Advancing the circular economy of e-waste and lithium-ion batteries in India

India's clean-energy and digital transition is driving exponential growth in the use of lithium-ion batteries and the generation of electronic waste. Yet despite a gradually expanding formal recycling ecosystem, most battery scrap and e-waste is still handled by an unregulated informal sector using unscientific methods, producing economic losses, environmental contamination and public-health risks. Advancing a circular economy framework for these waste streams has become a national priority - not only for environmental reasons but because it bears directly on India's energy security and its dependence on imported critical minerals.

A maturing, but incomplete, policy regime

Two instruments anchor the legal framework: the E-Waste (Management) Rules, 2022 and the Battery Waste Management Rules, 2022. Both are built on Extended Producer Responsibility (EPR): producers must register with the Central Pollution Control Board (CPCB) and meet collection, recycling and refurbishment obligations, discharged through tradeable EPR certificates. The Battery Waste Management Rules, 2022 go further than most Indian waste regimes, prohibiting landfilling and incineration of waste batteries and mandating a minimum use of domestically recycled materials in new batteries - an early move towards closing the material loop rather than merely managing disposal.

The architecture is sound, but the market it creates is still thin. EPR coverage in e-waste recycling is effectively limited to gold, copper, iron and aluminium, which suppresses investment in recovering the many other valuable and critical minerals that modern electronics contain. Weak enforcement lets spurious or non-operational recyclers distort EPR markets through fraudulent certification, undercutting compliant operators. And because certificate revenue is realised only after verification rather than at the point of collection, genuine recyclers face a working-capital squeeze that favours the informal sector the rules were meant to displace.

The scale of that informal dominance is the central problem. A large share of end-of-life electronics and battery scrap is collected, dismantled and processed outside the formal system, often using open burning and acid leaching that destroy recoverable value and release toxic residues into soil, water and air. Weak monitoring, and compliance requirements that feel disproportionate to a small aggregator, keep these operators outside the net - so material that should feed registered recyclers, and the EPR certificates that fund them, leaks out of the formal economy. Any credible circular economy strategy therefore has to make formalisation easier and more attractive than the status quo.

Lithium-ion: from black mass to strategic reserve

For lithium-ion batteries the opportunity is sharper. Mechanical and hydrometallurgical recycling converts end-of-life cells into black mass and then recovers cobalt, nickel, lithium, copper and other metals as salts. In January 2025 the CPCB issued a Standard Operating Procedure, notified under Rule 9 of the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016, prescribing the facilities, authorisation and compliance requirements for utilising black mass - providing, for the first time, a clear regulatory pathway for scientific battery recycling.

Fiscal policy is now pulling in the same direction. The Union Budget 2025-26 granted full basic customs duty exemption on lithium-ion battery scrap and a range of critical-mineral wastes, and extended duty relief to capital goods used in battery manufacturing, to improve the availability of secondary raw materials and lower the cost of clean-technology production. Recovered domestic material directly reduces exposure to volatile global supply chains for the critical minerals that underpin India's electric-vehicle and energy-storage ambitions and its energy security.

India need not invent the playbook. Global recyclers already run integrated pyrometallurgical and hydrometallurgical operations at scale, and the international direction of travel is towards hydrometallurgy for its higher recovery rates and lower emissions. The value for India lies in adapting these proven models to local feedstock, chemistries and cost structures, and in ensuring the standards, testing and traceability that let recovered material re-enter the manufacturing supply chain with confidence.

Closing the gaps

The reform agenda is coherent. On e-waste, EPR coverage should expand beyond four metals to the fuller basket of high-value recoverables. On batteries, priorities include integrating the EPR portal with GSTN for seamless invoice verification, tightening enforcement to track accountability across the value chain, notifying chemistry-wise metal composition, and updating BIS certification (IS 16046) to require chemical-composition testing of recycled cells. Purity standards, third-party unit audits, and additional incentives under the Production Linked Incentive scheme for Advanced Chemistry Cells would all raise the uptake of recycled content.

Equally important is the human and collection layer: dedicated recycling curricula in technical institutions, certification pathways and Common Facility Centres to bring informal clusters into safe, efficient processing, and simplified registration and fee waivers to make formalisation a just transition. At the consumer interface, awareness campaigns, product-level recycling information and expanded collection networks run by urban local bodies in public-private partnership would lift formal collection rates.

What it means for business

For producers, importers and recyclers, the practical exposure is already live. Obligated entities must navigate two parallel EPR regimes, hold defensible CPCB registrations, and manage the integrity risk of the EPR certificates they buy - fraudulent or low-quality certificates are a compliance and reputational liability, not a cheap shortcut. Recyclers must align with the black mass SOP and BIS testing as they crystallise. And for investors, the combination of customs relief, Production Linked Incentive support and a tightening enforcement regime is turning battery recycling and e-waste recycling from a marginal activity into a strategic, and increasingly bankable, part of the clean-energy value chain. The firms that treat circular economy as a compliance-and-strategy question now, rather than a disposal cost later, will be best placed as the rulebook hardens.