India Has Approved 8.5 Lakh Tonnes of New Capacity to Recycle E-Waste and Battery Scrap. The Hard Part Is Finding the Scrap.

On 9 October 2026, Mines Secretary Keshav Chandra said a policy for building national stockpiles of critical minerals should be final in about a month. The policy will set out when stocks are released, how much, and to whom. Reports the next day said the government is weighing reserves that cover up to six months of demand, against an earlier idea of two months focused mainly on rare earths.

The stockpile is one part of a bigger push. The other part is already under way, and it matters more to anyone who handles e-waste or used batteries. Under the Incentive Scheme for Promotion of Critical Mineral Recycling, which has an outlay of ₹1,500 crore, the Ministry of Mines has cleared 58 companies as eligible. Together they have pledged about 850 kilo tonnes a year of recycling capacity, or 8.5 lakh tonnes, and nearly ₹5,000 crore of investment.

When the Union Cabinet approved the scheme on 3 September 2025, it expected the incentives to create at least 270 kilo tonnes of annual recycling capacity. The pledges are more than three times that. (This is our own comparison of the 850 kilo tonnes pledged against the 270 kilo tonnes the Cabinet expected.)

Plants can be built in two or three years. Steady, well-sorted, properly documented scrap is harder to find, and that is where the next few years will be decided.

The numbers at a glance

What the scheme pays for, and what it does not

The scheme sits under the National Critical Mineral Mission. It covers three kinds of feedstock: e-waste, used lithium-ion batteries, and other scrap such as catalytic converters from end-of-life vehicles. It covers new plants as well as expansion or modernisation of existing ones. One-third of the outlay is set aside for small and new recyclers, including start-ups.

The money comes in two parts:

• Capital subsidy: 20% of the cost of plant, machinery, equipment and related utilities, if production starts within the set timeframe. The subsidy is reduced after that.
• Operating subsidy: an incentive on extra sales over the 2025-26 base year, paid 40% in the second year and 60% in the fifth year, once a set level of incremental sales is reached.

Each company can receive at most ₹50 crore if it is large and ₹25 crore if it is small. Within that, the operating subsidy is capped at ₹10 crore and ₹5 crore respectively.

The most important rule for the scrap trade is this one. Incentives go only to the part of the chain that actually extracts critical minerals. Units that only produce black mass, the crushed powder left after shredding batteries, do not qualify.

Approval is not payment. The ministry has said the scheme now moves to project execution, and money will be released based on capacity actually built and production actually started. The application window ran from 2 October 2025 to 1 April 2026 and is now closed.

There is also a simple arithmetic limit. Spread evenly, ₹1,500 crore across 58 companies works out to about ₹26 crore each, roughly half the ceiling for a large company. (This is our own estimate, dividing the outlay by the number of approved companies. Actual payouts will depend on what each company builds and sells.) The subsidy helps, but most of the pledged ₹5,000 crore will have to earn its return from recovered metal, and that depends on feedstock.

India already has more recycling capacity than e-waste

The scrap problem is not new. It is already visible in e-waste.

According to Central Pollution Control Board (CPCB) figures given to Parliament, India generated over 13.97 lakh tonnes of e-waste in 2024-25, and over 11.59 lakh tonnes was recycled. In 2023-24, the figures were 12.54 lakh tonnes generated and 7.78 lakh tonnes recycled. For 2025-26, the government told the Lok Sabha on 9 March 2026 that 14.15 lakh tonnes had been generated so far, of which 9.79 lakh tonnes had been recycled.

Now compare that with capacity. In February 2025, the government told the Rajya Sabha that 322 recyclers were registered with the CPCB, with a combined processing capacity of 22.09 lakh tonnes a year. That is about 1.6 times the e-waste the country generated in 2024-25. (This is our own comparison of registered capacity with the CPCB generation estimate. Generation is estimated from producers' sales and product life, so it is a model figure, not a count at the kerb.)

The 8.5 lakh tonnes pledged under the new scheme is not all for e-waste. It spans batteries, e-waste and industrial scrap, and it targets metal extraction rather than dismantling. But it draws on the same streams. In practice, it means more registered buyers chasing the same circuit boards, the same laptop and phone batteries, and the same EV packs.

Batteries: capacity is arriving before the scrap

For lithium-ion batteries, the gap between capacity and supply is even sharper, because the big wave of used EV batteries has not arrived yet.

