From the batteries that power electric vehicles (EVs) to the chips in our smartphones and systems essential for securing our borders, critical minerals have become the linchpins of the twenty-first century economy. Their significance is only growing as the countries move towards meeting net-zero goals, digitise their economies and upgrade their defence capabilities, and India is no exception. The Indian government has set an ambitious target of 30% EV penetration by 2030, net-zero emission target by 2070, and is investing heavily in indigenous defence industries while rapidly digitising its economy. To support this transition, the Indian Government has identified 30 critical minerals that are essential for meeting these ambitious aims. Although identification is the first step, challenges remain, a major one being the accessibility to these critical minerals. The overwhelming dominance of China in the critical mineral supply chain, along with the geopolitical leverage it can apply, place India in a tight spot. The Indian Government, in early 2025, launched the National Critical Mineral Mission (NCMM), to establish a robust framework for self-reliance in critical minerals and recently, the Union Cabinet has approved a 1500 crore Incentive Scheme to develop recycling capacity in India for the separation and production of critical minerals from secondary sources such as e-waste, lithium-ion batteries, catalytic converters, etc. The tenure of the scheme is for six years, from FY2025-2026 to FY2030-31. It is intended to achieve at least 270 kilotons of recycling capacity, resulting in an annual critical mineral production of approximately 40 kilotons, bringing about 8000 crore worth of investments and the creation of around 70,000 direct and indirect jobs.
Recycling Critical Minerals: Essential for Resilient Supply Chain and Circular Economy
Recycling Critical Minerals is not just an economically sound strategy, but a strategic imperative for India’s long-term growth and security. India currently boasts about 5.6 million EVs, and the share of EVs in the overall vehicle market has seen a steady growth. As per Fortune India, India’s EV market is expected to grow to a value of about USD 117.2 billion in 2032 from USD 23.8 billion in 2024. The increase in the adoption of EVs in the Indian market will lead to more demand for lithium, cobalt and nickel, as lithium enables high energy density, cobalt ensures safety and stability, whereas nickel helps boost capacity and lower costs. China dominates the supply chain of all three critical minerals needed for EVs. Although the government has prioritied both domestic exploration and has been working with Australia on five target projects (two for lithium and three for cobalt), has made investments in Argentina and is in talks with Chile for joint exploration of lithium deposits along with looking at bilateral opportunities in African countries. Recycling is imperative as it can provide a valuable secondary source for the supply chain and helps import-dependent countries stave off supply chain disruptions. Therefore, it is imperative that, to meet its EV ambitions, India invest in recycling technology.
The achievement of India’s net-zero target by 2070 hinges on a massive scaling up of renewable energy. The Indian government has targeted the capacity to generate 500GW of renewable energy by 2030. To achieve this target, the Indian government will require solar panels, wind batteries and grid-scale batteries for which rare earth elements (REEs), copper, lithium, and nickel are needed. Without reliable access to these minerals, India risks missing its clean energy objectives; therefore recycling becomes essential as it will not only reduce import dependence but also allow for the recovery of critical minerals needed for energy generation from end-of-life solar panels, turbine magnets, and storage batteries. By recycling, India will be on the path towards a circular economy where valuable resources are reintroduced into the production cycle, leading to a minimisation of waste through more efficient resource management.
India’s growing defence sector and rapidly expanding digital economy also increase the importance of dependable supply chains in critical minerals. The manufacturing of advanced fighter jets, missile systems, drones, and naval platforms requires specialised alloys and rare earth magnets, while semiconductors, data centres, 5G infrastructure, and AI technologies rely heavily on gallium, germanium, and rare earths. China’s dominance of the processing and refining stages of these inputs gives it critical leverage that it applies on other states from time to time. Therefore, building a recycling capability for rare earth magnets, chips from discarded electronics, and alloys from defence-grade equipment will be crucial to sustain India’s twin ambitions of self-reliance in defence and leadership in the digital age.
Challenges that need to be addressed to leverage the scheme successfully
Although the government has taken important steps to secure India’s critical mineral supply chain and move towards a circular economy, challenges need to be addressed to make the scheme truly successful. Firstly, India needs advanced separation and refining technologies to be able to recycle those strategic minerals. Secondly, the collection and segregation of e-waste and broader end-of-lifecycle products is inefficient and fragmented due to the domination of the informal workforce in these sectors. This results in a low recovery rate and environmental degradation. India needs to develop a skilled workforce to ensure safe and sustainable recycling standards and forge technical partnerships to that end. Lastly, India needs to provide policy certainty and robust financial mechanisms.
Conclusion
India is moving towards developing a sustainable and reliable critical mineral supply chain that meets its economic and strategic ambitions through overseas partnerships, domestic exploration and lighter regulations; however, recycling offers a pathway towards a circular economy and resilient mineral supply chains. If India can overcome the technological and institutional challenges, recycling will not only ensure India’s critical mineral supplies and meet its clean energy goals, but will also reinforce the country’s strategic autonomy.
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