Union Cabinet Clears Rs 1,500 Cr Incentive Scheme to Boost Critical Mineral Recycling

In a major push towards strengthening India’s mineral security, the Prime Minister Narendra Modi-led Union Cabinet on Wednesday approved a ₹1,500 crore incentive scheme aimed at ramping up the country’s recycling capacity for critical minerals.

The initiative, launched under the National Critical Mineral Mission (NCMM), is designed to secure essential resources such as lithium, cobalt, and nickel by tapping secondary sources like e-waste, lithium-ion battery scrap, and catalytic converters from end-of-life vehicles. The government believes recycling offers the fastest route to reduce import dependence, even as new mining projects and overseas acquisitions remain long-term solutions.

Scheme Highlights

The scheme will run for six years, from FY2025-26 to FY2030-31, and will cover both new recycling units and the modernization of existing ones. Importantly, one-third of the total outlay has been earmarked for small firms and start-ups, ensuring wider participation in the emerging sector.

The support is targeted specifically at recyclers engaged in extracting critical minerals, not just producing intermediate outputs like black mass.

Incentive Structure

•    Capex subsidy: 20% subsidy on plant, machinery, and utilities for units commencing production within a defined timeline. Delays will reduce the subsidy.
•    Opex subsidy: Firms can claim 40% of eligible operating expenses in the second year and up to 60% in the fifth year, provided they meet incremental sales thresholds over the FY2025-26 base year.
•    Ceilings: Large firms can avail up to ₹50 crore in support, while smaller entities are capped at ₹25 crore. The maximum Opex support has been fixed at ₹10 crore and ₹5 crore respectively.

Expected Outcomes

The government estimates that the scheme will add 270 kilo tonne of recycling capacity annually and yield nearly 40 kilo tonne of critical minerals each year. It is also projected to draw ₹8,000 crore in private investment and create nearly 70,000 direct and indirect jobs across the sector.

Officials said the move will not only strengthen supply chain resilience but also support India’s clean energy transition by ensuring reliable access to critical resources needed for batteries, electronics, and renewable technologies.

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