In an interview published on 7 October 2026, the chief executive of battery recycler MiniMines said collection is the tightest gap in India's battery recycling system. Many end-of-life batteries still pass through informal channels and never reach a proper recycler. He said scrap from cell factories is easier to secure, while batteries from used EVs, phones and laptops are the harder part. Recyclers are now placing plants near gigafactories to secure that factory scrap.

The rules are pushing the same way. Under the Battery Waste Management Rules, 2022, recyclers of EV and portable batteries must meet recovery targets that rise from 70% in 2024-25 to 80% in 2025-26 and 90% from 2026-27, measured on the dry weight of the battery and adjusted for hazardous content that cannot be recovered. Producers must also use recycled material in new EV batteries, starting at 5% in 2027-28 and rising to 20% by 2030-31. The rules have been amended several times since 2022, so recyclers should check the current notified figures.

Lithium has halved, and that changes the price of battery scrap

The new plants are coming up just as the metal they recover has lost value. On 12 October 2026, China's most traded lithium carbonate futures contract, on the Guangzhou Futures Exchange, fell 11.8% in one day to 104,740 yuan a tonne, its lowest since 17 December 2025. That is about half its 13 May 2026 peak of 209,880 yuan. Concerns about demand in 2027, and a deal between China and the European Union that could cut Chinese hybrid car exports to Europe, drove the fall.

What a recycler can pay for battery scrap follows the value of the metals inside it. Our September scorecard already showed lithium down by a quarter and black mass prices slipping week after week. Batteries whose value comes mostly from lithium, such as lithium iron phosphate (LFP) packs, feel the fall more than packs that also contain nickel and cobalt.

For collectors this is a mixed picture. More buyers should mean more competition for scrap. Lower lithium prices mean each buyer can afford to pay less per kilo. The aggregators who do well will be the ones who can offer volume, sorting and paperwork that a large, subsidy-backed plant needs to keep running.

Where the stockpile fits

The stockpile policy has not been published, so its details are not yet known. What the Mines Secretary has said is that release rules, quantities and eligible recipients are being worked out carefully. The National Critical Mineral Mission, which the stockpile and the recycling scheme both sit under, includes recovery from secondary sources such as e-waste and used batteries.

The open question for recyclers is whether a government stockpile will buy refined lithium, cobalt, nickel or rare earths produced in India, or only imported material. If domestic recycled output can qualify, it would give the 58 approved plants a second buyer alongside battery and electronics makers. That is worth watching when the policy comes out.

What this means for you

Kabadiwalas and e-waste collectors: More registered recyclers will be competing for the same material. Keep circuit boards, phones, laptops and batteries separate rather than selling mixed loads, and ask more than one registered buyer for a rate. Our 7 October report on the government's e-waste drive explains why proper receipts matter.

Aggregators and traders: Your position is getting stronger. A plant that has pledged capacity under the scheme only earns its operating subsidy if its sales grow, so steady feedstock is worth more to it than a one-off lot. Offer consistent volumes, sorted by type and battery chemistry, with GST invoices and EPR-ready documents, and negotiate supply contracts rather than spot sales.

Recyclers, approved or not: The subsidy is capped and paid only after production starts, and only for metal extraction. If you only make black mass, you are outside the scheme, and your natural buyers are now the approved extractors. Lock in collection partnerships with dealers, service centres, bulk consumers and cell makers before the new capacity comes online and competes for the same scrap.

Battery and electronics producers with EPR targets: Recovery targets for EV and portable batteries have reached 90% from 2026-27, and recycled content in new EV batteries starts in 2027-28. Securing a domestic recycling partner with real collection now is easier than chasing certificates later.

What to watch

1. Around mid-November 2026: The critical minerals stockpile policy, which the Mines Secretary said on 9 October 2026 would come in about a month. Watch whether domestically recycled material can be supplied to it.
2. Plant start-ups under the scheme: Capital subsidy is paid only when production starts within the set timeframe, so announcements of commissioned plants will show which of the 58 pledges are real.
3. Lithium prices: Whether China's lithium carbonate futures stay near 100,000 yuan a tonne or recover will decide what battery scrap is worth in the coming months.
4. 2027-28: The first year in which producers must use recycled content in new EV batteries, starting at 5%.

The bottom line

India has moved faster on recycling capacity than on recycling supply. Fifty-eight companies have pledged three times the capacity the government hoped for, and registered e-waste recyclers can already process more than the country officially generates. Plants will not be the bottleneck. Collection will. For the collectors and aggregators who can deliver steady, sorted and well-documented e-waste and battery scrap, that shift puts the bargaining power on their side.