IndiaPosted at: Nov 4 2026 4:22PM


Cabinet clears Rs 2,814-cr scheme to boost domestic Lithium and Nickel processing

New Delhi, Nov 4 (UNI) The union Cabinet on Wednesday approved a Rs 2,814-crore scheme to expand India's domestic critical mineral processing capabilities, with a special focus on lithium and nickel, in a major push to reduce import dependence and strengthen supply chains for strategically important industries.
The five-year ‘Capex Support Scheme to Promote Critical Mineral Processing’, covering the period from 2026-27 to 2030-31, aims to facilitate the establishment of commercial-scale processing facilities in the country and attract private investment in a sector considered crucial to India's economic and technological security.
Announcing the decision after the Cabinet meeting, Information and Broadcasting Minister Ashwini Vaishnaw said the scheme would provide targeted capital expenditure support to encourage domestic value addition and develop processing capabilities for critical minerals.
Under the scheme, the government will provide a capital subsidy of 30 per cent of eligible investment for setting up four processing plants — two for lithium and two for nickel. Each lithium processing facility will have a minimum capacity of 30 kilotonnes (kt), while the minimum capacity for each nickel processing plant will be 50 kt.
The maximum government support will be capped at Rs 500 crore for each lithium processing beneficiary and Rs 900 crore for each nickel processing beneficiary. The scheme also provides for the recovery of cobalt as a by-product of nickel processing, enabling India to develop capabilities across a broader segment of the critical mineral value chain.
The selection of beneficiaries will take place through a two-stage process. Applications will first be assessed for technical eligibility, following which qualified applicants will participate in financial bidding. Two beneficiaries each for lithium and nickel processing will be selected on the basis of the least-cost criterion, giving preference to bidders seeking the lowest capital subsidy from the government.
Financial assistance will be released in three tranches, linked to the achievement of specified milestones to ensure that public funds are disbursed in accordance with progress in establishing and operationalising the facilities.
The initiative seeks to address India's growing vulnerability arising from the concentration of critical mineral processing in a handful of countries. Such concentration has exposed global supply chains to geopolitical tensions, price volatility and potential restrictions on supplies, making the development of alternative and reliable processing capacities an important economic and strategic priority.
India remains substantially dependent on imports for refined intermediates and high-purity critical mineral materials, as its domestic beneficiation and processing infrastructure is still at an early stage. High capital investment requirements, limited access to advanced processing technologies and constraints in the availability of suitable raw materials have emerged as major obstacles to developing commercial-scale facilities.
Lithium, nickel and cobalt are particularly important for the rapidly expanding electric mobility and energy storage sectors. They are also essential to several other applications in electronics, defence and advanced manufacturing. With electric vehicle adoption gathering pace and renewable energy capacity expanding, the demand for battery materials and large-scale Battery Energy Storage Systems (BESS) is expected to grow significantly.
The scheme is therefore intended not merely to facilitate the processing of imported minerals but also to create a domestic industrial ecosystem capable of converting raw materials and intermediate products into high-purity materials required by strategic industries.
Critical minerals have increasingly become a focal point of international competition over clean energy technologies, advanced manufacturing and industrial security. While securing overseas mineral resources remains an important element of India's strategy, the government has recognised that access to raw materials alone cannot guarantee supply security without the capacity to process them domestically.
The latest initiative is part of the government's broader effort to strengthen self-reliance under the Atmanirbhar Bharat programme, reduce exposure to external supply disruptions and build domestic capabilities in sectors central to India's energy transition, technological advancement and long-term economic resilience. UNI SKA AAB
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