Focus on Recycling Secondary Sources
Given the long gestation period of exploration and mining projects, the government considers recycling secondary sources a prudent near-term solution. Eligible feedstock under the scheme includes e-waste, lithium-ion battery (LIB) scrap, and other industrial scrap such as catalytic converters from end-of-life vehicles.
Both established recyclers and new entrants, including start-ups, will benefit. Notably, one-third of the scheme’s outlay is reserved for small and emerging recyclers to encourage broader participation in the recycling ecosystem.
Incentive Structure
The scheme offers both capital expenditure (Capex) and operational expenditure (Opex) incentives. Recyclers starting production within the specified timeframe will receive a 20% Capex subsidy on plant and machinery. Additionally, Opex incentives will be provided as a percentage of incremental sales beyond FY 2025-26 baseline levels.
These Opex subsidies will be staggered — 40% in the second year and the remaining 60% in the fifth year — ensuring gradual scaling of operations. Large entities can avail incentives up to ₹50 crore, while small entities have a cap of ₹25 crore, with further ceilings on Opex support.
Expected Outcomes
The government estimates the scheme will help develop at least 270 kilo tonnes of annual recycling capacity, translating into around 40 kilo tonnes of critical mineral production. This is expected to attract investments worth ₹8,000 crore and generate nearly 70,000 direct and indirect jobs.
Officials emphasized that the scheme targets the actual extraction of critical minerals rather than intermediate products like black mass. The approach ensures that recycling directly contributes to the supply chain of critical materials for industries.
Industry Consultations
The policy was shaped after multiple consultations with industry representatives, academics, and stakeholders through dedicated seminars and workshops. According to government officials, these discussions helped fine-tune incentive structures and address concerns raised by recyclers.
With the approval of this scheme, India takes a significant step toward reducing import dependence for vital minerals while supporting sustainable practices. Experts believe it aligns with India’s broader climate goals and clean energy roadmap.
