The Ministry of Mines has notified an Incentive Scheme for Promotion of Critical Minerals Recycling under the National Critical Mineral Mission (NCMM). The scheme seeks to address India’s high import reliance on critical minerals such as lithium, cobalt, nickel, and graphite—essential for sectors like defence, electronics, space, and clean energy. With domestic reserves and production remaining limited, the scheme focuses on developing a robust domestic recycling ecosystem to retain and utilize secondary sources of these minerals, including e-waste and lithium-ion battery (LIB) scrap. It aims to quadruple recycling capacity to 400 kt by 2030. Financial incentives include a 20% capital expenditure subsidy for new or expanded recycling units and an operational expenditure subsidy linked to incremental sales. Beneficiaries are classified into two groups based on global manufacturing revenue: Group A (₹200 crore or more) and Group B (below ₹200 crore, including start-ups). The scheme supports e-waste recycling, LIB recycling (R3/R4), and other secondary sources, provided recyclers are registered under relevant EPR rules. It incentivizes actual mineral extraction processes, not just collection or dismantling, and sets an 80% recovery yield target. The scheme will run for six years (FY 2025-26 to 2030-31) with a maximum incentive cap of ₹50 crore for Group A and ₹25 crore for Group B. Implementation will be overseen by a Project Management Agency (PMA) and reviewed periodically by a Governing Council to ensure alignment with national self-reliance and supply chain resilience goals.
MINISTRY OF MINES
SCHEME NOTIFICATION
New Delhi, the 8th September, 2025
Subject: Incentive Scheme for Promotion of Critical Minerals Recycling
1. Background
1.1 F. No. 02/12/2024-ES.—The Government has identified critical minerals due to their high economic significance and high import reliance. Economic significance is on account of its use in strategic sectors such as space, aeronautics, defence, electronics, fertilizers and clean energy systems. Critical minerals like Cobalt, Lithium, Nickel, Graphite, etc. are directly relevant to energy transition systems. In space, aeronautics, defence or electronics, critical minerals enable high-tech application in precision equipment and processes. Supply chain resilience of such minerals play a crucial role in the country’s effort towards achieving self-reliance in the above sectors.
1.2 Through the Mines and Minerals (Development and Regulation) (MMDR) Amendment Act, 2023, 24 critical and strategic minerals have been inserted and listed in Part ‘D’, Schedule 1 of the Act. In most of these minerals, reserves as well as production are either nil or very low, resulting in high import reliance (over 80% in most critical minerals) with total annual foreign exchange impact of over 280,000 crore. Another area of concern is reliability of supply source as mining of critical minerals happen in only a few countries like Argentina, Australia, Chile, China, DR Congo and Indonesia. And in processing, over 65% is happening in China alone. This has resulted in supply chain vulnerability. Additionally, the imports are often of finished products, leading to loss of value that could have been captured domestically.
1.3 In the Union Budget 2024-25, the Union Finance Minister had made the following announcement:
“We will set up a Critical Mineral Mission for domestic production, recycling of critical minerals, and overseas acquisition of critical mineral assets. Its mandate will include technology development, skilled workforce, extended producer responsibility framework, and a suitable financing mechanism.”
1.4 Following the approval by the Union Cabinet on 29.01.2025, the National Critical Mineral Mission (NCMM) has been set up, comprising several key components such as increasing exploration and auction of critical mineral blocks to increase domestic production, acquisition of critical mineral assets abroad, recycling, skilling, research & development, etc. Specifically, as per the NCMM, an incentive scheme for the recycling of critical minerals, with the quantum of incentive pegged at 21,500 crore, has been envisaged.
1.5 The Ministry of Mines has already initiated several steps towards building the domestic capacity of and supply chain resilience in critical minerals. The number of exploration projects in critical minerals undertaken by the Geological Survey of India (GSI) has increased almost four times over the last five years (59 projects in field season 2021-22 to 227 projects in FS 2025-26). The Central Government has so far put up 55 unique critical and strategic mineral blocks for auction in five tranches, of which 34 blocks have been successfully auctioned. Apart from acquisition of lithium block in Argentina by M/s Khanij Bidesh India Limited (KABIL), a Ministry of Mines’ PSU, India secured an area of 9,000 square km in Zambia for exploration and mining by Indian government entities. However, the above steps have a gestation period before they could supply critical minerals to the Indian industry.
1.6 A more expedient way to ensure supply chain sustainability is through the recycling of their secondary sources (“urban mining”). In other words, all the material that has been imported (and/ or produced domestically) and is available in the system is retained in the country and utilized. The secondary source needs to be tapped into, in order to build a reverse supply chain of critical minerals.
