Cabinet clears ₹1,500 cr scheme to promote critical mineral recycling

The Union Cabinet has approved a Rs 1,500 crore scheme under the National Critical Mineral Mission to promote recycling of e-waste and batteries for mineral recovery

The Union Cabinet on Wednesday approved a ₹1,500 crore incentive scheme to promote recycling of e-waste and battery waste for the extraction of critical minerals, a move aimed at strengthening India’s supply chain resilience in the sector.

 

The scheme, which falls under the National Critical Mineral Mission (NCMM), will run for six years from 2025-26 to 2030-31. The scheme is designed to serve as a near-term solution until mining and exploration projects for critical minerals begin to yield results. Mining operations typically have long gestation periods, while recycling of secondary sources offers a quicker way to secure raw materials for industry, the Ministry of Mines said in a statement.

 

The eligible feedstock under the scheme includes e-waste, lithium-ion battery (LIB) scrap, and other categories such as catalytic converters from end-of-life vehicles. Both large, established recyclers and smaller players, including start-ups, are expected to benefit. One-third of the overall financial outlay has been earmarked specifically for small and new recyclers, including startups.

 

Incentives will be offered in the form of a 20 per cent capital subsidy on plant, machinery, equipment, and associated utilities for units starting production within the specified timeframe. A delay in meeting timelines will attract a lower subsidy. In addition, an operating expense subsidy will be provided, linked to incremental sales over the base year (2025-26).

 

This subsidy will be disbursed in two parts. 40 per cent of the eligible amount in the second year and the remaining 60 per cent in the fifth year from 2026-27 to 2030-31, subject to achieving specified sales thresholds.

 

To ensure a greater number of beneficiaries, the total incentive per entity will be capped at ₹50 crore for large units and ₹25 crore for small units. Within this limit, the maximum operating expense subsidy will be ₹10 crore and ₹5 crore, respectively. The scheme will support both new recycling units as well as expansion, modernisation, and diversification of existing units.

 

The government expects the incentives to create at least 270 kilo tons of annual recycling capacity, resulting in about 40 kilo tons of critical mineral production. The scheme is projected to bring in ₹8,000 crore worth of investment and generate close to 70,000 direct and indirect jobs.