Export restrictions as a tool of industrial policy: critically evaluate with reference to India's prohibition on exporting Li-ion Battery Black Mass.

Export restrictions keep raw materials inside a country so that its own processors can earn the value from them. On 10 November 2026, DGFT Notification No. 49/2026-27 moved Lithium-Ion Battery Black Mass from "Free" to "Prohibited" [1]. Black Mass is the powder left after shredding spent batteries, and it contains lithium, cobalt, nickel and manganese. The ban is a sound use of the tool, but it will work only if refining capacity and safeguards keep pace with it.

Merits: why the ban makes sense

• Feedstock assurance: India's recycling capacity was under-utilised because Black Mass was being exported while some recyclers had to import material [1].
• Policy pairing: the ₹1,500 crore Incentive Scheme for Critical Mineral Recycling (Sept 2025) funds only actual mineral extraction, not units that only make Black Mass [2]. The ban and the subsidy together push the industry from shredding to refining.
• Strategic security: the ban lowers import dependence and forex outgo on minerals needed for EVs, ACC batteries and energy storage. It complements the National Critical Mineral Mission [1].
• Circular economy: urban mining reduces reliance on primary mining [1].

Limitations: where the tool falls short

• Timing mismatch: the ban took effect immediately, but the scheme's target of about 270 kt of capacity is due only by FY 2030-31 [2]. Until then, Black Mass may pile up or sell at distress prices.
• Single-buyer pricing: shredders lose export buyers and get no subsidy. Lower prices could cut payments to collectors under the EPR-based Battery Waste Management Rules, 2022 [3]. Batteries could then drift to informal scrap dealers.
• Pollution shift: Black Mass is hazardous [1]. If domestic enforcement is weak, the ban moves the pollution into Indian communities.
• WTO exposure: in China – Rare Earths (DS431), China's Article XX(g) conservation defence failed because its export curbs were not matched by limits on domestic use [4]. India's open-ended ban, in force "until further orders", has the same weakness.
• Leakage: HS 85491400 also covers spent cells, but the notification names only Black Mass [1]. Whole batteries could therefore be exported before they are shredded.

Overall, the ban is a well-designed nudge: it adds feedstock assurance to capacity subsidies. However, a ban alone does not create industrial capability. A review linked to capacity is needed, with a shift to "Restricted" licensing for surplus material if refining lags. CPCB and SPCB audits of recyclers, and a stronger collection system, would also help. With these steps, the ban can deliver Aatmanirbhar critical-mineral security and SDG 12's responsible production while staying defensible at the WTO.