The government has approved a capital expenditure support scheme aimed at stimulating the processing of critical minerals—lithium and nickel. The total financial volume of this program is 2814 crore rupees and is planned for a five-year period until 2030-31.
The decision was made at the Cabinet meeting chaired by Prime Minister Narendra Modi. The goal of this scheme is to develop domestic processing capabilities in India, which will allow for increasing added value within the country, reducing dependence on imports, and forming a complete value chain.
According to the scheme's terms, a capital subsidy of 30% of the corresponding investment volume will be provided for the construction of four facilities for processing critical minerals—two for lithium and two for nickel. The maximum capital support is limited to an amount of 500 crore rupees for lithium beneficiaries and 900 crore rupees for nickel beneficiaries, respectively.
Critical minerals are of paramount importance for economic growth, national security, and modern clean energy technologies. They are the basis for products such as solar panels, electric vehicles, and electronic devices, forming the foundation of the modern zero-carbon economy.
Information and Broadcasting Minister Ashwini Vaishnaw told the media that 'Our National Mission on Critical Minerals is developing very systematically... Today the Cabinet approved the scheme for the processing of critical minerals.'
The official statement emphasized that the concentration of critical mineral processing in several global regions makes global supply chains vulnerable to geopolitical tensions, price fluctuations, and export or supply restrictions. Such concentration threatens supply chain resilience and economic security, which has serious implications for national security, economic sovereignty, and the timely achievement of decarbonization goals.
Currently, India relies heavily on imports of refined intermediate products and high-purity materials due to the initial stage of developing domestic refining and processing infrastructure for critical minerals, including lithium, nickel, and cobalt. Limited domestic processing capacity faces challenges related to high capital requirements, limited availability of suitable technologies, and difficult access to raw materials.
Therefore, developing domestic processing capacity is vital for maximizing added value, achieving import substitution, and creating sustainable end-to-end value chains. In light of this, a scheme has been developed that provides targeted support for capital expenditures to establish and commission domestic processing facilities.
The scheme targets the processing of lithium and nickel ores or intermediate products into high-purity compounds. Furthermore, cobalt is expected to be extracted as a byproduct during nickel production. This will support critical sectors such as electric transport, battery energy storage systems (BESS), electronics, defense industry, and special steel. The proposed scheme with a total funding volume of 2814 crore rupees will be implemented from 2026-27 to 2030-31.
