Incentive Scheme for Promotion of Critical Mineral Recycling

The Ministry of Mines has recently approved 58 companies under the Incentive Scheme for Promotion of Critical Mineral Recycling, marking an important step towards strengthening India’s domestic critical mineral supply chain. The scheme is designed to reduce import dependence by promoting recycling-based recovery of critical minerals from secondary sources such as e-waste and battery scrap.

About the Scheme

The Incentive Scheme for Promotion of Critical Mineral Recycling is a key component of the broader National Critical Mineral Mission, which aims to enhance India’s self-reliance in critical minerals and build a resilient supply chain for strategic sectors such as clean energy, electronics, and defence.

The scheme will operate for a period of six years from FY 2025–26 to FY 2030–31, reflecting a medium-term policy commitment to developing a domestic recycling ecosystem for critical minerals.

Key Features of the Scheme

The scheme focuses on promoting the recycling of materials such as e-waste, lithium-ion battery scrap, and other mineral-bearing scrap streams. By targeting these secondary sources, it aims to extract valuable critical minerals that are essential for energy transition technologies.

It is designed to benefit both large established recyclers and small or emerging players, including start-ups, with one-third of the total scheme outlay specifically reserved for smaller participants. This inclusive structure is intended to promote broad-based industrial participation and innovation in recycling technologies.

The scheme is applicable not only to new recycling units but also to the expansion, modernization, and diversification of existing facilities, thereby encouraging capacity enhancement across the sector.

Importantly, the incentive framework focuses on the actual extraction of critical minerals, rather than merely supporting intermediate processes such as black mass production, ensuring that value addition remains within India’s domestic ecosystem.

Incentive Structure

The scheme provides a combination of capital and operational support to eligible entities. A 20% capital subsidy on plant and machinery is offered for projects that commence production within the stipulated timeline, thereby reducing upfront investment burdens.

In addition, an operational subsidy linked to incremental sales is provided to ensure sustained performance. This support is released in phases, with 40% disbursed in the second year and 60% in the fifth year, subject to the achievement of defined sales thresholds.

To maintain fiscal discipline and ensure equitable distribution, the incentives are capped at ₹50 crore for large entities and ₹25 crore for small entities, while operational subsidy limits are fixed at ₹10 crore and ₹5 crore respectively.

Significance for India

The scheme is strategically important as it strengthens India’s circular economy framework and reduces dependence on imports of critical raw materials. By promoting recycling, it supports the objectives of the energy transition, especially in sectors such as electric mobility, renewable energy storage, and electronics manufacturing.

It also enhances resource efficiency, environmental sustainability, and waste management, while simultaneously fostering domestic industrial growth and employment generation in the recycling sector.

Conclusion

The Incentive Scheme for Promotion of Critical Mineral Recycling represents a forward-looking policy intervention aimed at building a self-reliant and sustainable critical mineral ecosystem in India. By integrating financial incentives, private sector participation, and circular economy principles, the scheme is expected to significantly strengthen India’s strategic resource security and green transition goals.