According to a news report, in response to global supply chain uncertainties, the Indian government is preparing to introduce a ₹1,500 crore incentive programme to support the recycling of critical minerals. This move is aligned with the National Critical Mineral Mission and follows recent disruptions in rare earth supplies, particularly after China's policy update on April 4.
The plan is aimed at encouraging domestic companies to adopt advanced recycling methods and reduce reliance on imports.
The proposed scheme targets a wide range of essential minerals, including neodymium, lithium, cobalt, nickel, and copper. These minerals are vital for electric vehicles, electronics, defence, and renewable energy technologies. The incentive programme will focus on retrieving these elements from end-of-life products like batteries and magnets, thus contributing to a circular economy.
Government officials noted that rare earth magnets, such as those containing neodymium, are difficult to recycle. Despite this, incentives will be offered to encourage efforts in this space. The objective is to enhance domestic capabilities in processing and extraction to ensure a steady and self-sufficient supply chain for critical minerals.
To accelerate innovation in this field, Hyderabad-based Midwest Advanced Materials (MAM) is in discussions with the Non-Ferrous Materials Technology Development Centre (NFTDC) for acquiring technology related to rare earth magnet processing. Such collaborations are expected to play a significant role in supporting the technological foundation of the recycling ecosystem in India.
At present, several Indian companies are involved in lithium recycling, including Attero Recycling, Lohum Cleantech, and Gravita India Ltd. Global firms like Umicore, Glencore, Li-Cycle Corporation, and RecycLiCo Battery Materials Inc. are also contributing to the battery recycling sector. Most of these firms extract lithium from discarded batteries collected through informal channels such as scrap dealers.
Despite these developments, officials indicate that only 10 to 12 companies are currently active in this domain. The government aims to increase this number to at least 100 through the proposed scheme.
While the potential for recycling is significant, companies have raised concerns over the regulatory framework and environmental compliance issues that make the process less viable. In response, the government is looking to ease these constraints by offering financial support and possibly streamlining the policy environment to attract more players.
Currently, there is no duty levied on scrap processing for extracting critical minerals, which further supports the case for developing a more robust domestic industry.
Lithium, cobalt, and nickel are key components in EV batteries. Neodymium-based magnets are also widely used in electric motors for their high strength and efficiency.
Many consumer electronics, such as smartphones, laptops, and smart appliances, rely on rare earth elements for their miniaturised components and performance.
Wind turbines use rare earth magnets to increase efficiency and reduce maintenance. Copper and nickel also play crucial roles in solar and wind energy infrastructure.
High-performance magnets and rare earths are essential in defence systems, aircraft engines, and satellite components.
Industrial robots and automation tools rely on neodymium magnets and other critical minerals for sensors, actuators, and high-precision movement systems.
Read More: Why Rare Earth Magnets Are Crucial in the Electric Vehicle Industry!
The ₹1,500 crore incentive scheme is a step towards strengthening India’s position in the global supply chain for critical minerals. By encouraging recycling and domestic processing, the government aims to ensure long-term resource security, support sustainable industry practices, and reduce import dependence in strategically important sectors.
Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.
Published on: Jun 9, 2025, 3:53 PM IST
Team Angel One
We're Live on WhatsApp! Join our channel for market insights & updates
Get the link to download the App
