Critical mineral recycling push: Cabinet clears Rs 1,500 crore incentive scheme; aims for 40k tonnes output

In a major step to boost domestic supply chain resilience, the Union Cabinet on Wednesday approved a Rs 1,500 crore incentive scheme to promote recycling of e-waste and battery waste for extraction of critical minerals.The scheme, which is part of the National Critical Mineral Mission (NCMM), will run for six years from FY 2025-26 to FY 2030-31. It is designed to support both established recyclers and new entrants, including start-ups, with one-third of the outlay earmarked for smaller players.“The Union Cabinet approved a Rs 1,500 crore Incentive Scheme to develop recycling capacity in the country for the separation and production of critical minerals from secondary sources,” the release stated.The government explained that since the critical mineral value chain — from exploration to operationalization of mines and overseas acquisitions — has long gestation periods, recycling offers a “prudent way to ensure supply chain sustainability in the near term.”Eligible feedstock under the scheme includes e-waste, lithium-ion battery (LIB) scrap, and other industrial scrap such as catalytic converters in end-of-life vehicles.

Incentives will be provided for investments in new units, as well as for expansion, modernisation and diversification of existing facilities.The scheme will provide two forms of incentives-- a 20% capex subsidy on plant and machinery for units beginning production within the prescribed time frame, and an opex subsidy linked to incremental sales. The opex support will be staggered — 40% in the second year and the remaining 60% in the fifth year, subject to specified thresholds. “Total incentive (Capex plus Opex subsidy) per entity will be subject to an overall ceiling of Rs 50 crore for large entities and Rs 25 crore for small entities,” the statement said.Incentives will be offered through a 20% capital expenditure subsidy on plant and machinery, equipment, and utilities, along with operational subsidies linked to incremental sales. According to the government, the scheme is expected to build at least 270 kilo tonnes of annual recycling capacity, resulting in about 40 kilo tonnes of critical mineral production. It is also projected to bring in Rs 8,000 crore of investment and generate nearly 70,000 direct and indirect jobs.