1.7 Major sources for extraction of critical minerals are e-waste and Lithium-ion Battery (LIB) waste. The reported annual processing capacity of 322 registered e-waste recyclers, as of 09.02.2025, is about 2.2 million ton (mt). However, recycling presently involves mostly collection, dismantling, shredding/ crushing and sorting. Current recycling capacity involved in actual extraction of critical minerals is limited. In recycling of dead LIBs, most Indian battery recyclers are currently R2 recyclers (black mass producers). The existing capacity for R3 recycling (black mass to metal salt/ metal) and R4 recycling (end-to-end battery scrap to metal salt/ metal) is also limited. There are about 10-12 recyclers with a combined recycling capacity of approximately 100 kilo ton per annum (ktpa) for extraction of critical minerals. The annual recycling capacity needs to increase four times to at least 400 kt by 2030 so as to make full use of the dead battery feedstock that is expected to be available annually by 2030. The capacity may get doubled by 2030 in a normal course.
1.8 An incentive scheme under the NCMM is, thus, proposed to meet capacity shortfalls, besides developing capacity for extraction of critical minerals from e-waste and other used products.
2. Incentive Scheme for Promotion of Critical Minerals Recycling
2.1 The Scheme will provide financial incentives to the industry to develop recycling capacity for critical materials in the country for the separation and production of critical minerals from secondary sources through recycling.
2.2 The list of critical minerals outlined in Appendix-I will be under the ambit of the Scheme.
3. Objective
3.1 The objective of the scheme is to foster economic resilience in critical minerals through increased domestic capacity and reduced import dependence; and to address recycling capacity shortfalls amidst increasing availability of feedstock.
4. Eligibility of investment
4.1 The target beneficiary of this scheme will be the recyclers of secondary products recovering and extracting critical minerals registered in India. The authorization by CPCB/ SPCB of recycling facilities will be a mandatory requirement for selection of recyclers for incentives under the scheme.
4.2 The target beneficiaries will be classified into two groups on the basis of their Global Manufacturing Revenue (GMR) i.e. the total revenue earned by a company including its holding company (in case of the company being a subsidiary) or subsidiary companies (in case of the company being a holding company). The criteria for grouping are given below:
| # | Group | Criteria (GMR of applicants in base year) | Recycler type |
| 1. | A | Equal to or more than ₹200 crore | Large, established |
| 2. | B | Below ₹200 crore | Small, new (including start-up) |
4.3 The Scheme will be applicable to investments in new units as well as expansion of capacity/ modernization and diversification of existing units.
4.4 The scheme will incentivize various recycling systems viz. E-waste recycling, LIB scrap recycling and other recycling i.e. recycling of waste and scrap other than e-waste and LIB scrap.
4.5 Existing recycling units should have valid registration under the following Extended Producer Responsibility (EPR) Rules notified by MoEFCC as may be applicable:
i. E-Waste (Management) Rules, 2022
ii. Battery Waste Management Rules, 2022
iii. The Environment Protection (End-of-Life Vehicles) Rules, 2025
4.6 New/ startup recycling facility should get registered under the respective EPR Rules as may be applicable before starting recycling/ refining, once prior processes for registration have been undertaken.
4.7 While the scheme is per se feedstock source-agnostic, the sourcing of feedstock, whether domestic or imported, for recycling will have to follow the extant rules and regulations in place.
5. Process parameters of the scheme
5.1 Eligible input (scrap sources):
5.1.1 For the purposes of this scheme, e-waste will be as defined in the E-Waste (Management) Rules, 2022, in section 3(1)(l) and in Schedule I to the rules that lists out categories of electrical and electronic equipment. LIB scrapwill be the different advanced chemistry cell (ACC) mixes like LFP, NMC and LCO, etc. Other scrap will include all kinds of scrap (except e-waste and LIB scrap) from which critical minerals can be extracted e.g. catalytic convertor in end-of-life vehicles (ELVs), etc.
5.1.2 The secondary sources should normally have concentration of individual critical materials less than 30% to ensure that the allocation of funds is weighted towards sources that are harder to process.
5.2 Eligible output (recovered finished produce): Incentives shall be intended for the recovery and production of critical minerals in usable product or intermediary form. This will ensure that the scrap sources are recycled with domestic value capture. The purity of metals/ ores/ compounds produced shall normally be at least 99%.
5.3 Eligible process: The scheme will incentivize chemical processing/ extraction (L3), which for LIB scrap recycling will mean R3 recyclers (black mass to metal salt/ metal) and R4 recyclers (end-to-end battery scrap to metal salt/ metal) using hydrometallurgy, besides new and promising technologies. No incentive will be provided to recyclers under L1 (collector, dismantler) and L2 (shredder, sorter)/ R2 (black mass production from LIB scrap through mechanical shredding) categories. In other words, the Scheme will provide incentive for the recycling value chain which is involved in actual extraction of critical minerals, and not the value chain involved in only collecting, dismantling, shredding/ crushing or sorting.
