India: Govt issues guidelines for critical mineral recycling incentive scheme

• Govt to incentivise e-waste, LIB, other scrap recycling
• Scheme to run for 6 fiscals with total outlay of nearly INR 1,500 cr

The government of India has issued operational guidelines for the Critical Mineral Recycling Incentive Scheme announced last month. The scheme aims to incentivise recycling of e-waste, lithium-ion batteries (LIB), and other scraps to produce critical minerals and their eligible compounds.

Target beneficiaries

Registered recyclers are classified into two groups based on their Global Manufacturing Revenue (GMR):

• Group A: Companies with revenue equal to or above INR 200 crore
• Group B: Companies with revenue below INR 200 crore, including start-ups

Eligible waste streams

Spent LIB (Lithium-ion Batteries) – Scrap of different advanced chemistry cell (ACC) mixes such as lithium iron phosphate (LFP), lithium nickel manganese cobalt oxide (NMC), lithium cobalt oxide (LCO), etc.

E-waste – E-waste as defined in the E-Waste (Management) Rules, 2022

Other waste – Permanent magnets from wind turbines, EVs, medical equipment; catalytic converters from end-of-life vehicles; spent catalysts from pharma and petrochemical industries; special/super alloy scraps containing critical minerals.

Eligibility criteria

Applicants making investments in greenfield or brownfield recycling facilities for recovery and extraction of critical minerals can apply. Foreign-owned companies registered in India are also eligible, subject to compliance with FDI Policy Circular 2020.

Only entities undertaking extraction of critical minerals through eligible processes—such as chemical processing, metallurgical extraction, R3 and R4 level recycling of LIB scrap, hydrometallurgy, pyrometallurgy, or electrometallurgy—qualify. Entities engaged solely in collection, dismantling, shredding, crushing, or sorting operations (for example, units producing only black mass from LIBs without further extraction) are not eligible.

Recyclers handling waste streams covered under Extended Producer Responsibility (EPR) must be registered with the Central Pollution Control Board (CPCB).

Scheme outlay and tenure

The scheme runs for six financial years from FY 2025-26 to FY 2030-31, with an indicative outlay as follows:

– Lithium-ion Battery (LIB) recycling – INR 700 cr
– E-waste recycling – INR 650 cr
– Other recycling – INR 135 cr

Allocation by beneficiary group:
– Group A – INR 990 cr
– Group B – INR 495 cr

For applicants commencing operations from black mass derived from spent LIBs, capacity thresholds are reduced by 50%. The black mass must be sourced from entities registered under the EPR framework in accordance with Battery Waste Management Rules, 2022.

Investment guidelines

Eligible investments include plant, machinery, equipment, associated utilities, and in-house R&D for recycling and refining. Expenditure on packaging, freight, insurance, erection, and commissioning is capped at 7.5% of base investment. Land and building costs are excluded. Refurbished equipment is allowed but cannot exceed 20% of eligible investment, and must have a minimum residual life of five years.

Application process

Applications can be submitted online through the Ministry of Mines website for the next six months. The application fee is INR 10,000 for Group B and INR 20,000 for Group A companies. The guidelines specify minimum metallic yield and purity requirements for each critical mineral, detailed in the scheme’s annexures.