India clears Rs 1,500 crore subsidy for critical mineral recycling

NEW DELHI: The government on Wednesday approved a Rs 1,500 crore incentive scheme for developing capacity for recycling critical minerals from electronic waste and other scrap such as used lithium-ion batteries and end-of-life vehicles etc. scrap with the aim of creating domestic supply chain resilience.

The scheme is expected to ensure supply of vital elements, which have applications in sectors ranging from energy transition, communications, defence to space, till such time a critical mineral value chain based on exploration, auction and starting of mines as well as acquisition of foreign assets starts feeding the industry.

According to a government statement, the incentives are expected to lead to development of at least 270 kilo tonne of annual recycling capacity resulting in around 40 kilo tonne annual critical mineral production, bringing in about Rs.8,000 crore of investment and creating close to 70,000 direct and indirect jobs.

The incentives will consist of 20% subsidy on capital expenditure (capex) incurred on plant and machinery, equipment as well as associated utilities for starting production within specified timeframe, beyond which subsidy will be reduced.

Subsidy on operational expenditure (opex) will be given in the form of incentive on incremental sales over the base year (2025-26). This will be split into two segments — 40% of eligible opex subsidy in the 2nd year and balance 60% in the 5th year from 2026-27 to FY 2030-31 on achievement of specified threshold of incremental sales.

To ensure greater number of beneficiaries, total incentive (capex plus opex subsidy) for each entity will be subject to an overall ceiling of Rs.50 crore for large entities and Rs 25 crore for small entities. Within this ceiling, opex subsidy will be capped at Rs 10 crore for large and Rs 5 crore for small entities.

The scheme will have a tenure of six years from 2025-26 to 2030-31 financial years. Eligible feedstock is e-waste, Lithium Ion Battery (LIB) scrap, and scrap other than e-waste & LIB scrap e.g. catalytic convertors in end-of-life vehicles.

Investments in new units as well as expansion of capacity or modernisation and diversification of existing units will be eligible for getting subsidy under the scheme. Expected beneficiaries will be both large, established recyclers as well as small, new recyclers (including start-ups).

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