The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has approved an ambitious ₹1,500 crore incentive scheme aimed at strengthening India’s critical mineral recycling infrastructure. This initiative forms a key part of the National Critical Mineral Mission (NCMM) and is designed to promote the separation and production of critical minerals from secondary sources.
Strengthening Domestic Capacity and Supply Chain Resilience
India’s critical mineral value chain—covering exploration, auctions, operationalization of mines, and foreign asset acquisition—typically involves a long gestation period before becoming operational. To address immediate supply chain demands, the government has opted for a prudent and sustainable approach: recycling critical minerals from secondary sources such as e-waste and end-of-life products.
As per PMIndia News, this initiative will play a pivotal role in reducing dependency on imports while promoting self-reliance in essential technologies like clean energy, electric mobility, and electronics.
Scheme Duration and Eligible Feedstock
The scheme will run for six years, from FY 2025–26 to FY 2030–31. It targets three categories of recyclable materials:
- E-waste
- Lithium-Ion Battery (LIB) scrap
- Other scrap, such as catalytic converters from end-of-life vehicles
Both large, established recyclers and smaller or new entrants, including start-ups, will benefit from the scheme. In fact, one-third of the total outlay is earmarked specifically for small-scale entities.
Incentives Offered: Capex and Opex Support
The government will offer two types of financial incentives under the scheme:
- Capital Expenditure (Capex) Subsidy
- 20% subsidy on plant, machinery, equipment, and utilities
- Applicable to both new units and existing units undergoing expansion, modernization, or diversification
- A reduced subsidy will apply if production begins beyond the stipulated timeframe
- Operational Expenditure (Opex) Subsidy
- Based on incremental sales over the base year (FY 2025–26)
- 40% of eligible Opex in the second year (FY 2026–27)
- Remaining 60% in the fifth year (FY 2030–31), upon meeting specified sales thresholds
To ensure broad participation, the total incentive per entity is capped:
- ₹50 crore for large entities (including a ₹10 crore cap on Opex subsidy)
- ₹25 crore for small entities (with a ₹5 crore Opex subsidy cap)
Projected Outcomes: Capacity, Investment, and Jobs
The government expects this scheme to yield significant economic and environmental benefits, including:
- Development of 270 kilotonnes of annual recycling capacity
- Production of 40 kilotonnes of critical minerals annually
- Mobilization of approximately ₹8,000 crore in investment
- Creation of around 70,000 direct and indirect jobs
Before finalizing the scheme, the government held extensive consultations with industry stakeholders, conducting meetings, seminars, and feedback sessions to align with practical needs and challenges.
Conclusion
By approving this forward-looking incentive scheme, the Indian government is taking a decisive step toward building a circular economy for critical minerals. This effort not only addresses short-term supply constraints but also aligns with India’s long-term strategic vision for clean energy and technological self-sufficiency.