5.4 Yield target: Given that recovery in the recycling process is important, the base level yield target will be 80% for extraction and separation of all critical minerals i.e. at least 80% of recoverable material will have to be separated/ produced by recycling.
6. Incentive structure under the Scheme
6.1 The incentive structure under the Scheme shall be as under:
6.1.1 Capex Subsidy: An incentive of 20% on capital expenditure shall be provided to the units for new recycling capacity or fresh expansion of existing capacity for starting production within specified timeframe, beyond which reduced subsidy as per schedule at Appendix-II shall be applicable. The incentive shall be provided on reimbursement basis. The capital expenditure will be the total of expenditure in plant & machinery, equipment, and associated utilities. Details of such eligible capital expenditure will be specified in the Scheme guidelines. In the case of refurbished plant, machinery and equipment whether imported or domestically procured, their total value not exceeding 20% of the total eligible plant, machinery and equipment, shall be considered for calculation of incentives in this regard.
6.1.2 Opex Subsidy: Incentive on incremental sales over the base year (FY 2025-26) viz. 40% of eligible Opex subsidy in the 2nd year and balance 60% in the 5th year from FY 2026-27 to FY 2030-31 shall be provided, on achievement of threshold incremental sales, as per details at Appendix-II.
6.1.3 Hybrid of Capex subsidy and Opex subsidy
6.2 ncentive ceiling: Total incentive per participant shall be subject to a ceiling in order to ensure greater number of beneficiaries. Given the estimated number of beneficiaries, an overall ceiling of ₹50 crore for a beneficiary falling under Group A, and a ceiling of ₹25 crore for a beneficiary falling under Group B is stipulated to start with. The ceiling can be revised upward as per need later, to ensure full utilization of the incentive money. Within the above overall ceiling, there will be a ceiling for Opex subsidy of ₹10 crore for Group A entities and ₹5 crore for Group B entities.
6.3 The incentives, if any, offered by the State Government or any of its agencies or local bodies shall be over and above the incentive eligible under the Scheme.
6.4 The applicants shall also be eligible to take benefit under any other scheme(s) of Government of India. Recyclers located in cluster development programmes will also be supported.
7. Tenure of the Scheme
7.1 The tenure of the Scheme is for a period of six years from FY 2025-26 to FY 2030-31.
7.2 The Scheme shall be opened initially for a period of 6 (six) months from the date of call for applications. The applications received under the Scheme will be appraised on an on-going basis and implementation will continue as per the approvals accorded under the Scheme. If required, applications will be invited again.
8. Threshold Limit of Investment
8.1 There shall be minimum threshold investment on the part of the applicant in order to be eligible under the Scheme. Same will be specified in the Scheme guidelines.
8.2 The thresholds are same for new units or expansion of capacity/ modernization and diversification of existing units.
8.3 Periodic reviews will be undertaken with respect to changes, if any, to the list of goods/ thresholds for which incentives are provided.
9. Approval and Disbursement Process
9.1 Application under the Scheme can be made by any entity of the target segment registered in India.
9.2 Each and every application will be treated as new investment and will be treated as an independent application. The application shall be only for single-phase projects and phase-wise applications will not be considered under the Scheme. There is no restriction on any applicant from making multiple applications and/ or for multiple locations.
9.3 An initial application completed in all respects and submitted before the due date of the scheme will be appraised on an on-going basis and considered for approval. Acknowledgment will be issued after initial scrutiny of the application. The acknowledgment of the application shall not be construed as approval under the Scheme.
9.4 The incentive under the Scheme shall be applicable for investment made from the date of approval of the Scheme.
9.5 The incentive against the eligible capital expenditure shall be released after the approval of the application, subject to capital expenditure exceeding the threshold value and only on commencement of commercial production. The subsequent claims for the incentive may be submitted on a six-monthly basis.
9.6 The unit receiving incentive under the Scheme will have to remain in commercial production for a period of at least 3 (three) years from the date of commencement of production or 1 (one) year from the date of receipt of last incentive, whichever is later.
10. Governance Mechanism
10.1 The Scheme will be implemented through a Project Management Agency (PMA), which will be responsible for providing secretarial, managerial and implementation support, and for carrying out other duties as assigned by the Ministry of Mines from time to time. The functioning and responsibilities of the PMA will be elaborated in the Scheme guidelines.
