India’s electric vehicle (EV) sector is expanding rapidly, and with it, EV battery recycling is emerging as both a major challenge and a significant opportunity. This not only carries potential for environmental sustainability but also paves the way for economic growth. With India targeting net-zero emissions by 2070, developing a robust EV battery recycling ecosystem has become a necessity.
Let’s explore India’s battery recycling industry and see where the opportunities lie.
Current State of India’s EV Market
India’s EV market is witnessing exceptional growth. According to Fortune Business Insights, in 2024, the market was valued at around USD 23.38 billion and is projected to reach USD 117.78 billion by 2032. This reflects a CAGR of 22.4%, placing India among the fastest-growing EV markets globally.
India’s EV market is expected to grow at a CAGR of 22.4% to USD 117.78 billion by 2032.
In FY25, 20,37,831 EVs were sold in India, marking a 15.68% rise from 17,61,520 units in FY24. In FY23, EV sales stood at 12,46,634 units, a clear sign that adoption is gaining momentum.
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Lithium-Ion Batteries: Demand and Recycling Opportunities
As the EV market expands, the importance of battery recycling is growing rapidly. Proper recycling is essential not only for environmental protection but also for recovering valuable metals such as lithium, cobalt, and nickel.
According to NITI Aayog, India’s total lithium-ion battery demand across sectors is expected to touch 600 GWh during 2022–2030. Of this, nearly 128 GWh will be available for recycling by 2030, with EVs accounting for an estimated 46% (59 GWh).
Government Initiatives
The Government of India has introduced the Extended Producer Responsibility (EPR) framework under the Battery Waste Management Rules, 2022. This places legal obligations on manufacturers, importers, and recyclers.
The policy outlines phased recovery targets for lithium-ion batteries used in EVs — from 70% in FY25 to 90% in FY27.
For four-wheeler EV OEMs, 70% of the batteries introduced in FY23 must be recovered by 2030–31, as per EPR guidelines. Targets have also been set year-on-year up to 2035–36.
In the Union Budget 2025–26, the government announced Basic Customs Duty (BCD) exemptions on cobalt powder and waste, lithium-ion battery scrap, lead, zinc, and 12 other critical minerals. A budget of Rs 410 crore (USD 47.20 million) was allocated for the National Critical Minerals Mission. Additionally, funding for the Production-Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) battery storage was raised from Rs 15.42 crore to Rs 155.76 crore.
Environmental and Economic Challenges
Lithium-ion batteries contain nickel, cobalt, manganese, and lithium. If not handled properly, these metals can pose severe environmental risks. Discarded in landfills, they can leach into soil and water, harming ecosystems and human health. Heavy metals such as cobalt and nickel are carcinogenic and linked to respiratory, neurological, and organ-related health issues.
On the economic front, these metals are expensive and difficult to source. A well-established recycling industry could allow India to recover up to 95% of lithium, cobalt, and nickel from used batteries, reducing dependence on costly imports from China, Japan, and South Korea.
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What’s Next?
According to Down to Earth, by 2030 India will need to recycle nearly 1.2 million end-of-life EV batteries annually. This figure could rise to 14 million per year by 2040. Currently, India has a recycling capacity of only about 2 GWh, while waste EV battery volume is projected to hit 58.88 GWh by 2030.
The rapid adoption of EVs, coupled with rising environmental concerns, makes battery recycling a critical priority. Lithium-ion battery demand is expected to reach nearly 600 GWh by the end of this decade. Alongside this, the government aims to have 80 million EVs on Indian roads by 2030.
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