Technician use soldering iron to solder metal and wire of lithium-ion rechargeable battery. Repair module of Li-ion battery. Engineer hand holds soldering iron and tin-lead to solder electronic board. | Photo Credit: Fahroni

The Budget move to allow duty-free lithium-ion battery scrap will enhance availability of raw material and boost fresh investment in recycling facilities.

Sanjay Mehta, President, Material Recycling Association of India (MRAI) said the Indian recyclers can now import a broader range of black mass and battery waste at lower landed cost and scale-up capacity faster.

This will give an impetus for stronger incentives to invest in processing technologies that extract lithium.

A duty waiver will encourage use of imported scrap as feedstock for domestic recycling rather than exporting these wastes or depending solely on freshly mined minerals.

It will help recyclers build end-to-end recovery capabilities, increase output of refined critical minerals locally and contribute to a circular supply chain that feeds into EV and electronics manufacturing, he said.

Establishing critical mineral facilities in Odisha, Kerala, Andhra Pradesh and Tamil Nadu will bolster the mineral supply chain and the recycling industry.

It will also cut down dependence on critical mineral imports.

Setting up a dedicated rare earth corridor with focus on full value chain from extraction to advanced manufacturing will support hitech manufacturing such as electric vehicles, wind turbines, smartphones and precision electronics.

This will curtail India’s reliance on China, which has tightened export controls on critical minerals that had impacted the country’s domestic supply chain, said Mehta.

The focus on 17 rare earth minerals will strengthen India’s ‘Criticals Minerals Strategy’ right from mining, processing, research to manufacturing that will add fresh investments into the sector and open up opportunities for ancillary sectors including material recycling, he said.

The focus on critical minerals, carbon capture and utilisation marks a decisive push into the energy‑transition future.

The Budget has also proposed customs duty cuts and exemptions on critical mineral processing equipment that will help domestic supply chain development for solar, batteries, EVs and renewables, he added.

An enhanced support for BESS (battery energy storage systems) with higher viability gap funding and planned incentives will be important for integrating variable solar into the grid effectively.

The Budget has proposed to increase TCS from 1 per cent to 2 per cent on scrap and minerals sale might increase operational cost marginally, said MRAI.

Published on February 2, 2026