India: Govt launches incentive scheme to boost critical minerals recycling

• Scheme aims to build domestic critical minerals capacity, cut import dependence & bridge recycling gaps

The Government has announced a INR 1,500 crore Incentive Scheme to promote critical minerals recycling.

The Narendra Modi Government has already taken a series of measures to strengthen India’s resilience in this sector, beginning with the identification of critical and strategic minerals, the amendment of the Mines Act to list them separately, and the establishment of a National Critical Mineral Mission.

Recycling and urban mining-where critical minerals are retrieved from e-waste, Lithium-ion Battery (LIB) scrap, and other scrap such as catalytic converters in end-of-life vehicles-are an additional means to boost India’s domestic supply.

Under this INR 1,500 crore Incentive Scheme, for the next 6 years, (from FY 2025-26 to FY 2030-31) large and small and new registered recyclers can avail up to INR 50 crore (for large) and INR 25 crore (for small entities). A third of the scheme’s outlay has been reserved for new recyclers, including start-ups. The government recognises as large any recycler with a global manufacturing revenue (or GMR) or INR 200 crore and small as anyone with a GMR less than that.

The scheme, which will run for six years from FY 2025-26 to FY 2030-31, will extend subsidy for both capital expenditure and operational expenditure to large and small, as well as new recyclers. Notably, one-third of the scheme’s outlay has been earmarked specifically for new recyclers or start-ups, in order to encourage fresh capacity building.

Large recyclers, defined as those with a global manufacturing revenue (GMR) of INR 200 crore or more, can access incentives of up to INR 50 crore, while smaller entities with less than INR 200 crore GMR, including start-ups, will be eligible for up to INR 25 crore.

A subsidy of up to 20% on capex, covering plant and machinery, equipment and associated utilities, will be available for those who start production within a specified timeframe, after which the subsidy will taper down. An operational expenditure subsidy, capped at INR 10 crore for large recyclers and INR 5 crore for small ones, is being offered linked to incremental sales over the base year of FY 2025-26. Forty percent of the eligible subsidy will be payable in the second year and the balance 60% in the 5th year, provided the specified threshold for incremental sales is achieved.

As of 9 February 2025, India has 322 registered e-waste recyclers, with a combined processing capacity of 2.2 million tonnes. However, most of this activity involves only collection, dismantling, shredding, crushing, and sorting, with very limited actual extraction of minerals. The Government says there are currently only about 10 to 12 recyclers engaged in extraction of actual metal, with a combined capacity of roughly 100 kilo tonnes per annum. With the launch of the new scheme, the Government hopes to transform this scenario and create a far stronger domestic capacity for critical mineral recovery.