Cabinet Approves ₹2,814 Crore Capex Support Scheme for Lithium and Nickel Processing

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Capex Support Scheme to Promote Critical Mineral Processing, with a financial outlay of ₹2,814 crore over five years, from FY 2026-27 to FY 2030-31.

The processing of critical minerals is concentrated in a few countries, exposing global supply chains to geopolitical disruptions, price fluctuations and potential supply restrictions. India currently depends on imports for refined intermediates and high-purity materials, as domestic beneficiation and processing infrastructure for minerals such as lithium, nickel and cobalt remains at an early stage.

The scheme aims to establish domestic processing facilities to increase value addition within India and reduce import dependence. It will support the processing of lithium and nickel ores and intermediate products into high-purity compounds. Cobalt is also expected to be recovered as a by-product of nickel processing.

The scheme will provide a capital subsidy of 30% of eligible investment for setting up four processing plants: two lithium processing plants with a minimum capacity of 30 kt each and two nickel processing plants with a minimum capacity of 50 kt each. The maximum capital support has been capped at ₹500 crore per lithium beneficiary and ₹900 crore per nickel beneficiary.

Beneficiary selection will follow a two-stage process. Applicants will first undergo technical evaluation, with technically qualified applicants proceeding to financial bidding. Two beneficiaries will be selected for each mineral based on the lowest capital expenditure support sought under the scheme. The incentives will be disbursed in three tranches linked to the achievement of specified milestones.

The scheme is intended to support the development of domestic processing capacity for critical minerals used in electric mobility, battery energy storage systems (BESS), electronics, defence and speciality steel. It is also aimed at strengthening India’s position across the critical mineral value chain and reducing dependence on imported processed materials.

Also read: Production Linked Incentive (PLI) scheme for automobile and auto component industry