India is considering a new ₹2,800 crore critical minerals scheme to support companies setting up domestic processing plants for lithium and nickel. The proposal aims to reduce dependence on imported battery materials and strengthen the supply chain for electric vehicles, smartphones, energy-storage systems, and industrial products.
What the scheme may include
The proposed plan would offer capital-expenditure support for processing lithium and nickel ores into battery-grade materials. Reports suggest four plants could be supported: two lithium-processing units with at least 30 kilotonnes of capacity each, and two nickel-processing units with at least 50 kilotonnes each.
The scheme may provide a 30% capital subsidy, with a maximum of ₹500 crore for lithium-processing companies and ₹900 crore for nickel-processing companies. Cobalt could also be recovered as a by-product during nickel processing.
Why lithium and nickel matter
Lithium and nickel are essential for lithium-ion batteries. Lithium is used in batteries for electric vehicles, mobile phones, laptops, and grid-scale storage, while nickel helps improve battery energy density and is also used in stainless steel.
India currently has limited processing capacity for these minerals and remains fully import-dependent for several key inputs, including lithium, nickel, cobalt, rare earth elements, and silicon. The new scheme is designed to fill the gap between mining or importing raw materials and producing value-added battery chemicals in India.
Part of a larger minerals strategy
The proposal would complement the National Critical Mineral Mission (NCMM), approved in January 2025 with an outlay of ₹16,300 crore. The mission covers exploration, mining, processing, recycling, research, and overseas mineral security.
The government has also launched a ₹1,500 crore recycling incentive scheme for critical minerals. It has attracted 58 entities that together pledged 850 kilotonnes per annum of recycling capacity, well above the initial target of 270 kilotonnes.
In addition, India is developing critical mineral processing parks in Andhra Pradesh, Gujarat, Odisha, and Maharashtra. Maharashtra is expected to focus on lithium, while Odisha is being developed around nickel processing.
Expected benefits
If approved, the ₹2,800 crore critical minerals scheme could help India:
- Build domestic capacity for battery-grade lithium and nickel compounds.
- Reduce reliance on overseas processors and imported processed minerals.
- Support electric vehicle manufacturing and battery energy-storage projects.
- Create downstream industrial ecosystems around processing parks.
- Improve supply-chain resilience for electronics, defence, renewable energy, and mobility sectors.
The government has already removed basic customs duty on critical minerals, lithium-ion battery scrap, and processing capital goods in recent Budgets, making the proposed capex support part of a wider policy push.
The road ahead
The scheme is still awaiting final government approval. Its success will depend on securing feedstock, attracting private investment, developing processing technology, and linking new plants with battery and EV manufacturers.
For India, the proposed ₹2,800 crore critical minerals scheme represents an important step toward turning mineral resources into domestically processed, battery-ready materials.
