As India races to localize its electric vehicle (EV) supply chain, domestic recycler Recycle Karo, is making aggressive bets on producing high-purity battery components, driven by fresh government incentives aimed at reducing India’s dependence on critical mineral imports from China.
Prassann Daphal, CEO of Recycle Karo, outlined the company’s strategic expansion, which centers on high-value processing rather than merely increasing capacity for existing operations. “In the next three years, what we want to do is that we want to create a LFP cathode grade material, which can go directly into cell manufacturing,” Daphal stated.
This initiative involves establishing a completely new plant focused specifically on recycling the industrial waste generated by cell manufacturers, such as rejected cells and discarded organic chemicals to supply material suitable for immediate use. The company currently has a facility in Palghar near Mumbai, where it has expanded battery recycling capacity from 4,200 MT to 10,000 MT/year as of early 2025, with plans to scale to 50,000 MT by end-2025 using plasma-furnace and other hydrometallurgical technologies.
Recycle Karo is a registered lithium-ion battery recycler on the Central Pollution Control Board’s EPR portal, alongside Lohum, Attero, and LICO Materials. It supports producers in meeting mandated recycling targets (e.g. 4,200 MT battery and 15,000 MT e-waste). It has partnered with the likes of Bajaj Auto, Hero, Ather, Tata Motors for battery take-back and recycling initiatives, the company executives highlighted in their presentation.
The Context of Rapid EV Growth
The automotive industry provides the urgent backdrop for this investment. India is projected to become the world’s fourth largest EV manufacturer by 2030, necessitating an enormous increase in battery capacity. Demand for battery recycling is expected to surge from 2 GWh in FY2023 to 128 GWh by FY30, with market value increasing from $12.9 million (2023) to $463 million (2030) at a CAGR of 66.8%. Likewise, energy storage requirements are expected to jump from 218 GWh by 2030 and further to 362 GWh by 2030, which will require an investment of $40-50 billion by 2032, the company stated in its presentation.
“The cell manufacturers can directly get the cathode-grade material which they can use to directly manufacture the batteries which they are importing right now,” Daphal added, emphasizing the strategic importance of closing the loop.
Government Incentives as a Turbocharger
The Indian government’s ambitious Rs 1,500 crore incentive scheme for critical mineral recycling, approved on September 3, 2025, apparently seems to be a pragmatic recognition that the nation’s clean energy transition including that for automobiles hinges on not only scorching on new technologies, exploring abundant supplies of critical materials, but also on mastering the circular economy.
The scheme, operating under the National Critical Mineral Mission (NCMM) framework from fiscal year 2025-26 to 2030-31, targets the establishment of at least 270 kilo tonnes per annum of recycling capacity. This capacity is expected to yield approximately 40 tonnes of critical minerals annually, potentially addressing 30-40% of India’s domestic lithium demand by 2028.
For those uninitiated, The National Critical Mineral Mission (NCMM), launched in 2025, is India’s blueprint to secure domestic and global supply chains of critical minerals. NCMM targets 1,000 patents by 2030, with the creation of seven Centres of Excellence to drive breakthroughs in exploration and extraction.The scheme outline a proposed expenditure of Rs.16,300 crore and an expected investment of Rs.18,000 crore by Public Sector Undertakings (PSUs) and other stakeholders. The Ministry of Mines considers 30 critical minerals which are vital for India, such as cobalt, copper, lithium, nickel, cadmium, among others.
For electric vehicles, critical minerals such as lithium, nickel, and cobalt form an important part of the battery systems. With the government pushing for 30% EV penetration by 2030, the hunger for these resources is set to multiply. India faces a stark reality: without domestic recycling capacity, its green ambitions remain hostage to volatile global supply chains.
The scale of the challenge becomes evident in the numbers: For instance, India’s battery recycling market, valued at $152.68 million in 2025, is projected to reach $235.57 million by 2030 at a CAGR of 9.06%, as per a report by Mordor Intelligence. Yet recyclers collected only 2,570.26 metric tonnes of lithium-ion waste batteries from electric vehicles in the last three years, as per government records until April 2025. This is just a fraction of what will emerge as the current generation of EVs reaches end-of-life.
The subsidy package is designed with both upfront investment support and operating performance incentives. On the investment side, companies setting up new capacity can claim a 20% subsidy on capital expenditure covering plant, machinery, equipment and related utilities, provided production starts within the stipulated time frame.
To encourage sustained performance, the scheme also includes an operating expenditure-linked incentive. This will be calculated on incremental sales made over the base year of FY 2025-26. The payout is staggered, with 40% of the eligible subsidy being released in the second year and the remaining 60% released in the fifth year, running across FY 2026-27 to FY 2030-31, subject to a company crossing the specified sales thresholds.
To ensure wider participation and prevent concentration of benefits, an overall cap has been introduced. Large entities can claim up to Rs.50 crore in combined Capex and Opex subsidies, while smaller entities have a ceiling of Rs.25 crore. Within this, the Opex subsidy itself has a sub-limit of Rs.10 crore for larger players and Rs.5 crore for smaller ones.
Homegrown Pricing Power
Furthermore, Daphal voiced concern regarding India’s dependence on global exchanges for setting the price of critical minerals, noting that the cost of essential metals is currently determined by the London Metal Exchange as well as the Shanghai Metal Exchange.
To mitigate this vulnerability and foster domestic control over the battery supply chain, Daphal proposed that India explore creating its own index for critical materials. This effort would aim to reduce dependency on existing foreign pricing mechanisms, thereby allowing costs to be lowered through improved sourcing models and enhanced efficiency.
Daphal suggested that this new index could be developed through international cooperation, particularly with nations supporting India’s critical mineral goals. He linked this pricing mechanism strategy to broader efforts, including pursuing international partnerships like establishing off-take agreements for scrap or the raw material, which would collectively help reduce the overall cost of critical minerals. “So, these are all things we need to check if we can develop a new index itself like between US and India or whoever is supporting this country supporting this mission critical mineral mission where the dependency should be reduced and the prices can be taken down with improved efficiency and sourcing models.”