**Summary:**
The Union Cabinet approved a ₹1,500 crore (approximately $180 million USD) Incentive Scheme on September 3, 2025, to promote critical mineral recycling in India. The scheme aims to develop domestic recycling capacity for extracting critical minerals from secondary sources such as e-waste, lithium-ion battery (LIB) scrap, and other scrap materials like catalytic converters. This initiative is a component of the National Critical Mineral Mission (NCMM), designed to enhance domestic capacity and supply chain resilience for critical minerals.
The scheme will operate for six years, from FY 2025-26 to FY 2030-31, and targets both established and new recyclers, including startups, with one-third of the scheme's outlay earmarked for smaller entities. It supports investments in new units, capacity expansion, modernization, and diversification of existing units. Incentives are specifically for the recycling value chain involved in actual critical mineral extraction, not just black mass production.
The scheme offers two types of incentives: a 20% capital expenditure (Capex) subsidy on plant machinery, equipment, and associated utilities for timely project commencement and an operating expenditure (Opex) subsidy linked to incremental sales over the base year FY 2025-26 (40% in the second year and 60% in the fifth year, from FY 2026-27 to FY 2030-31) upon achieving specified sales thresholds.
To ensure broad participation, the total incentive (Capex plus Opex subsidy) is capped at ₹50 crore for large entities and ₹25 crore for small entities, with separate Opex subsidy ceilings of ₹10 crore and ₹5 crore, respectively.
The scheme is projected to create at least 270 kilotons of annual recycling capacity, yielding approximately 40 kilotons of annual critical mineral production. It is also expected to attract around ₹8,000 crore in investment and generate nearly 70,000 direct and indirect jobs. The scheme's formulation involved consultations with industry stakeholders through meetings and seminars.
Key Entities Referenced
Rs.1,500 crore Incentive Scheme: A financial incentive scheme by the Union Cabinet to promote critical mineral recycling in India.
Shri Narendra Modi: The Prime Minister of India, who chaired the Union Cabinet approving the incentive scheme.
National Critical Mineral Mission NCMM: A national mission aimed at building domestic capacity and supply chain resilience in critical minerals in India.
Lithium Ion Battery LIB: A type of rechargeable battery; scrap from these batteries is an eligible feedstock for recycling under the scheme.
FY 202526: Fiscal Year 2025-2026. The starting year for the Incentive Scheme.
FY 203031: Fiscal Year 2030-2031. The ending year for the Incentive Scheme.
Delhi: Location where the press release was issued.
PIB: Press Information Bureau
Cabinet
Cabinet approves Rs.1,500 crore Incentive Scheme
to promote Critical Mineral Recycling in the country
Scheme incentives to develop capacity to recycle
battery waste and e-waste for extraction of critical
minerals
Posted On: 03 SEP 2025 7:16PM by PIB Delhi
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi today 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.
This scheme is part of the National Critical Mineral Mission (NCMM), which is aimed at building the
domestic capacity of and supply chain resilience in critical minerals. The critical mineral value chain
comprising exploration, auction and mine operationalization, and acquisition of foreign assets, has a gestation
period before they could supply critical minerals to Indian industry. A prudent way to ensure supply chain
sustainability in the near term is through the recycling of secondary sources.
The Scheme will have a tenure of six years from FY 2025-26 to FY 2030-31. Eligible feedstock is e-waste,
Lithium Ion Battery (LIB) scrap, and scrap other than e-waste & LIB scrap e.g. catalytic convertors in end-of-
life vehicles. Expected beneficiaries will be both large, established recyclers, as well as small, new recyclers
(including start-ups), for whom one-third of the scheme outlay has been earmarked. The Scheme will be
applicable to investments in new units as well as expansion of capacity / modernization and diversification of
existing units. The Scheme will provide incentive for the recycling value chain which is involved in actual
extraction of critical minerals, and not the value chain involved in only black mass production.
The incentives under the Scheme will comprise 20% Capex subsidy on plant & machinery, equipment and
associated utilities for starting production within specified timeframe, beyond which reduced subsidy
applicable; and Opex subsidy, which will be an incentive on incremental sales over the base year (FY 2025-
26) viz. 40% of eligible Opex subsidy in the 2nd year and balance 60% in the 5th year from FY 2026-27 to
FY 2030-31 on achievement of specified threshold incremental sales. In order to ensure greater number of
beneficiaries, 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, within which there will be a ceiling for Opex
subsidy of Rs.10 crore and Rs.5 crore respectively.
In terms of key outcomes, the Scheme incentives are expected to develop at least 270 kilo ton of annual
recycling capacity resulting in around 40 kilo ton annual critical mineral production, bringing in about
Rs.8,000 crore of investment and creating close to 70,000 direct and indirect jobs. Several rounds of
consultations with industry and other stakeholders have been held through dedicated meetings, seminar
sessions, etc. before formulating the Scheme.
*****MJPS/BM
(Release ID: 2163454)