Cabinet approves Rs 1,500 crore sops for critical mineral recycling

The cabinet committee on economic affairs approved a Rs 1,500 crore incentive scheme for recycling critical minerals over six years (FY26 to FY31). An official statement said eligible feedstock is e-waste, Lithium Ion Battery (LIB) scrap, and scrap in end-of-life vehicles.

"Incentives will be provided for the recycling value chain, which is involved in actual extraction of critical minerals, and not the value chain involved in only black mass production," the statement added.

This scheme is part of the National Critical Mineral Mission (NCMM), which is aimed at building domestic capacities and supply chain resilience in critical minerals. These sops are in line with efforts to recycle at least 10% of the nation’s annual consumption of critical minerals. The centre expects these sops to aid developing at least 270 kilo ton of annual recycling capacity resulting in around 40 kilo ton annual critical mineral production, bringing in roughly Rs 8,000 crore of investment.

“The incentives under the scheme will comprise 20% capital expenditure (capex) subsidy on plant and machinery, equipment and associated utilities for starting production within specified timeframe,” the statement said.

There will also be an operational expenditure (Opex) subsidy, which will be an incentive on incremental sales over the base year (FY 2025-26). The statement said 40% of eligible Opex subsidy will be disbursed in the 2nd year and balance 60% in the 5th year from FY 2026-27 to FY 2030-31. This will be valid after achieving the threshold incremental sales.

“In order to ensure greater number of beneficiaries, total incentive (Capex plus Opex subsidy) per entity will be subject to an overall ceiling of Rs 50 crore for large entities and Rs 25 crore for small entities,” the statement said.

Expected beneficiaries will be both large, established recyclers, as well as small, new recyclers (including start-ups), for whom one-third of the scheme outlay has been earmarked. The scheme will be applicable to investments in new units as well as expansion of capacity or modernization and diversification of existing units.