DGFT Bans Lithium-Ion Battery Black Mass Exports to Power ₹1,500 Crore Recycling Mission

India just locked down its EV battery scrap.

In an immediate policy shift, the Directorate General of Foreign Trade shut the door on foreign shipments of lithium-ion battery black mass. The Department of Commerce reclassified black mass under ITC(HS) Code 85491400, moving its export standing from 'Free' straight to 'Prohibited'. Transitional arrangements under Para 1.05 of the Foreign Trade Policy 2023 will handle consignments caught mid-stream, but the directive is absolute: until further notice, the powdery residue stays on Indian soil.

The material looks like fine coal dust. Yet it holds the building blocks of the electric mobility transition—concentrated volumes of lithium, cobalt, nickel, and manganese recovered from shredded, end-of-life cells and factory scrap. For an EV buyer or industry watcher, the math is simple: without local processing of these minerals, every battery pack assembled in India remains tied to unpredictable overseas raw material cartels.

Market Context: Indian battery refiners have spent millions setting up mechanical separation and chemical processing lines, only to run their plants below nameplate capacity. In an absurd trade loop, raw domestic battery scrap was leaving Indian ports while local processing facilities paid hefty premiums to import overseas feedstock.

Halting the Feedstock Drain on Domestic Refiners

The export shutdown fixes that structural bottleneck. According to the Ministry of Commerce and Industry, domestic recycling and critical mineral refining capacity had scaled up rapidly across industrial corridors, but units sat idle because raw feedstock vanished into export channels.

By locking scrap inside domestic borders, the government intends to force that volume directly into local hydrometallurgical and refining units. It stops the flight of foreign exchange. More importantly, it secures refined battery precursors for domestic cell makers assembling packs for electric two-wheelers, passenger cars, and grid-scale energy storage projects.

Feeding the ₹1,500 Crore Urban Mining Scheme

Primary mining for lithium and cobalt takes years to explore, permit, and extract. Urban mining—harvesting those identical elements from dead electronics, factory rejects, and spent packs—yields usable minerals in weeks.

The export prohibition dovetails directly with the National Critical Mineral Mission. In September 2025, the Union Cabinet cleared a ₹1,500 crore Incentive Scheme for Critical Mineral Recycling to back secondary extraction facilities. Retaining domestic black mass guarantees those subsidized separation plants actually have materials to feed into their extraction reactors as capacity comes online.

Several major global economies have already clamped down on outward shipments of battery scrap to safeguard their own industrial manufacturing bases. India has now matched their playbook. Officials linked the immediate ban to environmental compliance as well, steering discarded cells away from unorganized dumping and straight into formal, traceable processing networks. The immediate focus now shifts to domestic recyclers, who must prove they can absorb this trapped supply and feed high-purity minerals straight back to battery manufacturing lines.