Budget 2026-27: Industry seeks push to unlock critical minerals from tailings and recycling

New Delhi: India’s accelerating transition toward clean energy, electric mobility, semiconductors and advanced manufacturing is driving a sharp rise in demand for critical minerals such as lithium, cobalt, nickel, rare earths and vanadium, industry bodies and recyclers said ahead of the Union Budget 2026.

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While India’s primary geological reserves remain limited, large volumes of potentially valuable critical minerals are locked in mine tailings, overburden, fly ash, red mud and other industrial waste streams, according to the Federation of Indian Chambers of Commerce and Industry (FICCI).

Need to operationalise National Critical Minerals Mission

FICCI said the National Critical Minerals Mission (NCMM), approved in 2024 with an outlay of Rs 16,300 crore, provides a strong strategic foundation, but now requires a focused operational framework to accelerate recovery of critical minerals from secondary sources.

The industry body pointed to international models such as Canada’s Critical Minerals R&D and Demonstration Programme and Australia’s Queensland Collaborative Development Program, which support technology-led pilots, tailings reprocessing and near-mine demonstrations to de-risk mineral recovery technologies.

While NCMM includes provisions for recovering minerals from tailings and waste, and Rs 1,500 crore has been earmarked for recycling from e-waste, battery scrap and end-of-life vehicles, FICCI said India lacks fast, structured, cluster-based execution mechanisms seen in other jurisdictions.

Proposal for dedicated tailings recovery programme

To bridge this gap, FICCI recommended launching a dedicated India Critical Minerals Tailings Recovery Programme under NCMM, treating tailings recovery as a stand-alone strategic priority.

The proposed framework includes a dual funding window — one for quick, on-site field pilots at active and legacy mine sites, and another for technology demonstration projects focused on hydrometallurgy, bioleaching and advanced mineral separation. FICCI also called for collaboration among miners, PSUs, startups, academic institutions, CSIR and IIT laboratories, and state agencies.

The body further urged creation of a geo-referenced National Tailings and Mine Waste Atlas to map mineral potential, guide investments and improve transparency, along with regulatory clarity on royalties, revenue sharing, third-party access and approvals to attract private capital.

GST, customs duty changes sought

Industry players also flagged fiscal measures expected in Budget 2026 to support domestic recycling and processing capacity.

Rajat Verma, Founder and CEO of LOHUM, said the industry expects GST on battery scrap and mineral-bearing waste to be reduced to 5% to accelerate recycling as a strategic source of critical minerals.

Verma also called for imposition of basic customs duty on intermediates such as nickel and cobalt sulphates to prevent import-led under-utilisation of domestic capacity, along with targeted anti-dumping measures and incentives for overseas exploration backed by political risk insurance.

Recycling seen as material security lever

Nitin Gupta, Co-Founder and CEO of Attero, said Budget 2026 presents an opportunity to position recycling and rare earth recovery as core enablers of long-term economic and industrial self-reliance.

“Recycling today is not only about sustainability, it is about material security,” Gupta said, pointing to India’s heavy dependence on imports for lithium, cobalt, nickel and rare earths used in clean energy, electronics and defence.

He said recognising recycling and advanced materials recovery as industrial infrastructure, easing access to long-term capital and providing targeted incentives for deep-tech innovation could help Indian startups scale globally and strengthen domestic supply chains.

Industry looks for execution-focused Budget

Taken together, industry bodies and recyclers said Budget 2026 could play a decisive role in converting India’s mission-level intent on critical minerals into on-ground execution, by combining fiscal incentives, regulatory clarity and operational programmes to unlock secondary mineral resources and support the country’s energy security and manufacturing ambitions.

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