10.2 For carrying out activities related to implementation of the Scheme, the PMA would, inter-alia, –
10.2.1 Receive applications, issue acknowledgments, undertake appraisals, and verify eligibility of applicants for support under the Scheme.
10.2.2 Get the disbursal claims examined and disburse the incentive to the approved applicants.
10.2.3 Submit periodic reports to the Ministry of Mines on the progress and performance of the Scheme.
10.3 PMA shall submit the applications, which have been appraised and found eligible, before an Executive Committee (EC) to be constituted by the Ministry of Mines. The EC will be chaired by an officer not below the rank of Joint Secretary in the Ministry of Mines and will include representatives from relevant ministries, departments, and organizations. Detailed constitution, functioning and responsibilities of the EC will be specified in the Scheme guidelines.
10.4 EC shall recommend to PMA for approval/ rejection/ modification of the applications. On the basis of the recommendations of EC, PMA shall issue an approval letter to the applicant, with a copy to the Ministry of Mines.
10.5 Ministry of Mines shall make budgetary provisions for disbursal of incentives to approved projects under the Scheme. The disbursement of the incentives shall be done by the PMA on the basis of approval conditions and as per financial rules. PMA shall submit budgetary requirements to the Ministry of Mines as consolidated amounts on a regular basis.
10.6 For implementation of the Scheme, the detailed Scheme Guidelines shall be drawn up by the Ministry of Mines and issued separately.
10.7 The progress of the Scheme shall be reviewed through a Governing Council (GC), to be constituted by the Ministry of Mines under the chairmanship of the Secretary, Ministry of Mines, and will include experts from the government and industry. Detailed constitution, functioning, and responsibilities of the GC will be specified in the Scheme guidelines. The GC shall periodically review the progress of the Scheme and the projects thereof. GC is authorized to review and carry out amendments in the Scheme guidelines, with respect to target segments; applicable incentive rates; threshold of investment and sales; gestation period; list of plant & machinery, equipment and associated utilities eligible for incentives under the Scheme, along with applicable thresholds; or any other matter considered necessary for effective implementation of the Scheme, from time to time.
10.8 Mid-term assessment of the Scheme will be conducted to evaluate its impact on the industry and the broader economy, ensuring alignment with its stated objectives.
SHAKIL ALAM, Economic Advisor
Appendix-I
List of critical minerals under the ambit of the Incentive Scheme
| 1. | Antimony bearing ores |
| 2. | Beryl and other beryllium bearing minerals |
| 3. | Bismuth bearing ores |
| 4. | Cadmium bearing minerals |
| 5. | Cobalt bearing minerals |
| 6. | Gallium bearing minerals |
| 7. | Germanium bearing Zinc ores |
| 8. | Glauconite |
| 9. | Graphite |
| 10 | Indium bearing minerals |
| 12. | Lithium bearing minerals |
| 13. | Molybdenum bearing minerals |
| 14. | Nickel bearing minerals |
| 15. | Niobium bearing minerals |
| 16. | Phosphate (without uranium) |
| 17. | Platinum group of elements bearing minerals |
| 18. | Potash |
| 19. | Rare Earth Elements (minerals of the “rare earths” group not containing Uranium and Thorium) |
| 20. | Rhenium bearing minerals |
| 21. | Selenium bearing minerals |
| 22. | Tantalum bearing minerals |
| 23. | Tellurium bearing minerals |
| 24. | Tin bearing minerals |
| 25. | Titanium bearing minerals and ores (ilmenite, rutile and leucoxene) |
| 26. | Tungsten bearing minerals |
| 27. | Vanadium bearing minerals |
| 28. | Zirconium-/ Hafnium-bearing minerals and ores including Zircon |
Appendix-II
A1. Indicative Scale of Capex subsidy for Group A and B entities requiring Environment Clearance (EC)
as per time taken to start production from date of approval
| New unit | Expansion unit | Rate of Capex subsidy |
| 18 months | 12 months | 20% |
| 24 months | 18 months | 17% |
| After 24 months | After 18 months | 14% |
Note: Ministry of Mines may modify the timelines as may be necessary
A2. Indicative Scale of Capex subsidy for smaller units not requiring Environment Clearance (EC) as per
time taken to start production from date of approval
| New unit | Expansion unit | Rate of Capex subsidy |
| 12 months | 8 months | 20% |
| 18 months | 12 months | 17% |
| After 18 months | After 12 months | 14% |
Note: Ministry of Mines may modify the timelines as may be necessary
B. Threshold for Opex subsidy
| Year | Incentive of total eligible Opex (%) | Incremental sales threshold (₹ crore) | |
| Group A | Group B | ||
| Year 2 | 40% | 60 | 30 |
| Year 5 | 60% | 150 | 75 |
Note: Year 0 is base year
