India is currently dependent on imports of many important minerals. Minerals like lithium, cobalt, nickel, and rare earth minerals are essential for electric vehicles, renewable energy, electronics, and defense. But India imports more than 80% of these from abroad. This increases the cost of foreign exchange and creates risks for the country’s energy security and industrial development.
There is now an emphasis on efficient use of resources and the circular economy across the world. So, the Government of India has launched the Incentive Scheme for Promotion of Critical Minerals Recycling as part of the National Critical Minerals Mission. The scheme aims to recover minerals through urban mining and recycling technologies to reduce foreign dependence and prevent environmental damage.
With a budget of about ₹1,500 crore, this scheme will take forward the vision of a self-reliant India. It will provide a strong foundation for industry, startups, MSMEs, and the environment.
What is the Critical Minerals Recycling Incentive Scheme?
The Critical Minerals Recycling Incentive scheme has been launched under the National Critical Minerals Mission to increase India’s mineral security. It aims to recover important minerals from secondary sources such as e-waste, lithium-ion battery scrap, and obsolete vehicles.
Instead of conventional mining, this scheme encourages urban mining. Minerals that already exist as waste will be recovered through advanced technology. This will reduce import dependence and pollution caused by batteries and electronic waste.
This scheme will provide three types of financial assistance to investors: CAPEX subsidy, OPEX subsidy, and a hybrid model. So, financial benefits will be available in both cases of setting up new recycling units or expanding old units. In the long run, it will provide economic security and build an environmentally friendly industry.
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Objectives of the Scheme
The objective of this incentive scheme is multifaceted. Firstly, to reduce import dependency, as India spends over ₹80,000 crore annually on importing essential minerals. Secondly, to strengthen the country’s industries like battery, e-waste, and end-of-life vehicle recycling.
Thirdly, to involve startups and MSMEs in the mineral recycling industry using advanced technology. Fourthly, to promote clean energy for electric vehicles, renewable energy, and the circular economy.
Finally, one of the objectives of this scheme is to reduce environmental damage and pollution through effective waste management. Overall, it is a win-win initiative for both the economy and the environment.
Essential Minerals Covered by The Scheme
A total of 27 essential minerals is included in the scheme. Some of these are particularly strategically important:
- Antimony-bearing ores
- Beryl and other beryllium-bearing minerals
- Bismuth bearing ores
- Cadmium bearing minerals
- Cobalt bearing minerals
- Gallium bearing minerals
- Germanium bearing Zinc ores
- Glauconite
- Graphite
- Indium-bearing minerals
- Lithium-bearing minerals
- Molybdenum-bearing minerals
- Nickel-bearing minerals
- Niobium-bearing minerals
- Phosphate (without uranium)
- Platinum group of elements bearing minerals
- Potash
- Rare Earth Elements (minerals of the “rare earths” group not containing Uranium and Thorium)
- Rhenium-bearing minerals
- Selenium-bearing minerals
- Tantalum-bearing minerals
- Tellurium bearing minerals
- Tin-bearing minerals
- Titanium-bearing minerals and ores (ilmenite, rutile, and leucoxene),
- Tungsten-bearing minerals
- Vanadium-bearing minerals
- Zirconium-/ Hafnium-bearing minerals and ores, including Zircon
These minerals are directly related to national security and economic strategy. India will be able to create a sustainable supply chain of these through the recycling scheme. This will reduce import risks and strengthen the domestic industry.
Read more – The Future of Metal Recycling Plants: Trends and Opportunities
Eligibility Criteria for Critical Minerals Recycling Incentive Scheme
Have a look at the eligibility conditions for the Critical Minerals Recycling Incentive Scheme-
Target Beneficiaries
This scheme is primarily for recyclers who recover valuable minerals from e-waste or battery scrap. To avail the benefits, the unit concerned must be registered in India and have a valid registration with CPCB or SPCB.
Revenue-wise classification
Group A: Those with an annual global manufacturing revenue of more than ₹200 crore. These are large and experienced recyclers.
Group B: Those with a revenue of less than ₹200 crore. This includes small units and startups.
Inclusion of new and old units
This scheme will include new recycling units and existing units that want to modernize or expand.
Compliance with mandatory rules
The units must be registered as per E-Waste Rules 2022, Battery Waste Rules 2022, and End-of-Life Vehicles Rules 2025.
