The Ministry of Mines’ Rs. 1,500 crore Critical Mineral Recycling Incentive Scheme aims to recover key minerals from e-waste, lithium-ion batteries, and other scrap, boosting India’s supply of lithium, cobalt, nickel, rare earths, and platinum group metals. Running from FY26 to FY31, the scheme offers Capex and Opex support to large recyclers and start-ups, targeting 270 kilo tonnes of annual recycling capacity, 40 kilo tonnes of mineral output, Rs. 8,000 crore in investment, and 70,000 jobs.
The Ministry of Mines has released comprehensive guidelines for the Critical Mineral Recycling Incentive Scheme, aimed at recovering valuable minerals from waste such as e-waste, spent lithium-ion batteries, permanent magnets, catalytic converters, and alloy scraps. Announced on September 8, 2025, under the National Critical Minerals Mission, this Rs. 1,500 crore initiative is designed to help India secure critical minerals including lithium, cobalt, nickel, rare earth elements, and platinum group metals.
According to the guidelines, the scheme will benefit recyclers of secondary products engaged in the recovery of these minerals. Beneficiaries will be classified into two groups based on their global manufacturing revenue. Group A will comprise large, established recyclers with revenues of at least Rs. 200 crore. They will be required to invest a minimum of Rs. 100 crore and establish facilities with an annual capacity of 10,000 tonnes. Group B will include smaller recyclers and startups with revenues below Rs. 200 crore, requiring an investment of at least Rs. 25 crore and facilities with a capacity of 5,000 tonnes per year.
The scheme allocates a total of Rs. 1,485 crore, with Rs. 700 crore earmarked for lithium-ion battery recycling, Rs. 650 crore for e-waste recycling, and Rs. 135 crore for other waste streams. Of the total, Group A will be eligible for incentives of up to Rs. 990 crore, while Group B will receive up to Rs. 495 crore, with provisions allowing for the reallocation of unused funds between groups.
The incentives will be provided in two formats—capital expenditure (Capex) subsidies and operational expenditure (Opex) support. Capex subsidies will range between 14% and 20%, depending on how quickly projects commence production after obtaining environmental clearance. Opex incentives will be tied to incremental sales, with 40% disbursed in the second year and 60% in the fifth year. Group A recyclers must achieve sales of Rs. 60 crore in year two and Rs. 150 crore in year five, whereas Group B recyclers must reach Rs. 30 crore and Rs. 75 crore, respectively. The incentives will be capped at Rs. 50 crore for Group A and Rs. 25 crore for Group B.
The scheme aims to strengthen India’s supply security of critical minerals, foster innovation, support startups, and position India as a hub for sustainable recycling technologies. These minerals are essential for clean energy, electric mobility, electronics, and advanced manufacturing but are concentrated in a few regions globally, creating significant supply risks. By promoting recycling and recovery from secondary sources, the government intends to reduce import dependence and develop a circular economy for high-value materials.
The scheme’s incentives are projected to establish at least 270 kilo tonnes of annual recycling capacity, resulting in approximately 40 kilo tonnes of annual critical mineral production, attracting about Rs 8,000 crore of investment and generating close to 70,000 direct and indirect jobs.
Before formulating the scheme, several rounds of consultations with industry and other stakeholders were conducted through dedicated meetings, seminar sessions, and similar engagements, the statement said.
The scheme will span a tenure of six years from FY26 to FY31. Eligible feedstock will include e-waste, Lithium Ion Battery (LIB) scrap, and scrap other than e-waste and LIB scrap, such as catalytic converters from end-of-life vehicles. Expected beneficiaries will comprise both large, established recyclers and small, new recyclers (including start-ups), for whom one-third of the scheme outlay has been earmarked. The scheme will apply to investments in new units as well as expansion of capacity/modernisation and diversification of existing units. It will provide incentives for the recycling value chain engaged in the actual extraction of critical minerals, and not for the value chain involved solely in black mass production.
This scheme will support the recycling of e-waste, LIB scrap, and catalytic converters from end-of-life vehicles. “It will provide targeted incentives to both large recyclers and emerging start-ups, fostering innovation, modernisation, and capacity expansion across the recycling ecosystem,” Union Minister for Heavy Industries and Steel H D Kumaraswamy said in an official statement.
The China Factor
The Critical Mineral Recycling Incentive Scheme has emerged in response to China’s export restrictions announced on April 4, which targeted seven medium and heavy rare earth elements — samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium — disrupting the supply chain for permanent magnets. China controls around 60–70% of global production and over 85–90% of refining capacity, securing a dominant position across the entire rare earth supply chain, from extraction to the manufacture of high-performance magnets.
Although China later eased export curbs for India, the move served as a wake-up call globally, and for India in particular, to build a stable domestic supply chain. This urgency has especially affected electric vehicle (EV) manufacturers, who have been prompted to seek alternatives. India’s current requirement for magnets stands at 5,000–6,000 tonnes annually, a demand projected to rise due to growth in sectors such as wind energy, robotics, drones, and the automotive industry.
While India possesses significant deposits of rare earth elements, it lacks the technology and capacity for mining, processing, and refining them. Moreover, environmental and regulatory challenges exist in some regions such as Rajasthan and along the western coast. Building a supply chain to meet domestic needs will take considerable time, prompting India to explore solutions through localisation and industry incentives.
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FAQs
Q1. What is the Critical Mineral Recycling Incentive Scheme 2025?
The government’s ₹1,500 crore initiative to recover lithium, cobalt, nickel, rare earths, and platinum group metals from e-waste, spent lithium-ion batteries, and industrial scrap.
Q2. Who can apply for the scheme?
Large recyclers (₹200+ crore revenue) and smaller recyclers/startups (<₹200 crore revenue) meeting investment and capacity criteria.
Q3. What types of waste are eligible?
E-waste, lithium-ion battery scrap, catalytic converters, and other industrial scrap.
Q4. What incentives are offered?
Capex subsidies of 14–20% and Opex support linked to sales, with caps of ₹50 crore for large recyclers and ₹25 crore for small recyclers.
Q5. Why is the scheme important?
It reduces dependence on imports, supports clean energy and EV sectors, and strengthens India’s supply of critical minerals.
