India Announces ₹1,500 Crore Scheme To Recycle Critical Minerals From Waste

The programme is designed to establish a minimum annual recycling capacity of 270 kilotones.

The Centre on Wednesday sanctioned a key ₹1,500 crore financial incentive scheme, in a bid to boost the nation's capability to recycle critical minerals from waste materials. This initiative focuses on building domestic infrastructure for extracting and processing critical minerals from secondary sources rather than primary mining operations. It is to be noted had imposed a ban on rare earth magnets in India which handed a setback to the country's rapidly growing electric vehicle (EV) sector.

Details Of the Scheme

The programme is designed to establish a minimum annual recycling capacity of 270 kilotones, which is projected to yield approximately 40 kilotonnes of critical minerals each year, according to a media release. This development is likely to attract around ₹8,000 crore in total investment while generating nearly 70,000 employment opportunities across direct and indirect sectors.

The initiative forms a key component of India's broader National Critical Mineral Mission, which has received approval for ₹16,300 crore with a comprehensive budget of ₹34,300 crore allocated over seven years. This mission's primary objective is to establish domestic self-sufficiency and strengthen supply chain security for strategic minerals.

Essential minerals including copper, lithium, nickel, cobalt, and rare earth elements serve as fundamental components for the rapidly expanding clean energy sector and associated technologies.

Scheme Duration

The programme will operate for six years, spanning from fiscal year 2026 through 2031. Financial support will target recycling operations that actually extract critical minerals, excluding those merely involved in black mass production processes.

"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," according to an official PIB statement.

The scheme covers investments in fresh facilities as well as capacity expansion, technological upgrades, and diversification of existing operations.

Incentive Structure

Expected beneficiaries include both established large-scale recycling companies and emerging small recyclers, including startup enterprises. One-third of the total scheme allocation has been specifically reserved for smaller entities.

The incentive framework consists of two main components:

Capital expenditure support: A 20% subsidy on plant machinery, equipment, and related infrastructure for operations commencing within designated timelines, with reduced subsidies applicable beyond specified periods.

Operational expenditure support: Performance-based incentives calculated on incremental sales beyond the baseline year (2025-26), offering 40% of eligible operational subsidies in the second year and the remaining 60% in the fifth year from 2026-27 through 2030-31, contingent on achieving specified sales thresholds.

To ensure broader participation, total incentives per entity are capped at ₹50 crore for large companies and ₹25 crore for smaller entities. Within these limits, operational subsidies are further restricted to ₹10 crore and ₹5 crore respectively.

Importance For Green Energy

The critical mineral supply chain, encompassing exploration, mining auctions, operational development, and international asset acquisition, typically requires extended timeframes before delivering materials to domestic industries. Recycling secondary sources presents an immediate and practical approach to maintaining supply chain stability in the short term while building long-term capacity.

This initiative represents India's commitment to reducing dependency on mineral imports while accelerating the transition toward sustainable energy systems and achieving greater strategic autonomy in critical material supply chains.