India approves a ₹2,814 crore scheme to boost domestic lithium and nickel processing and reduce import dependence
NEW DELHI: The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved a Capex Support Scheme with an outlay of ₹2,814 crore to promote domestic processing of critical minerals and reduce India’s dependence on imported refined materials.
The five-year scheme, spanning FY 2026-27 to 2030-31, aims to build processing capacity for lithium and nickel minerals essential for electric vehicles, batteries, electronics and defence applications. Cobalt is expected to be recovered as a by-product of nickel processing.
Key Features of the Scheme
Under the scheme, the government will provide a capital subsidy of 30 per cent of eligible investment for setting up four critical mineral processing plants: two for lithium and two for nickel.
Each lithium plant must have a minimum processing capacity of 30,000 tonnes, while each nickel plant must have a minimum capacity of 50,000 tonnes. Capital support will be capped at ₹500 crore per lithium project and ₹900 crore per nickel project.
Beneficiaries will be selected through a two-stage process involving technical qualification followed by financial bidding, with preference given to the lowest capital expenditure support sought.
Addressing Supply Chain Vulnerabilities
Prime Minister Modi highlighted the strategic importance of the decision in a social media post, asking whether India should continue to depend on other countries for processing the critical minerals that power future technologies.
An official statement noted that processing of critical minerals remains geographically concentrated in a few locations globally. This concentration exposes supply chains to geopolitical disruptions, price volatility and potential restrictions, posing risks to economic security and the timely achievement of India’s decarbonisation goals.
The scheme is expected to encourage investment in new processing facilities, increase domestic value addition and strengthen supply chains for high-priority sectors.
By building indigenous processing capabilities, India aims to reduce reliance on imports of refined lithium, nickel and related materials while supporting the growth of electric mobility, battery storage, electronics and defence manufacturing.
The initiative forms part of the government’s broader push to secure critical mineral supply chains and enhance self-reliance in technologies of the future.
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