Feedstock Procurement Rules
Recyclers can use domestic or international waste. However, they must comply with applicable laws and regulations.
Explanation of Incentive Structure
Capex Subsidy
A subsidy of up to 20% of the capital expenditure for setting up a new unit or expanding an existing unit will be provided. This cost includes plant, machinery, utilities, and other related expenses. The production must be started within the stipulated time. The maximum subsidy will be available if the work is completed within the time, but the rate will be reduced if there is a delay.
Opex Subsidy
Recyclers will receive financial assistance based on their additional sales compared to the first year (2025-26). The subsidy will start from the second year and will continue till 2030-31 based on the increase in sales. This phased assistance will facilitate the long-term business planning of recyclers.
Hybrid Model
Those who wish can avail themselves of the combined benefits of the CAPEX and OPEX subsidy. This will provide financial support for both initial investment and ongoing costs.
Read more – E-waste Recycling Ecosystem and Its Dynamics in India
Benefits for Startups and Small Recyclers
This scheme particularly encourages startups and small units. They will have the opportunity to come forward with new technologies and innovative ideas.
Eligible Inputs
Only specific types of waste are included in the scheme. These include e-waste (as per E-Waste Rules 2022), scrap of lithium-ion batteries (such as LFP, NMC, and LCO chemistry), and catalytic converters.
Eligible Outputs
The recovered minerals must be in usable or intermediate form, and their purity must be ensured to be at least 99%. This will enable direct use in the industrial sector.
Eligible Processes
Only modern recycling methods, such as hydrometallurgy, are acceptable. In battery recycling, R3 (black mass to metal salts) and R4 (end-to-end recycling) processes are allowed. Merely breaking, cutting, or making black mass will not be considered eligible.
Recovery Target
The units will have to achieve at least 80% recovery efficiency. This will ensure maximum mineral recovery from the waste, and the best use of resources will be possible.
Scheme Duration and Minimum Investment Limit
The scheme has been fixed for a period of 6 years, i.e., from the financial year 2025-26 to 2030-31. Recyclers will have to apply within the stipulated time and start work after getting approval.
Applicants will have to make a threshold investment to avail the benefits. The government will update the list and amount of this minimum investment from time to time. This helps to maintain fairness and effectiveness according to the needs of the industry.
Approval and Disbursement Process
Recyclers will have to submit project-based applications to participate in this scheme. First, the application will be initially verified by the Project Management Agency (PMA). Then, a detailed technical and financial evaluation will be completed. The project’s capability, technology, environmental criteria, and investment structure will be examined in detail.
Once the evaluation is complete, the Executive Committee (EC) will make recommendations, and the PMA will give final approval based on that. The subsidy or incentive distribution for the approved project will start when the project starts commercial production. Recyclers can submit incentive claims every six months.
Also, the project must be actively operated for at least 3 years after receiving the incentive. This ensures financial assistance provided by the government and strengthens the country’s mineral recycling system in the long term.
Governance Mechanism of the Scheme
A three-tier governance structure has been developed for the implementation of this scheme. The first tier will be the Project Management Agency (PMA). It will be responsible for receiving applications, initial verification, progress reporting, and subsidy distribution.
The second tier will be the Executive Committee (EC), headed by the Joint Secretary, Ministry of Mines. This committee will review the project proposals and make recommendations.
The third tier will be the Governing Council (GC), headed by the Secretary, Ministry of Mines. This council will monitor the overall progress of the project, revise the scheme if necessary, and coordinate long-term policies.
This three-tier structure will ensure transparency, accountability, and effective implementation of the scheme.
Economic and Environmental Benefits
The project will have a positive impact on both the economy and the environment of India. Firstly, it will create a lot of employment opportunities as new enterprises and factories will be set up in the recycling industry.
Secondly, it will save foreign exchange by reducing dependence on the import of important minerals. Currently, the country imports minerals worth over ₹80,000 crore annually. When this expenditure is reduced, economic stability will increase.
Thirdly, startups, MSMEs, and domestic entrepreneurs will be able to bring innovations using modern technology. This will create a strong recycling ecosystem in the country.
Fourth, the project will help India meet its clean energy and EV targets. The recycled minerals will be used in batteries, solar technology, and electronic devices.
Finally, landfill and e-waste pollution will be reduced, which will directly contribute to environmental protection. Thus, the project will simultaneously balance economic development and environmental protection. Environmental clearance is something businesses can’t ignore in current scenario.
