India Eyes 40,000 Tonne Annual Critical Minerals Production Through Rs 1,500 Crore Recycling Push

The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday (3 September) approved a Rs 1,500 crore Incentive Scheme to boost India’s recycling capacity for the separation and production of critical minerals from secondary sources.

The scheme, part of the National Critical Mineral Mission (NCMM), is aimed at building domestic capacity and ensuring supply chain resilience in critical minerals that are vital for renewable energy, electric mobility, electronics, and defence.

While exploration, auctioning, mine operationalisation, and acquisition of foreign assets will take time before they can supply to industry, the government considers recycling of secondary sources a prudent way to ensure sustainability in the near term.

The scheme will run for six years from FY 2025-26 to FY 2030-31.

Eligible feedstock will include e-waste, lithium-ion battery scrap, and catalytic converters from end-of-life vehicles.

Beneficiaries will be both large recyclers and smaller new players, including start-ups, with one-third of the outlay reserved for the latter.

It will support new units as well as the modernisation and expansion of existing ones, but will apply only to the extraction of critical minerals, not preliminary black mass production.

The incentives will include a 20 per cent capital expenditure subsidy on plant and machinery, provided production begins within the stipulated timeframe, along with operational expenditure subsidies linked to incremental sales over the base year FY 2025-26.

Incentives will be capped at Rs 50 crore for large entities and Rs 25 crore for smaller players, with limits also placed on operational subsidies.

According to government estimates, the scheme is expected to create at least 270 kilo tonnes of annual recycling capacity, yielding around 40 kilo tonnes of critical mineral production each year.

It is projected to attract about Rs 8,000 crore in investment and generate nearly 70,000 direct and indirect jobs.

The Ministry of Mines said the framework was developed after consultations with industry and other stakeholders through dedicated meetings and seminars.

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