Centre Announces Rs 1,500 Crore Battery Recycling Scheme To Boost EV Supply Chain

The Union Government has announced a Rs 1,500 crore Critical Mineral Recycling Incentive Scheme aimed at strengthening India's electric vehicle (EV) supply chain and reducing dependence on imported battery materials. The initiative was unveiled by the Ministry of Coal and Mines during the Battery Summit 2026.

The scheme focuses on promoting industrial circularity by incentivising the recycling of end-of-life lithium-ion batteries. It seeks to formalise battery dismantling processes and enable the recovery of key materials such as lithium, cobalt, and nickel. These critical minerals are essential for EV battery production and are currently sourced largely through imports.

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The move comes at a time when India's demand for lithium-ion batteries is witnessing rapid growth. According to industry estimates, annual demand is expected to increase from 20 GWh in 2022 to 220 GWh by 2030, reflecting a sharp rise driven by electric mobility and energy storage requirements. This surge has also led to a significant increase in imports, with lithium-ion battery imports rising from USD 1.2 billion in FY2019 to USD 4.7 billion in FY 2025-26.

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Union Minister of Coal and Mines G. Kishan Reddy highlighted the importance of building a resilient domestic battery ecosystem. He noted that strengthening recycling capabilities will play a key role in securing critical raw materials and reducing supply chain vulnerabilities. The scheme is expected to support domestic manufacturers by lowering reliance on imported resources and improving cost efficiency over time.

In addition to the recycling initiative, the government is also investing in upstream and midstream infrastructure. Plans are underway to establish four Critical Mineral Processing Parks and nine Centres of Excellence to enhance technological capabilities and value addition within the country.

Efforts to secure raw materials are also being expanded globally and domestically. Since 2015, over 570 exploration projects have been undertaken, and 46 critical mineral blocks have been auctioned across India. The government has also initiated steps to acquire lithium assets overseas, including in Argentina, to ensure long-term supply security.