the reliance on imports and promoting sustainable use of resources.

Scope of the Scheme

The scheme targets three key sources of recyclable feedstock:

1. E-waste – discarded electronics such as mobile phones, laptops, and consumer devices that contain rare earths and precious metals.

2. Lithium-ion battery scrap – from electric vehicles, consumer electronics, and industrial applications.

3. Catalytic converters – retrieved from end-of-life vehicles, containing platinum group metals.

By addressing these waste categories, the initiative will not only recover critical minerals but also reduce the growing environmental burden of e-waste and vehicle disposal.

Incentive Structure

The Rs. 1,500 crore scheme is designed to attract a wide range of players—large recyclers, startups, and small-scale operators—through a mix of capital and operating subsidies.

• Capital Subsidy:

  • 20% subsidy on plant and equipment for units starting production within the prescribed timeframe.

  • Benefits reduced for delayed commencement.

  • Capped at Rs. 50 crore (US$ 5.7 million) for large units and Rs. 25 crore (US$ 2.8 million) for smaller/new players.

• Operating Subsidy:

  • Linked to incremental sales of recycled minerals.

  • Disbursed in two phases between FY27 and FY31.

  • Designed to ensure only performing units benefit.

The scheme also earmarks one-third of its allocation specifically for startups and small recyclers, promoting inclusivity and encouraging innovation.

Expected Outcomes

The initiative is projected to deliver multiple economic, social, and environmental benefits:

1. Recycling Capacity – 270 kilo tonnes of total recycling capacity will be established.

2. Critical Mineral Output – Around 40 kilo tonnes of critical minerals will be produced annually.

3. Investment Attraction – Expected to attract Rs. 8,000 crore (US$ 908.9 million) in private and institutional investments.

4. Job Creation – Around 70,000 direct and indirect jobs will be generated across recycling facilities, logistics, and allied sectors.

5. Environmental Gains – Reduction in landfill waste, better e-waste management, and lower carbon footprint through resource recovery.

Strategic Benefits for India

1. Supply Chain Resilience: With global supply chains facing uncertainty due to geopolitical tensions, India’s recycling initiative offers a buffer against mineral shortages.

2. Green Economy Push: The scheme aligns with India’s climate goals, especially in areas such as EV adoption, renewable energy, and decarbonization.

3. Boost to Startups: By allocating funds specifically for small and new recyclers, the scheme promotes entrepreneurship and technological innovation.

4. Import Substitution: Recovering minerals domestically reduces foreign exchange outflows and strengthens India’s trade balance.

5. Alignment with Global Practices: Advanced economies like the EU, Japan, and the US are also investing heavily in critical mineral recycling. India’s scheme positions it as a competitive player in this space.

Challenges and Considerations

While the scheme is ambitious, several challenges need to be addressed:

• Technology Barriers: Recycling technologies for extracting high-purity minerals are capital-intensive and still developing.

• Collection Systems: Effective collection of e-waste, used batteries, and scrapped vehicles will be critical for feedstock supply.

• Regulatory Oversight: Strong compliance and monitoring mechanisms are needed to prevent environmental hazards from improper recycling practices.

• Awareness Among Consumers: Incentivizing individuals and businesses to deposit e-waste and end-of-life products is key to building a strong recycling ecosystem.

Global Comparisons

• European Union: The EU has mandated high recovery targets for batteries and electronic waste, with subsidies for recycling infrastructure.

• United States: The Inflation Reduction Act includes incentives for battery recycling to secure supply chains.

• China: As the largest EV market, China already has significant recycling capacity and policies that require manufacturers to take back old batteries.

India’s scheme follows these global trends while adapting to local conditions, making it a strategically timed intervention.

Conclusion

The Cabinet’s decision to approve the Rs. 1,500 crore critical mineral recycling scheme marks a significant step in strengthening India’s resource security, green economy ambitions, and job creation agenda. With structured incentives, the program is expected to catalyze investment, innovation, and sustainable practices in recycling.

If executed effectively, this initiative will not only help bridge India’s critical mineral supply gap but also contribute to the global fight against climate change by creating a robust circular economy framework.

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