The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved a Rs 2,814-crore Capital Expenditure (Capex) Support Scheme to promote domestic processing of critical minerals, including lithium and nickel, over five years from FY 2026-27 to 2030-31.
The scheme aims to strengthen India’s domestic critical mineral processing capabilities, reduce import dependence and develop resilient supply chains amid the geographical concentration of processing facilities in a few countries. Such concentration exposes global supply chains to geopolitical disruptions, price volatility and potential supply restrictions, with implications for national security, economic sovereignty and decarbonisation targets.
India currently relies heavily on imports of refined intermediates and high-purity materials due to limited domestic beneficiation and processing infrastructure for critical minerals such as lithium, nickel and cobalt. High capital requirements, limited access to suitable technologies and constraints in raw material availability have also hindered the development of commercial-scale projects.
Under the scheme, a capital subsidy of 30 per cent of eligible investment will be provided for setting up four critical mineral processing plants — two lithium processing units with a minimum capacity of 30 kilotonnes (kt) each and two nickel processing units with a minimum capacity of 50 kt each.
The maximum capital support will be capped at Rs 500 crore per lithium beneficiary and Rs 900 crore per nickel beneficiary. The scheme also envisages the recovery of cobalt as a by-product of nickel processing.
Beneficiaries will be selected through a two-stage process involving technical qualification followed by financial bidding. Two beneficiaries will be selected for each mineral based on the least-cost criterion, with preference given to bidders seeking the lowest capital support.
The incentives will be disbursed in three tranches linked to the achievement of specified milestones.
The scheme is expected to support critical sectors, including electric mobility, Battery Energy Storage Systems (BESS), electronics, defence and speciality steel, while promoting domestic value addition and reducing reliance on imported materials.
The initiative is aimed at advancing the objectives of Atmanirbhar Bharat by strengthening India’s capabilities across the critical mineral value chain and building a resilient domestic processing ecosystem.
(PIB)
