Our Bureau
New Delhi
The Union Cabinet has approved a Rs 2,814-crore scheme to strengthen India’s domestic critical mineral processing capabilities and reduce dependence on imports of essential materials such as lithium, nickel and cobalt. The scheme, titled ‘Capex Support Scheme to Promote Critical Mineral Processing’, will be implemented over five years, from the financial year 2026-27 to 2030-31.
The initiative aims to establish four critical mineral processing plants, including two lithium processing units and two nickel processing units. The government will provide a capital subsidy of 30% of eligible investments to encourage companies to set up these facilities.
Under the scheme, each lithium processing plant will have a minimum capacity of 30,000 tonnes, while each nickel processing plant will have a minimum capacity of 50,000 tonnes. The maximum financial support has been capped at Rs 500 crore per lithium beneficiary and Rs 900 crore per nickel beneficiary.
The move comes amid India’s heavy dependence on overseas suppliers for refined critical minerals and high-purity materials. Limited domestic processing infrastructure and high investment requirements have made it difficult for companies to establish large-scale facilities. Concentration of mineral processing in a few countries also exposes global supply chains to geopolitical tensions, price fluctuations and possible export restrictions.
The scheme is expected to support industries such as electric vehicles, battery energy storage systems, electronics, defence and speciality steel. Cobalt, another important mineral used in battery manufacturing, is also expected to be recovered as a by-product of nickel processing.
Beneficiaries will be selected through a two-stage process involving technical evaluation followed by financial bidding. Two companies will be selected for each mineral based on the lowest capital support sought from the government. Financial assistance will be released in three instalments linked to the achievement of project milestones.
The initiative is expected to strengthen India’s mineral value chain, encourage domestic manufacturing and advance the government’s Atmanirbhar Bharat push.