India has taken a major step toward building a self-reliant critical-minerals industry. The Union Cabinet has approved a ₹2,814-crore Capex Support Scheme to Promote Critical Mineral Processing, focused on lithium and nickel processing in India. The five-year programme will run from FY 2026-27 to FY 2030-31.
The scheme is designed to help India process lithium and nickel ores and intermediate products into high-purity, battery-grade materials. It aims to create domestic value addition, strengthen manufacturing, and reduce dependence on imported processed minerals.
What the scheme offers
Under the programme, the government will provide a 30% capital subsidy on eligible investment for four processing plants: two lithium plants and two nickel plants. The support is intended to lower the high upfront cost of setting up advanced mineral-processing facilities.pib.gov+1
| Mineral | Number of plants | Minimum capacity | Maximum support |
|---|---|---|---|
| Lithium | 2 | 30 kilotonnes each | ₹500 crore per beneficiary |
| Nickel | 2 | 50 kilotonnes each | ₹900 crore per beneficiary |
The total subsidy support for lithium is ₹1,000 crore, while nickel receives ₹1,800 crore. A further ₹14 crore has been set aside for administrative expenses, bringing the total outlay to ₹2,814 crore.
Focus on battery materials
The lithium plants will process ores and concentrates, excluding brines, into battery-grade products. The nickel plants will produce Class-1 nickel or battery-grade nickel sulphate, while also enabling cobalt recovery as a by-product.
These materials are essential inputs for electric vehicle batteries, energy-storage systems, electronics, and other advanced industries. By encouraging domestic processing, the government wants India to move beyond raw-material supply and capture more value within the country.
How companies will be selected
Beneficiaries will be chosen through a competitive two-stage process. First, applications will be assessed for technical qualification. Qualified applicants will then take part in financial bidding.pib.gov+1
For each mineral, two beneficiaries will be selected based on the lowest capital support sought. This approach is intended to ensure cost-effective use of public funds while attracting serious investment in domestic processing capacity.pib.gov+1
Milestone-linked support
The financial support will not be released all at once. It will be disbursed in three tranches, linked to the achievement of specified project milestones.
Companies must commission their plants within three years of receiving the Letter of Award. In any case, commissioning must be completed within five years of the award.
Expected impact
The government expects the scheme to anchor around ₹10,000 crore in investment in lithium and nickel processing. It is also expected to create 60 kilotonnes of lithium processing capacity and 100 kilotonnes of nickel processing capacity.
The initiative supports India’s broader Atmanirbhar Bharat goal of building resilient supply chains for critical minerals. It may also strengthen downstream sectors such as electric mobility, battery manufacturing, renewable energy storage, electronics, defence, and speciality steel.
Why it matters
India’s push for electric vehicles and clean energy depends heavily on secure access to processed lithium and nickel. Until now, much of the country’s requirement for refined battery materials has been met through imports or overseas processing.
The new scheme signals a shift from simply securing mineral resources to building domestic industrial capability. If implemented effectively, lithium and nickel processing in India could become a key pillar of the country’s clean-energy and advanced-manufacturing strategy.
