Government launches new critical mineral recycling scheme for EV sector
Autocar Professional, 17 Jun '26
The Union Government has introduced a Rs. 15 billion (US$ 158.8 million) Critical Mineral Recycling Incentive Scheme for industrial circularity and the development of localised raw material supply chains for the domestic electric vehicle component industry.
Announced by the Ministry of Coal and Mines at the Battery Summit 2026, the fiscal framework provides direct government support for the formalisation of end-of-life battery dismantling and the recovery of secondary raw materials.
The implementation of the incentive programme comes amid rising demand for energy storage and electric mobility solutions.
Industry projections indicate that India's annual demand for lithium-ion battery variants is expected to increase from 20 GWh in 2022 to 220 GWh by 2030, representing a compound annual growth rate of 50%. To meet this increase in demand, the country has relied on imported cells and raw materials, with annual lithium-ion battery imports rising from US$ 1.2 billion in FY2019 to US$ 4.7 billion in FY2025-26.
G. Kishan Reddy, Union Minister of Coal and Mines, stated at the summit that the next phase of India's clean mobility transition requires a battery ecosystem linked to the country's capacity to recover and process critical minerals domestically.
By incentivising the recovery of battery materials, including lithium, cobalt, and nickel, from spent cells, the policy is intended to reduce the manufacturing sector's dependence on imports. In parallel with the recycling initiative, the ministry is overseeing the development of four Critical Mineral Processing Parks and nine specialised Centres of Excellence focused on domestic value-addition activities.
On the primary extraction front, the government continues domestic mineral exploration and international resource acquisition activities.
Since 2015, the ministry has undertaken more than 570 critical mineral exploration projects and has auctioned 46 critical mineral blocks across the country, with nearly half of these auctions completed within the past 18 months. Internationally, the government has acquired lithium assets in Argentina to secure long-term raw material supplies for domestic cell manufacturers.
