The Union cabinet has approved a Rs1,500 crore incentive scheme to strengthen India’s recycling capacity for critical minerals, a sector dominated globally by China and vital for the clean energy transition.
The initiative, part of the National Critical Mineral Mission (NCMM), aims to secure domestic supply chains for rare earths, lithium, cobalt and other inputs essential to electric vehicles, batteries, electronics and renewable energy technologies. The mission is also aimed at reducing dependence on China.
Prime Minister Narendra Modi had earlier highlighted the strategic importance of the mission. “The Indian government is also aware of the shortage of rare earth magnets for the auto industry. To increase the capacity of the industry in this direction, we have also launched the National Critical Mineral Mission. Under this, more exploration missions will be conducted at different places in the country, and critical minerals will be discovered,” he said at a recent function.
The new cabinet-approved recycling scheme will run for six years, from FY 2025-26 to FY 2030-31. It seeks to reduce import dependence and build resilience by recovering minerals from e-waste, lithium-ion battery (LIB) scrap, and other end-of-life materials such as catalytic converters.
The government said the scheme would support both large established recyclers and smaller firms, including start-ups, with one-third of the outlay earmarked for the latter. It will cover new investments as well as the expansion, modernisation or diversification of existing recycling units.
Incentives will be offered in the form of a 20 per cent capital expenditure subsidy on plant, machinery and utilities, along with operating expenditure subsidies linked to incremental sales.
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To widen participation, benefits will be capped at Rs50 crore per large entity and Rs25 crore for smaller entities, with sub-limits on operating subsidies.
Officials estimate the scheme will help create at least 270 kilotonnes of annual recycling capacity, yielding around 40 kilotonnes of critical mineral production. It is expected to attract Rs8,000 crore in investment and generate nearly 70,000 direct and indirect jobs, the cabinet statement said. The framework, officials added, was finalised after multiple consultations with industry stakeholders.