Cabinet Approves ₹1,500 Crore Incentive Scheme to Promote Critical Mineral Recycling

The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved an incentive scheme worth Rs 1,500 crore to boost recycling of critical minerals from secondary sources such as e-waste and battery scrap.

The scheme forms part of the National Critical Mineral Mission (NCMM), which is focused on strengthening domestic capacity and ensuring supply chain resilience in critical minerals. Since exploration, auctions, mining operations and acquisition of foreign assets require long gestation periods, recycling from secondary sources has been identified as a prudent way to meet near-term requirements.

The initiative will run for six years, from FY 2025-26 to FY 2030-31. Eligible feedstock under the scheme includes e-waste, lithium-ion battery (LIB) scrap, and other scrap materials such as catalytic converters in end-of-life vehicles. Beneficiaries will include both large established recyclers as well as smaller entities and start-ups, with one-third of the total outlay specifically earmarked for the latter. The scheme will support new units along with capacity expansion, modernisation and diversification of existing facilities.

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Incentives will be provided across the recycling value chain that involves the actual extraction of critical minerals, excluding those engaged only in black mass production. Support will include a 20% capital expenditure subsidy on plant, machinery and associated utilities for units commencing production within a defined timeline, with reduced subsidy applicable beyond it. Operational subsidies will also be available as incentives on incremental sales over the base year FY 2025-26 — 40% of eligible subsidy in the second year and the remaining 60% in the fifth year, from FY 2026-27 to FY 2030-31, subject to achieving the prescribed sales thresholds.

The overall incentive per entity will be capped at Rs 50 crore for large recyclers and Rs 25 crore for smaller players, with further ceilings of Rs 10 crore and Rs 5 crore respectively on operational subsidies.

The scheme is expected to develop at least 270 kilotonnes of annual recycling capacity, resulting in around 40 kilotonnes of annual critical mineral production. It is also projected to bring investments of nearly Rs 8,000 crore and create close to 70,000 direct and indirect jobs.

According to the government, the scheme was finalised after several rounds of consultations with industry representatives and stakeholders through dedicated meetings and seminars.