The Union Cabinet has approved a Rs 1,500 crore incentive scheme aimed at developing domestic recycling capacity for critical minerals sourced from secondary materials. The scheme is part of the National Critical Mineral Mission and is designed to enhance supply chain resilience and reduce dependence on primary extraction.
The scheme will run for six years from FY 2025–26 to FY 2030–31 and targets feedstock including e-waste, lithium-ion battery scrap, and other scrap such as catalytic converters from end-of-life vehicles. It will support both large and small recyclers, including startups, with one-third of the outlay earmarked for smaller entities.
Incentives will be provided for new units and for expansion, modernisation, or diversification of existing facilities. The scheme focuses on the actual extraction of critical minerals rather than preliminary processing. It includes a 20 percent capital expenditure subsidy on plant, machinery, and utilities for units starting production within the specified timeframe. Operational expenditure subsidies will be offered on incremental sales over the base year, with 40 percent disbursed in the second year and the remaining 60 percent in the fifth year, subject to performance thresholds.
The total incentive per entity is capped at Rs 50 crore for large units and Rs 25 crore for small units, with a ceiling of Rs 10 crore and Rs 5 crore respectively for operational subsidies.
The scheme is expected to create 270 kilotonnes of annual recycling capacity, yielding around 40 kilotonnes of critical mineral output. It is projected to attract Rs 8,000 crore in investment and generate approximately 70,000 direct and indirect jobs. The formulation of the scheme followed extensive consultations with industry stakeholders.
