A critical mission: Recycling critical minerals can offer near-term cushion

The Union Cabinet’s approval of a ₹1,500 crore incentive scheme to build recycling capacity for critical minerals marks a forward-looking and well-timed intervention in India’s resource security strategy. Envisaged under the National Critical Minerals Mission (NCMM), the scheme, running from 2025-26 to 2030-31, aims to recover valuable minerals from secondary sources such as ewaste, lithium-ion battery scrap, and catalytic converters in end-of-life vehicles. The importance of this initiative cannot be overstated. Critical minerals like lithium, cobalt, nickel, and rare-earth elements form the backbone of clean-energy technologies, advanced electronics, defence applications, and high-end manufacturing. Yet, the country remains overwhelmingly dependent on imports. Recognising this vulnerability, the government has identified 30 critical minerals and rolled out a multipronged strategy, spanning domestic exploration, auctioning new mineral blocks, acquiring assets abroad, and, now, large-scale recycling.

 

What makes recycling particularly urgent is the long gestation period associated with mining and exploration. Setting up mines, whether at home or overseas, takes years before they yield usable output. Recycling, on the other hand, offers an immediate, sustainable pathway to supplement supply chains while also addressing the mounting problem of electronic and battery waste. The new scheme, with a judicious mix of capital and operational subsidies, is designed to attract both established recyclers and startups, while capping per-entity incentives to ensure wide participation. This includes a 20 per cent capex subsidy on plant and machinery, equipment and associated utilities for starting production and a subsidy on operating expenses, which will be an incentive on incremental sales over the base year 2025-26. A third of the outlay has been earmarked specifically for smaller players, making space for innovation-driven enterprises.

 

The potential benefits are significant. The scheme is expected to create at least 270 kilo tonnes of annual recycling capacity, yielding around 40 kilo tonnes of critical minerals each year. This in turn could mobilise nearly ₹8,000 crore in private investment and generate close to 70,000 direct and indirect jobs. However, recycling remains just one part of the multipronged strategy. Domestic production through exploration and auction of mineral blocks, particularly in states such as Andhra Pradesh, Rajasthan, and Jharkhand, remains critical for building long-term self-reliance. Simultaneously, the role of Khanij Bidesh India Ltd (KABIL), the state-backed joint venture tasked with securing mineral assets abroad, must be strengthened. From prospecting for lithium in Argentina and cobalt in Africa to rare earths elsewhere, KABIL is working towards diversifying supply risks. The road ahead will demand close coordination with industry, research institutions, and state governments. Incentives must be matched with effective regulation to ensure safe, environmentally sound recycling practices. Given the rapid technological changes in battery chemistry and electronic design, investment in research & development will be crucial to keep extraction processes efficient and globally competitive. To be fair, recycling critical minerals is no silver bullet. But securing critical minerals by coupling mineral security with green goals is the key to India’s clean-energy transition, digital future, and strategic autonomy.