Cabinet approves ₹1,500 crore incentive scheme to promote critical mineral recycling
The initiative will provide sustainable supply chains for lithium-ion batteries and other critical minerals that are essential for electric vehicles, advanced storage solutions and emerging technologies
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wakila
The Cabinet on Wednesday approved a ₹1,500 crore incentive scheme to develop recycling capacity for the separation and production of critical minerals from secondary sources. This scheme is part of the National Critical Mineral Mission (NCMM).
The critical mineral value chain comprising exploration, auction and mine operationalisation and acquisition of foreign assets has a gestation period before they could supply critical minerals to the industry.
“A prudent way to ensure supply chain sustainability in the near term is through the recycling of secondary sources,” said the Mines Ministry in a statement.
The incentive scheme will have a tenure of six years from FY26 to FY31. Eligible feedstock includes e-waste, Lithium Ion Battery (LIB) scrap, scrap other than e-waste, which . includes catalytic convertors in end-of-life vehicles.
Expected beneficiaries will be both large and established recyclers, as well as small, new recyclers (including start-ups) for whom one-third of the scheme outlay has been earmarked. The scheme will be applicable to investments in new units as well as expansion of capacity, modernisation and diversification of existing units.
“Aligned with the Ministry of Heavy Industries’ commitment to green mobility and clean energy, this initiative will provide sustainable supply chains for lithium-ion batteries and other critical minerals that are essential for electric vehicles, advanced storage solutions and emerging technologies,” said HD Kumaraswamy, Union Minister for Heavy Industries.
“It complements our broader push for EV adoption, PLI schemes and investments in future-ready industries, creating strong linkages between recycling, resource efficiency and the green mobility revolution,” he added.
Incentive Scheme
The scheme will provide incentive for the recycling value chain, which is involved in actual extraction of critical minerals.
The incentives under the scheme will comprise 20 per cent capex subsidy on plant & machinery, equipment and associated utilities for starting production within specified time-frame, beyond which reduced subsidy is applicable.
It will also have an opex subsidy, which will be an incentive on incremental sales over the base year (FY26) , that is 40 per cent of eligible opex subsidy in the 2nd year and balance 60 per cent in the 5th year from FY27 to FY31 on achievement of specified threshold incremental sales.
Total incentive (capex plus opex subsidy) per entity will be subject to an overall ceiling of ₹50 crore for large entities and ₹25 crore for small entities, within which there will be a ceiling for opex subsidy of ₹10 crore and ₹5 crore, respectively.
According to the Mines Ministry statement, the incentives are expected to develop at least 270 kilo tonne of annual recycling capacity, resulting in around 40 kilo tonne annual critical mineral production, bringing in about ₹8,000 crore of investment and creating close to 70,000 direct and indirect jobs.
Published on September 3, 2025
