New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a ₹2,814 crore capital expenditure support scheme to promote critical mineral processing in India. The mineral processing scheme will run for five years, from 2026–27 to 2030–31, and aims to strengthen domestic processing capacity for lithium and nickel.
The programme seeks to reduce India’s dependence on imported refined intermediates and high-purity materials. Currently, domestic beneficiation and processing infrastructure for critical minerals remains at an early stage. Consequently, India faces challenges in establishing commercial-scale facilities due to high capital requirements, limited technology availability and restricted access to raw materials.
Critical mineral processing is concentrated in a few global locations. This exposes supply chains to geopolitical disruptions, price volatility and possible supply restrictions. Therefore, expanding domestic capacity is considered essential for economic security, national security and achieving decarbonisation targets.
Under the scheme, the government will provide capital subsidies covering 30% of eligible investments. The support will facilitate four processing plants, including two lithium facilities and two nickel facilities. Each lithium plant must have a minimum capacity of 30 kilotonnes, while each nickel plant must have a minimum capacity of 50 kilotonnes.
Mineral processing scheme: Subsidies and beneficiary selection
The scheme sets maximum capital support at ₹500 crore for each lithium beneficiary and ₹900 crore for each nickel beneficiary. For each mineral, two beneficiaries will be selected through a competitive process based on the lowest capital expenditure support sought.
Applications will undergo a two-stage selection process. First, authorities will assess technical qualifications. Subsequently, technically qualified applicants will participate in financial bidding, with selection based on the least-cost criterion. Incentives will be released in three tranches linked to specified milestones.
The programme targets the processing of lithium and nickel ores or intermediary products into high-purity compounds. Additionally, cobalt is expected to be recovered as a by-product of nickel production.
The government expects the scheme to support critical sectors such as electric mobility, Battery Energy Storage Systems (BESS), electronics, defence and speciality steel. Domestic processing facilities will also promote value addition within India and strengthen integrated supply chains.
The initiative is positioned as an important step towards advancing Atmanirbhar Bharat. By expanding domestic processing infrastructure, the government aims to reduce import dependence and build resilient capabilities across the critical mineral value chain.
