The provision of both capital expenditure (Capex) and operational expenditure (Opex) subsidies under the Rs 1.5 billion incentive scheme for Critical Mineral Recycling is expected to accelerate the establishment of advanced recycling infrastructure, said the industry body India Energy Storage Alliance (IESA). The scheme, the body added, is set to transform India’s recycling landscape and strengthen the National Critical Mineral Mission (NCMM) by supporting recovery and reuse of e-waste, lithium-ion battery (LIB) scrap, and end-of-life vehicles.

“Through the provision of both Capex and Opex subsidies, the initiative aims to empower industry players and fast-track the establishment of advanced recycling infrastructure,” IESA stated. Debmalya Sen, President of IESA, said, “This transformative step by the Cabinet reflects a visionary commitment to building a robust circular economy, ensuring resource security, and driving innovation in recycling technologies. IESA is proud to have contributed to the development of this scheme.”

The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the Rs 1.5 billion Incentive Scheme on 3 September to develop recycling capacity for the separation and production of critical minerals from secondary sources. The scheme is part of the NCMM, aimed at building domestic capacity and supply chain resilience in critical minerals.

The scheme will run for six years from FY 2025-26 to FY 2030-31. Eligible feedstock includes e-waste, LIB scrap, and other scrap such as catalytic converters from end-of-life vehicles. Beneficiaries will include both large-scale recyclers and new players, such as start-ups, with a dedicated one-third of the total outlay earmarked for emerging enterprises.

By supporting the creation of new recycling units alongside the modernisation and expansion of existing facilities, the initiative aims to foster industry growth and technological advancement. Incentives under the scheme comprise a 20 per cent Capex subsidy on plant and machinery, equipment, and associated utilities for starting production within the specified timeframe, beyond which a reduced subsidy will apply. The Opex subsidy is linked to incremental sales over the base year (FY 2025-26), with 40 per cent of the eligible Opex subsidy applicable in the second year and the remaining 60 per cent in the fifth year from FY 2026-27 to FY 2030-31, upon achieving specified incremental sales thresholds.

To ensure broader participation, the total incentive per entity (Capex plus Opex) is capped at Rs 50 crore for large entities and Rs 25 crore for small entities, with ceilings for Opex subsidy set at Rs 10 crore and Rs 5 crore, respectively.

Key expected outcomes include the development of at least 270 kiloton of annual recycling capacity, producing around 40 kiloton of critical minerals per year, attracting approximately Rs 8 billion in investment, and generating nearly 70,000 direct and indirect jobs.

The Union Cabinet had earlier, in January 2025, approved the launch of the NCMM with an expenditure of Rs 16.3 billion and an expected Rs 18 billion investment by Public Sector Undertakings.