Industry Odisha Bureau, Sep 25: India’s critical-mineral recycling push has attracted investment and 8.5 lakh tonnes of proposed capacity. Yet scrap collection, battery economics and verification remain unresolved. Whether plants deliver real mineral recovery depends on all three.
India’s recycling ambitions are running ahead of its waste supply chains. Companies are building plants to recover critical minerals from old batteries and electronics. Their proposals add up to 8.5 lakh tonnes of annual recycling capacity.
That number measures what plants can process, not what they will recover. The harder question is whether enough suitable scrap will reach them economically.
A ₹1,500-Crore Critical-Mineral Recycling Scheme
The government approved a ₹1,500-crore incentive scheme in September 2025. It targets critical minerals extracted from spent batteries, e-waste and other scrap. India imports much of the lithium, cobalt and nickel its new-energy industries need. New mines take years to find and develop.
The scheme has attracted strong industry interest. By April 2026, 58 companies had been declared eligible. Together they proposed roughly ₹5,000 crore of investment.
The original design envisaged about 2.7 lakh tonnes of recycling capacity. That capacity was expected to yield around 40,000 tonnes of critical minerals annually. The design assumed investment of roughly ₹8,000 crore. On September 21, the Ministry of Mines released a broader recycling concept paper.
Recycling Capacity Is Not Mineral Output
The 8.5 lakh tonnes is not a stockpile of lithium or cobalt. It is the volume of feedstock the plants could handle. That includes batteries, circuit boards, catalytic converters and other scrap. Only a fraction ends up as usable critical minerals.
A lithium-ion battery shows why. It can be discharged and shredded into black mass fairly easily. Lithium, nickel, cobalt or manganese must then be separated from that material. Those metals must reach purity high enough for industrial reuse.
That is why the Ministry of Mines excludes simple shredding from its subsidy. The incentive targets plants that actually separate and produce critical minerals. India could therefore add recycling capacity without matching gains in mineral recovery.
E-Waste Recycling Shows a Capacity Paradox
India’s e-waste sector already illustrates the gap. As of February 9, 2025, CPCB listed 322 registered e-waste recyclers. Their combined annual processing capacity was about 2.21 million tonnes.
CPCB estimated total e-waste generation in FY2024-25 at 1.398 million tonnes. Of that, 70.71% was reported as collected, dismantled, recycled or disposed through the system. On paper, registered capacity exceeded the entire estimated waste stream. Yet a sizeable share of waste still did not reach formal facilities.
Scrap Collection Is the Missing Infrastructure
Recycling plants sit in fixed locations. Scrap is scattered across homes, shops, offices, repair centres and factories. Old phones can lie unused in drawers for years. A broken appliance may pass through dealers, aggregators and dismantlers first.
India’s kabadiwallas and informal scrap traders already reach these sources. The formal system has nothing comparable yet.
A January 2026 study by The Energy and Resources Institute examined this weakness. NITI Aayog supported the study, though it does not represent NITI Aayog policy. TERI found India lacked an established nationwide template for e-waste collection. There was roughly one formal collection point per 4.9 lakh people.
The study also estimates the informal sector’s share of e-waste processing. One section puts it around 78%. Another cites about 62%. They come from different sources and cannot be compared directly with CPCB’s 70.71%. The policy task may be linking informal collectors to authorised recycling chains.
EPR Puts a Price on Battery Recycling
Battery waste has an added lever: Extended Producer Responsibility, or EPR. Under the Battery Waste Management Rules, producers and importers carry collection obligations. Registered recyclers face separate material-recovery targets.
For portable and EV batteries, that target rises from 80% in 2025-26. It reaches 90% from 2026-27. Automotive and industrial batteries carry a 60% target.
A CPCB portal registers producers and recyclers and records their transactions. Recyclers process waste and generate EPR certificates. Producers buy those certificates to meet their obligations. The system builds a compliance market, not a battery-retrieval service.
CPCB must set a trading band for these certificates. The floor is 30% of the applicable environmental compensation for non-compliance. The ceiling is 100%. Manufacturers want affordable compliance. Recyclers need enough revenue to collect, transport and process waste. Panasonic Energy India has told the environment ministry these compliance costs are material.
Battery Chemistry Shapes Recycling Economics
Not every battery is worth recycling on commercial terms. TERI estimates a 10,000-tonne lithium-ion plant’s operating cost at ₹294-350 per kilogram. That covers procurement, logistics, dismantling, processing and capital cost.
Nickel-manganese-cobalt batteries hold valuable nickel and cobalt. Lithium-cobalt-oxide batteries also carry valuable material. Lithium-iron-phosphate, or LFP, chemistry avoids expensive cobalt and nickel. That helps manufacturers but can make LFP scrap less attractive to recyclers.
The TERI study says LFP recycling can produce negative margins. It flags inadequate EPR pricing for low-value chemistries as a policy problem. It recommends chemistry-specific treatment.
Verifying EPR Certificates and Mineral Recovery
EPR works only if certificates reflect real recycling. Weak inspections can let non-compliant or idle recyclers issue spurious certificates. Those can depress prices and hurt recyclers bearing genuine costs.
TERI noted the GST Network and EPR portals lacked full invoice-level integration. CPCB has since required GST e-invoices for battery certificate transactions from July 1, 2026. Certificates backed by non-GST e-invoices after June 30 will be treated as false. This strengthens verification, but it falls short of full portal integration.
A recycling certificate does not prove battery-grade lithium, cobalt or nickel recovery. Waste compliance and the mines ministry’s recovery goal must eventually converge.
Scrap Imports Offer Supplementary Feedstock
India has also removed basic customs duty on lithium-ion battery scrap. Certain critical-mineral wastes gained the same relief. Cheaper imports can help plants run while domestic end-of-life volumes stay small.
Imported feedstock, however, does not fix domestic collection. India may run two parallel streams: imported scrap and domestically traced waste.
Recycled-Content Rules Create Demand
From FY2027-28, manufacturers must use minimum domestically recycled material. For portable and EV batteries, the requirement starts at 5%. It rises to 10% the following year, 15% in FY2029-30, then 20%.
Automotive and industrial batteries begin at 35%. That rises to 40% from FY2029-30. The policy therefore creates demand for recycled output. It does not guarantee supply or recycler profits.
From Recycling Plants to a Recycling Supply Chain
The investment wave proves willingness to build. It does not yet prove a working supply chain.
India faces three linked tasks. Discarded products must move from households and businesses into formal channels. Recycling economics must work for producers who pay and recyclers who process. Certificates must reflect real material movement and real metal recovery.
Plants alone cannot close India’s critical-mineral loop. Scrap owners, collectors, recyclers and manufacturers must be connected first.
