Critical Mineral Recycling Incentive Scheme (2025)

The Critical Mineral Recycling Incentive Scheme is a Government of India programme that pays part of the cost for companies that recover critical minerals from waste. Critical minerals are minerals like lithium, cobalt, nickel and rare earths that are needed for phones, electric vehicle batteries, solar panels and defence equipment, but whose supply is risky.

The scheme gives money to recyclers who take these minerals out of old electronics (e-waste), used lithium-ion batteries and other scrap. It was approved by the Union Cabinet on 3 September 2025 with an outlay of ₹1,500 crore, as part of the National Critical Mineral Mission (NCMM).

Why does India need it?

India has very small reserves of lithium, cobalt and nickel, so it imports most of what it needs, mainly from a few countries. The processing of these minerals is also concentrated in a few countries, especially China. If supply is cut off, India's electric-vehicle, electronics and clean-energy plans can stall. At the same time, India produces a huge amount of e-waste and used batteries every year.

Every old phone or battery holds small amounts of these valuable metals. Recycling turns this waste into a home-grown "mine". This idea is called urban mining.

Where did it come from?

The Union Budget for 2024-25 announced a National Critical Mineral Mission. The Union Cabinet approved the mission on 29 January 2025, with a government spending of ₹16,300 crore and an expected ₹18,000 crore investment by public sector companies, running till 2030-31. Recovering minerals from secondary sources (waste and scrap) was one of the mission's parts.

The recycling scheme was approved on 3 September 2025 to carry out this part. The Ministry of Mines released its guidelines in early October 2025 and invited applications until 1 April 2026.

How does the scheme work?

The scheme pays recyclers in two ways, which can be combined:

• Capex subsidy (help with building costs): The government pays 20% of what a recycler spends on plant, machinery, equipment and utilities. If production starts late, the rate is reduced (to about 17% or 14%). This rewards companies that finish projects on time.
• Opex subsidy (help with running costs): This is linked to extra sales compared with the base year 2025-26. It is paid in two parts: 40% in the second year and the remaining 60% in the fifth year, only if the company reaches set sales targets.

Think of it like a family getting help to open a small shop: one part of the help pays for the counter and shelves, and the other part comes later only if the shop actually starts selling more.

The key facts and numbers

• Tenure: six years, FY 2025-26 to FY 2030-31
• Outlay: ₹1,500 crore, run by the Ministry of Mines
• Eligible feedstock (raw material): e-waste, lithium-ion battery (LIB) scrap, and other scrap such as catalytic converters from end-of-life vehicles
• Who can apply: both large and small recyclers, including start-ups, for new plants or expanding existing ones
• Ceilings per company: total support up to ₹50 crore for large companies and ₹25 crore for small ones; within this, the opex part is capped at ₹10 crore and ₹5 crore respectively
• Small recyclers: one-third of the outlay is set aside for small and new recyclers
• Only real extraction counts: support goes to plants that actually extract the critical minerals, not to those that only make black mass
• Expected results (government estimates): at least 270 kilotonnes of yearly recycling capacity, about 40 kilotonnes of critical minerals a year, about ₹8,000 crore of investment and about 70,000 direct and indirect jobs

What has happened so far?

The Ministry of Mines approved 58 companies under the scheme in two rounds: 20 in March 2026 and 38 in April 2026. Together they pledged about 850 kilotonnes a year of recycling capacity, more than three times the 270-kilotonne target, and about ₹5,000 crore of investment. Money will be released only as the plants are built and start producing.

How it fits with other rules

The scheme pays recyclers, while separate rules force companies to send waste to recyclers:

• The E-Waste (Management) Rules, 2022 make producers of electronic goods responsible for getting their old products collected and recycled. This is called Extended Producer Responsibility (EPR).
• The Battery Waste Management Rules, 2022 set EPR targets for batteries, including minimum recovery of materials from used batteries and a minimum share of recycled material in new batteries.
• So the rules create a supply of waste for recyclers, and the incentive scheme helps recyclers build plants that can actually pull out the minerals.

Commonly confused concepts

• Critical Mineral Recycling Incentive Scheme vs National Critical Mineral Mission (NCMM): The NCMM is the big umbrella mission (₹16,300 crore of government spending, plus ₹18,000 crore expected from public sector companies) covering exploration, mining, processing, overseas assets and recycling. The ₹1,500 crore recycling scheme is only one part under it.
• Recycling scheme vs PLI schemes: Production Linked Incentive (PLI) schemes, like the one for advanced chemistry cell batteries, pay for making new products. The recycling scheme pays for taking minerals back out of waste.
• Black mass vs recovered minerals: Black mass is the dark powder made by shredding used battery cells. It still holds lithium, cobalt, nickel and graphite mixed together. Making black mass is only the first step; the scheme supports the later step of separating out the pure minerals.
• Primary vs secondary sources: Primary sources are minerals dug out of the ground. Secondary sources are minerals recovered from waste and scrap.

Issues, criticism and the way forward

• Collection is weak: Much of India's e-waste is still handled by the informal sector (small, unregistered workshops), often by burning or acid washing that harms health. Formal recyclers may not get enough waste to run their plants fully.
• Only first-stage processing: Experts warn that some supported plants may stop at black mass and export it, instead of building the harder, costlier refining step in India. Close monitoring of actual extraction is needed.
• Size of the money: ₹1,500 crore over six years is small compared with the cost of large refining plants, so private investment must do most of the work.
• Technology: Refining lithium, cobalt and rare earths needs advanced chemical methods that India is still building.
• Way forward: The Ministry of Mines is developing a unified digital platform to link waste collection with recyclers. Experts suggest stronger enforcement of EPR, bringing informal workers into the formal system, a dedicated authority for recycling and the circular economy, and linking recycling with domestic battery and magnet manufacturing.

Concepts to Know

• Critical minerals: Minerals that are very important for a country's economy and security but whose supply is at risk, for example lithium, cobalt, nickel, graphite and rare earth elements.
• E-waste: Thrown-away electrical and electronic items, such as old phones, laptops, chargers and televisions.
• Lithium-ion battery (LIB): The rechargeable battery used in phones, laptops and electric vehicles. It contains lithium and often cobalt, nickel and manganese.
• Urban mining: Getting valuable metals out of waste in cities, like old electronics, instead of digging them from the ground.
• Capex and opex: Capex (capital expenditure) is one-time spending on building a plant and buying machines. Opex (operating expenditure) is the regular cost of running the plant, like wages, power and raw material.
• Kilotonne: One thousand tonnes.
• Catalytic converter: A part fitted in a vehicle's exhaust that reduces harmful gases. It contains costly metals like platinum, palladium and rhodium that can be recovered.
• Extended Producer Responsibility (EPR): A rule that the company which makes or sells a product is responsible for collecting and recycling it after the customer throws it away.