NEW DELHI : The Union Cabinet approved a Rs 2,814 crore scheme Wednesday to subsidize domestic processing of lithium and nickel, aiming to cut India’s reliance on imported refined minerals.
Prime Minister Narendra Modi, who chaired the meeting, said in a post on X that India should not depend on other countries to process the minerals that power its future.
“Lithium, nickel, cobalt: these are essential for EVs, batteries, electronics and defence,” Modi wrote. “Yet, we remain heavily dependent on imports of refined materials.”
He said the scheme would create new processing plants, attract investment through capital subsidies, add domestic value and strengthen supply chains.
How the scheme works
The Capex Support Scheme to Promote Critical Mineral Processing will run from fiscal 2026-27 to 2030-31. It offers a 30% capital subsidy for four plants: two lithium processing plants with a minimum capacity of 30 kilotonnes each and two nickel processing plants with a minimum capacity of 50 kilotonnes each.
Support is capped at Rs 500 crore per lithium beneficiary and Rs 900 crore per nickel beneficiary.
Selection will happen in two stages. Applicants must first pass a technical assessment. Those who qualify will then bid on the amount of capital support they need. For each mineral, the two bidders seeking the least support will be chosen.
Incentives will be paid in three tranches tied to specific milestones.
Why the government says it is needed
According to a Cabinet release, critical mineral processing is concentrated in a few countries, which exposes supply chains to geopolitical disruption, price swings and export restrictions. The release said this affects national security, economic sovereignty and India’s decarbonisation targets.
India imports most of its refined and high-purity lithium, nickel and cobalt because its processing infrastructure is at an early stage. The release said commercial-scale projects face high capital costs, limited access to suitable technology and restricted access to raw materials.
The scheme targets the conversion of lithium and nickel ores and intermediate products into high-purity compounds. Cobalt is expected to be recovered as a byproduct of nickel production.
The government said these materials support electric mobility, battery energy storage systems, electronics, defence and specialty steel.
The release said the scheme advances the goal of Atmanirbhar Bharat, or self-reliance, by building domestic processing capacity and a more resilient value chain.
