Cabinet clears ₹1,500 crore scheme to boost critical mineral recycling and strengthen supply chain resilience

THEBUSINESSBYTES BUREAU

NEW DELHI, SEPTEMBER 3, 2025

In a landmark move to secure India’s critical mineral supply chain, the Union Cabinet chaired by Prime Minister Narendra Modi today approved a ₹1,500 crore Incentive Scheme for the development of recycling capacity in the country. The initiative is designed to extract essential minerals from secondary sources such as e-waste, lithium-ion battery (LIB) scrap, and other industrial residues, reducing dependence on imports and strengthening domestic supply resilience.

The scheme, a key component of the National Critical Mineral Mission (NCMM), recognizes the long gestation period of primary exploration, auctions, and mining projects. Recycling from secondary sources has been identified as the most prudent near-term solution to ensure sustainability in the critical mineral value chain.

The programme will run for six years, from FY 2025-26 to FY 2030-31, targeting both large established recyclers and smaller new entrants, including start-ups. One-third of the outlay has been earmarked exclusively for emerging players. Investments in both greenfield projects and expansion or modernization of existing units will qualify for incentives. However, the benefits will focus strictly on the extraction of critical minerals, excluding black mass production alone.

The incentives include a 20% capital expenditure subsidy on eligible plant and machinery for those commencing production within specified timelines, along with operating expenditure support. The Opex subsidy will be structured on incremental sales achieved over the base year (FY 2025-26), disbursed as 40% in the second year and the balance 60% in the fifth year. To ensure wider participation, subsidies per entity will be capped at ₹50 crore for large recyclers and ₹25 crore for smaller ones, with separate ceilings for Opex support.

According to government estimates, the scheme will create at least 270 kilo tonnes of annual recycling capacity, leading to around 40 kilo tonnes of critical mineral output. This is expected to mobilize investments worth ₹8,000 crore and generate nearly 70,000 direct and indirect jobs across the sector.

Officials said the scheme was finalized after several rounds of consultations with industry stakeholders, seminars, and dedicated meetings. By integrating recycling into the broader National Critical Mineral Mission, the government aims not only to accelerate India’s green transition but also to establish a competitive edge in securing critical raw materials essential for advanced manufacturing and clean energy technologies.