The Cabinet’s ₹1,500 Crore Critical Mineral Incentive Program – What Does This Mean for the Recycling Industry in India?

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In September, the Union Cabinet approved a Rs.1,500 crore incentive scheme to promote recycling of critical minerals from secondary sources such as e-waste, lithium-ion battery scrap, and end-of-life vehicles. The scheme, which is a part of the National Critical Mineral Mission (NCMM), will run for six years from FY 2025-26 to FY 2030-31.

The incentive program is an important step towards enhancing India’s recycling capacity and strengthening India's green transition & resource security. Speaking in terms of the outcomes, the incentives under the scheme are expected to develop at least 270000 tonnes of annual recycling capacity, resulting in around 40000 tonnes annual critical mineral production, bringing in about Rs.8,000 crore of investment and creating close to 70,000 direct and indirect jobs.
(Source: Press Information Bureau, India)
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Why This Incentive Scheme Matters

India's dual push for a circular economy and strategic self-reliance is highlighted by this policy. It targets vital minerals that power the clean energy, electric vehicles (EVs), telecommunications, and defence industries, including lithium, cobalt, nickel, graphite, and rare earth elements.

Recycling helps control the rising heaps of battery and electronic waste in addition to lowering reliance on imports. With an annual e-waste production of 4.137 million tonnes, India is the third-largest producer of e-waste worldwide (Global E-waste Monitor 2022). A majority of this waste is processed informally using hazardous techniques that pose a risk to human health and the environment.

While the scheme is an important step into the world of recycling and recovery of critical materials, there is work that still needs to be initiated to maximize the impact and objectives of the incentive program. Let’s spend some time understanding the sector’s evolving landscape and the possibilities it holds.

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Challenges & Gaps

• Infrastructure deficit: We still lack a well-connected network of formal collection channels for a constant supply of e-waste. This results in uneven collection, logistical inefficiencies, and lost material value.
• Dominance of the informal sector: Most of the e-waste is handled by informal sector using unscientific methods, endangering ecosystems and workers alike and resulting in loss of critical materials.
• Technological gaps: Most recycling systems are at a nascentstage. Additionally, recycling solutions for many components, fractions ofe-waste do not yet exist. There is also a lack of technology solutions forre-engineering recovered secondary materials into the material loop. Due to allthese factors combined, the recycling and recovery rate remain rather low.

The Way Forward

• Expand formal collection, recycling infrastructure and simplify collection logistics: Well-positioned, nationwide grassroots collection channels will not only catalyse recycling of critical minerals but will also help manage the high logistics cost of collection and then taking the waste to recycling. Therefore, establishment of formal collection channels ought to be an integral part of any scheme or efforts directed towards e-waste recycling.
• Scalability of technology: In addition to investing in technology for recycling, it is equally important to support the scaling up of these technologies by enabling cost-efficiency in the adoption of technology. Some consideration is necessary in this area as well.
• Facilitating markets for secondary materials: Recycling may not be enough. It is imperative that we find buyers for secondary materials to circulate them back into the system. Furthermore, deeper technological interventions are required for the re-integration and traceability of recovered secondary materials into the system.

In Conclusion

An important victory for the circular economy, India's ₹1,500 crore recycling incentive will help the larger NCMM. However, improved infrastructure, inclusive policymaking, and technological innovation are essential to its success. With the right combination, India can achieve self-sufficiency in critical minerals and sustainable waste management.

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