Special minerals are required for the production of modern technologies used in electric vehicles, mobile devices, electronics, and the defense sector. However, after mining these minerals, India still depends on other countries for their processing. China dominates this area. To reduce this dependence, the central government has taken significant steps.
At the Central Cabinet meeting held on Wednesday under the chairmanship of Prime Minister Narendra Modi, the 'Critical Mineral Processing Scheme' worth 2,814 crore rupees was approved. Under this scheme, four processing plants for lithium and nickel will be built in the country. The government will provide a capital subsidy of up to 30% on relevant investments. This will increase the processing of these minerals in India, reduce import dependence, and pave the way for securing raw materials needed for future domestic technological industries.
After approving this program, Prime Minister Narendra Modi wrote on the social network X, questioning whether India should rely on other countries for the processing of critical minerals that power future technologies. He categorically rejected this idea. PM Modi emphasized that lithium, nickel, and cobalt are indispensable for electric vehicles, batteries, electronics, and the defense sector. He noted that India currently heavily relies on imports of refined raw materials. To change this dependency, the Cabinet approved a new program. According to the Prime Minister, the plan will involve establishing new processing enterprises, stimulating investment through capital subsidies, increasing domestic value addition, and making the supply chain more resilient. He stated that India must possess its own potential to create future technologies.
Critical minerals are resources whose supply disruption could negatively affect the country's economy, industry, energy security, and defense sector. These minerals include lithium, nickel, cobalt, graphite, and rare earth elements. They are used in electric vehicles (EVs), batteries, mobile phones, electronics, wind energy, and defense equipment. The processing of these minerals is carried out only in a few countries globally on a large scale. According to data from the International Energy Agency (IEA), China's share in the global processing of rare earth elements and graphite for batteries exceeds 90%.
Thus, regardless of where the minerals are mined, reliance on Chinese processing capacity is often necessary to make them usable in batteries or other technologies. The risk of this dependence increases when political tensions arise in any country, export bans are imposed, or supply disruptions occur. This can lead to delays in raw material acquisition for companies and price increases. India is also highly dependent on the import of high-purity and refined mineral materials. In this regard, the government aims to create a reliable domestic processing infrastructure.
The central government named this initiative the 'Capital Expenditure Support Scheme for Promoting Critical Mineral Processing.' Capital Expenditure (CapEx) refers to capital costs associated with building plants, machinery, and other infrastructure. Under this scheme, the government will provide a 30% capital subsidy on relevant investments for the construction of four critical mineral processing plants in the country. Two of these plants will be dedicated to lithium processing, and two to nickel processing. The total budget for the scheme is set at 2,814 crore rupees and will be implemented over five years, from the fiscal year 2026-27 to 2030-31. The government's goal goes beyond simply building plants; it wants the processing of raw minerals and their primary products into high-purity compounds to take place in India. That is, the work of adding value to minerals must be done domestically to reduce dependence on foreign finished goods supplies.
A minimum production capacity has also been defined for the four plants under the program. For the two lithium plants, the minimum capacity will be 30 kilotons (30,000 tonnes) each. For the two nickel plants, the minimum capacity will be 50 kilotons (50,000 tonnes) each. These plants will process intermediate products obtained from lithium and nickel ores into high-purity compounds that can be used in batteries and other industrial needs. During this process, cobalt is expected to be obtained as a byproduct during nickel production. Cobalt is also an important mineral used in the creation of lithium-ion batteries. Thus, increasing nickel processing capacity can contribute to increasing domestic cobalt availability.
The government will provide 30% of the relevant investments in the form of a capital subsidy. Limits on maximum government assistance have also been set for each project. For example, if a company builds two lithium processing plants, the minimum capacity per plant is set at 30,000 tonnes, and the maximum government assistance for this is 500 crore rupees. Similarly, for nickel processing...