To Wrap Up
The Critical Minerals Recycling Incentive Scheme is an important step for India. It will ensure economic security and help build clean energy and Aatmnirbhar Bharat. Reducing import pressure, creating new jobs, protecting the environment, and increasing opportunities for startups.
It is the right time if you want to start a new venture in the recycling industry or expand an existing unit. You will get financial incentives and strengthen the future of the country by participating in this scheme.
Corpbiz can help you simplify the registration, compliance, and incentive process.
Contact us today and take advantage of the Critical Minerals Recycling Incentive Scheme. Get expert support in EPR registration, registration for scrap battery import, and registration for lead acid battery recycling.
Frequently Asked Questions about Critical Minerals Recycling Incentive Scheme
What is the main objective of the Critical Minerals Recycling Incentive Scheme?
This reduces dependence on imports and encourages the domestic recycling industry. Valuable minerals will be recovered from end-of-life batteries, e-waste, and vehicles. This will ensure a sustainable supply to the renewable energy and EV industry. This will strengthen India's economic and energy security.
Which industries will benefit the most from this scheme?
Electric Vehicles (EVs), renewable energy, electronics, and defence industries will benefit the most. New opportunities will be created in the e-waste management and battery recycling sectors. Minerals such as lithium, cobalt, nickel, and rare earths are obtained to secure the supply chain. Startups and MSME units will be able to strengthen the domestic market by using innovative technologies.
How will this scheme help startups and small recyclers?
Startups and small recyclers often face limited capital and technical constraints. This scheme has a special opportunity for them. They will get CAPEX and OPEX subsidies and will be encouraged to use innovative technologies. In addition, MSMEs and new entrepreneurs will be able to adopt international standard processing technology. This will result in the rapid expansion of the domestic industry and increase employment.
What types of waste are eligible for recycling under this scheme?
The scheme will mainly include e-waste, used lithium-ion batteries (LFP, NMC, LCO), catalytic converters, and used metal components of vehicles. High-purity minerals such as lithium, nickel, cobalt, or platinum can be recovered from these sources. This will ensure a sustainable supply of minerals and reduce pressure on natural mineral extraction.
What kind of financial incentives will be given to recyclers?
The scheme has three types of financial incentives for recyclers. Up to 20% of the eligible capital expenditure will be provided as a CAPEX subsidy. OPEX subsidy will be linked to sales growth and will be distributed in phases. There is also a hybrid model, where both CAPEX and OPEX benefits can be availed together. This will benefit both small and large units.
How long will this scheme last, and what is its budget?
The period of this incentive scheme has been fixed for 6 years, i.e., from the financial year 2025-26 to 2030-31. A total budget of ₹1,500 crore has been allocated for it. This money will be spent on various projects in phases. The government will review the scheme every year so that necessary changes can be made according to the real situation and the benefits are distributed properly.
What compliance is mandatory for existing recycling units?
Existing units will have to operate as per the E-Waste Management Rules 2022, Battery Waste Rules 2022, and End-of-Life Vehicles Rules 2025. Registration with CPCB or SPCB is also required. Units will have to procure feedstock from approved sources and maintain environmental standards. This will ensure that financial incentives are spent on environmentally friendly and responsible recycling activities.
How will this scheme contribute to India's clean energy goals?
Lithium, nickel, cobalt, and rare earths are crucial for India's rapid growth in EVs, solar power, and renewable energy. This scheme will ensure a domestic supply of these minerals through recycling. This will reduce import pressure, reduce production costs, and increase the acceptance of clean energy. This will help India move towards achieving net zero quickly.
What is the role of urban mining in this scheme?
Urban mining refers to the extraction of minerals from e-waste, used batteries, and metal waste accumulated in cities. It is a sustainable alternative to natural mineral mining. Urban mining will play a major role in this scheme. It will enable the recycling of minerals at a cost-effective rate and without environmental damage. It will also enable recyclers to develop new business models.
How can businesses apply under Critical Minerals Recycling Incentive scheme?
Businesses or recyclers can submit project-based applications. The application will first be verified by the PMA. Then the Executive Committee (EC) will review the proposal and make recommendations. After receiving final approval, the subsidy will be disbursed once commercial production starts. Claims will have to be submitted every six months. The application process will be completed online simply and transparently.
Read more – EPR for Plastic Recycling: Reasons and Solutions
