Introduction
The Union Cabinet approved an INR 1,500 crore Incentive Scheme for critical mineral recycling under the National Critical Mineral Mission. The initiative aims to promote end-to-end recycling and secure India’s supply of strategic minerals.
Following the Cabinet decision, the Ministry of Mines issued detailed guidelines after stakeholder consultations. The rapid rollout signals the government’s push toward a circular economy for clean energy and advanced manufacturing.
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Scheme Framework and Implementation
The scheme incentivises recycling of key feedstocks - e-waste, spent lithium-ion batteries (LIBs), and catalytic converters from end-of-life vehicles - to recover embedded critical minerals.
Incentives will apply only to recyclers involved in recovering minerals, not those stopping at black-mass processing. The approach aims to draw dismantlers, crushers, and shredders into the formal chain and ensure value creation within India. To widen participation, incentives are capped at INR 50 crore for large recyclers and INR 25 crore for smaller ones.
Feedstock Availability and Ecosystem Integration
India generates about 1.75 million tonnes of e-waste and 60 kilotonnes of spent lithium-ion batteries annually - volumes set to rise sharply over the next few years. Duty-free import of LIB scrap, announced in the 2025–26 Budget, will help meet growing feedstock demand.
Feedstock collection is being strengthened through Extended Producer Responsibility (EPR) rules for e-waste and batteries, which mandate the recovery of specified materials. However, domestic capacity to process black mass or powder remains limited, leading to exports of semi-processed waste without mineral recovery.
By incentivising the recycling chain, focused on metal extraction, the scheme aims to formalise and expand the ecosystem, drawing more private recyclers into the regulated network and enabling full recovery of valuable critical minerals.
India’s Readiness for Critical Mineral Extraction from Recycling
- Technology and R&D: India’s INR 1,500 crore Critical Mineral Recycling Scheme signals a transition toward a closed-loop resource economy. The country already has domestic recycling capability through IITs, CSIR, and R&D labs, but now needs to scale these capabilities from laboratory innovation to industrial application.
- Industry Participation and Capacity Building: The ecosystem remains narrow as a few R4 recyclers dominate, and black-mass exports still drain value. By incentivising actual metal recovery and improving participation, the scheme can expand formal recycling capacity and position India as a regional processing hub.
- Time-Risk: The next 3-5 years are critical. Competing nations are converging on recycling and clean-energy systems. India must make fast progress in AI-enabled recovery, traceable recycling systems, and scalable refining capacity to capture a strategic advantage
DhruvStar Industry Insights: What it Means for the Indian Industry
- Facilitate Market Visibility: Data sharing, by the Government, of clear estimates of e-waste and battery scrap availability will help investors and recyclers plan capacity.
- From Collection to Extraction: Recyclers and processors must prioritise end-to-end mineral recovery over black-mass production to capture true value.
- Technology Partnerships: Collaborations with IITs, CSIR labs, and R&D centres can accelerate process efficiency and ensure compliance.
- Integration: Formal linkages between dismantlers, crushers, and refiners will help create vertically integrated recycling chains.
India’s push for critical mineral recycling lays the foundation for a broader strategy on rare earth metals, where domestic value addition will define the next phase of resource security.
Sources
[1] PIB
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