New Delhi:
The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, approved a Rs.1,500 crore Incentive Scheme to expand India’s recycling capacity for critical minerals on 3 September 2025. This move is designed to ensure domestic supply chain resilience in critical minerals while supporting the National Critical Mineral Mission (NCMM).
The critical mineral value chain—from exploration and auction to mining and acquisition of foreign assets—has long gestation periods before it can supply minerals to Indian industry. Recycling secondary sources, such as e-waste, lithium-ion battery scrap, and end-of-life vehicle components, provides an immediate and sustainable solution to meet domestic demand.
The six-year scheme (FY 2025-26 to FY 2030-31) will incentivize:
- New recycling units
- Capacity expansion, modernization, or diversification of existing units
- Extraction of critical minerals, not just black mass production
Eligible beneficiaries include large, established recyclers and small recyclers/startups, with one-third of the total outlay earmarked for small and new players.
Incentives under the scheme include:
- Capex subsidy: 20% on plant, machinery, equipment, and associated utilities for production within the specified timeframe. Delayed production attracts a reduced subsidy.
- Opex subsidy: Incentive on incremental sales over FY 2025-26 base year, distributed as 40% in the 2nd year and 60% in the 5th year, contingent on meeting threshold sales.
- Ceilings per entity: Total incentive capped at Rs.50 crore for large entities and Rs.25 crore for small entities, with Opex subsidy ceilings of Rs.10 crore and Rs.5 crore respectively.
The scheme is expected to:
- Develop 270 kiloton annual recycling capacity
- Produce around 40 kiloton of critical minerals annually
- Attract Rs.8,000 crore in investment
- Generate approximately 70,000 direct and indirect jobs
Before finalizing the scheme, multiple rounds of industry consultations, seminars, and stakeholder meetings were conducted to ensure practical and inclusive policy design.
This initiative reflects India’s growing focus on sustainable resource management, domestic manufacturing self-reliance, and creating an ecosystem for innovative startups in critical mineral recycling.