The Ministry of Mines has approved 58 companies under the Incentive Scheme for Promotion of Critical Mineral Recycling as eligible for participation.
Critical minerals, such as lithium, cobalt, nickel, rare earth elements, and graphite, are the fundamental building blocks of the clean energy transition and modern digital infrastructure.
These minerals are used in low-carbon technologies ranging from solar photovoltaic panels, wind turbines, and electric vehicles (EVs) to battery energy storage systems and green hydrogen electrolysers.
High Import Dependence: India is currently 100% import-dependent for essential minerals like lithium and cobalt, with China controlling over 70% of global lithium production and processing. (Source: Down to Earth)
Surging Future Demand: India's cumulative demand for critical energy transition minerals under a Net Zero Scenario is projected to reach about 169 million tonnes by 2070, which is 51% higher than the Current Policy Scenario. (Source: NITI Aayog)
Geopolitical Concentration: Highly concentrated global supply chains leave India vulnerable to price volatility, supply disruptions, and strategic risks.
Supply Chain Vulnerabilities: Global chains face risks from foreign control of assets, major producer export curbs, and long-term offtake agreements that hinder Indian market entry.
Domestic Gaps: Despite holding resources like copper and graphite, India lacks processing infrastructure, faces mining bottlenecks, and shows slow exploration progress.
It is introduced under the National Critical Mineral Mission (NCMM) to promote the recovery of vital critical minerals like lithium, cobalt, nickel, and rare earth elements from secondary waste sources.
It is designed to act as a near-term solution to secure raw materials for clean energy, electric vehicles (EVs), and defense sectors until domestic exploration and mining projects begin to yield results.
Duration and Fund Allocation: From FY 2025-26 to FY 2030-31. The ₹1,500 crore budget is allocated across three different waste streams:
Incentive Structure: Financial support provided to the recyclers is categorized into capital and operational expenditures:
What are the expected benefits of the Scheme?
Boosting Domestic Recycling Capacity: Scheme expected to create 270 kilo tons of annual recycling capacity and yield approximately 40 kilo tons of critical minerals every year. (Source: PIB)
Economic Advantage and Private Investment: The ₹1,500 crore incentive is expected to draw ₹8,000 crore in private capital, lowering manufacturing costs and curtailing foreign exchange outflows.
Job Creation: The initiative is expected to generate approximately 70,000 direct and indirect jobs across the recycling ecosystem. (Source: PIB)
Strengthening Supply Chains: Domestic recovery of critical minerals decreases India's dependence on sensitive global supply chains, securing resources for EV, renewable energy, and defense sectors.
Environmental Impact: Recycling minerals like lithium and cobalt reduces greenhouse gas emissions by up to 80% compared to mining, promoting a circular economy and safer e-waste management.
Informal Sector Dominance: Unregulated informal sector handles roughly 78% of e-waste using hazardous methods, resulting in low recovery rates of 10-20% compared to 95-97% in formal facilities. (Source: NITI Aayog).
Weak Monitoring and Enforcement: Poor integration between Goods and Services Tax Network (GSTN) and Extended Producer Responsibility (EPR) portals hinders invoice verification, allowing non-compliant recyclers to produce fraudulent certificates and transactions.
Limited EPR Coverage: The current framework focuses only on base and precious metals, leading to a mere 17% recovery of critical raw materials and an estimated resource loss of INR 42,500 Cr. (Source: NITI Aayog).
Financial Challenges for Low-Value Batteries: Uniform EPR targets make recycling high-volume, low-value batteries like Lithium Ferro Phosphate (LFP) economically unfeasible due to negative margins
Boost Domestic Extraction and Processing: Accelerate regulatory approvals and foster public-private partnerships (PPPs) to enhance deep-seated mineral extraction and world-class refining infrastructure.
Broaden EPR Mandates: Ministry of Environment, Forest and Climate Change (MoEFCC) should include more high-value metals in E-waste EPR and create a chemistry-specific pricing model to ensure the economic viability of recycling low-value batteries like LFP.
Digital Compliance Integration: Central Pollution Control Board (CPCB) and MoEFCC should link GSTN with the EPR portal to improve traceability and prevent fraudulent claims.
Workforce Formalization: State Governments and Ministry of Micro, Small and Medium Enterprises (MSME) should support informal workers through fee waivers, cluster-based Common Facility Centres (CFCs), and formal certification.
Set Standards and Incentivize Recycling: The Bureau of Indian Standards (BIS) should establish metal composition and purity standards, while the Ministry of Heavy Industries (MHI) uses PLI schemes for Advanced Chemistry Cells to encourage domestic recycled material use.
Utilize Carbon Markets: The Bureau of Energy Efficiency (BEE) should integrate Lithium-ion Battery recycling into the Indian Carbon Market, allowing recyclers to earn revenue through tradable Carbon Credit Certificates.
To secure India against supply shocks and reach its 2070 Net-Zero goal, a self-reliant critical minerals ecosystem—driven by domestic exploration, recycling, and global alliances—is essential.
Source: NEWSONAIR
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PRACTICE QUESTION Q. Analyze the challenges in formalizing the e-waste recycling sector and suggest strategies to enhance the circular economy of critical minerals in India. 150 words |
The NCMM is a government initiative approved with a total outlay of INR 34,300 crore to strengthen critical mineral supply chain. It focuses on enhancing domestic exploration, acquiring overseas assets, and establishing a robust ecosystem for processing and recycling minerals critical for clean energy and defense.
CMRIS is a ₹1,500 crore incentive scheme launched under the NCMM spanning from FY 2025-26 to FY 2030-31. It is designed to boost domestic recycling capacity by incentivizing the extraction of critical minerals like lithium, cobalt, and nickel from e-waste, end-of-life vehicles, and spent lithium-ion batteries.
Urban mining refers to the reclamation and re-monetization of valuable minerals from urban waste, particularly e-waste. It focuses on recovering precious metals like gold and silver, as well as critical minerals from discarded electronics and batteries, serving as a sustainable alternative to traditional mining.
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