The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a Rs 2,814 crore critical mineral processing scheme to expand domestic capacity for lithium and nickel.
The scheme will run from FY27 to FY31 and provide capital expenditure support for establishing and operating four processing plants in India.
The initiative aims to strengthen domestic value addition, reduce import dependence and build resilient supply chains for critical minerals. It will also support sectors such as electric mobility, battery energy storage systems (BESS), electronics, defence and speciality steel.
Scheme targets two lithium and two nickel plants
The critical mineral processing scheme will support two lithium processing plants, each with a minimum capacity of 30 kilotonnes (kt).
It will also support two nickel processing plants, each with a minimum capacity of 50 kt.
The facilities will process lithium and nickel ores or intermediary products into high-purity compounds. Cobalt is also expected to be recovered as a by-product of nickel production.
The government will provide a capital subsidy of 30% of eligible investment under the scheme.
The maximum support will be capped at Rs 500 crore per lithium beneficiary and Rs 900 crore per nickel beneficiary.
Beneficiaries to be selected through bidding process
The selection of beneficiaries will follow a two-stage process.
In the first stage, applications will undergo technical assessment. Only applicants meeting the technical qualification criteria will be eligible for the second stage of financial bidding.
For each mineral, two beneficiaries will be selected based on the least-cost criterion. This means preference will be given to bidders seeking the lowest capital expenditure support under the scheme.
The incentives will be disbursed in three tranches, linked to the achievement of specified project milestones.
Scheme aims to reduce import dependence
India remains substantially dependent on imports for refined intermediates and high-purity critical mineral materials.
The government said domestic beneficiation and processing infrastructure for minerals such as lithium, nickel and cobalt remains at a nascent stage.
Commercial-scale projects face challenges including high capital requirements, limited access to suitable technologies and constraints in raw material availability.
Processing capacity is also concentrated in a few global locations. This exposes supply chains to geopolitical disruptions, price volatility and potential restrictions on supplies.
The new scheme seeks to address these challenges by supporting domestic processing infrastructure and increasing value addition within India.
The government said the initiative would strengthen capabilities across the critical mineral value chain and advance the objectives of Atmanirbhar Bharat.
