Cabinet Approves ₹2,814 Crore Scheme for Lithium and Nickel Plants
The Union Cabinet approves a ₹2,814 crore scheme offering 30% capital subsidies to establish four lithium and nickel processing plants and strengthen India's critical mineral supply chains.
The Union Cabinet has approved a ₹2,814 crore capital expenditure support scheme to strengthen India's domestic processing capabilities for critical minerals, particularly lithium and nickel. The initiative aims to reduce dependence on imported high-purity mineral materials, attract private investment and establish a stronger domestic supply chain for industries such as electric mobility, battery storage, electronics, defence and speciality steel.
Announcing the decision on November 4, 2026, Union Minister Ashwini Vaishnaw said the five-year initiative, titled the Capex Support Scheme to Promote Critical Mineral Processing, will be implemented from the financial year 2026-27 to 2030-31. It will support the establishment and operation of commercial-scale facilities that convert lithium and nickel ores or intermediate products into high-purity compounds. Cobalt will also be recovered as a by-product of nickel processing.
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Under the scheme, the government will provide a capital subsidy covering 30 per cent of eligible investment for establishing four processing facilities. These will comprise two lithium processing plants, each with a minimum capacity of 30 kilotonnes, and two nickel processing plants, each with a minimum capacity of 50 kilotonnes. The maximum government assistance will be capped at ₹500 crore for each lithium processing beneficiary and ₹900 crore for each nickel processing beneficiary.
The selection of companies will follow a two-stage evaluation process. Applicants will first undergo technical assessment to establish their eligibility and project capabilities. Those qualifying at this stage will proceed to financial bidding, where two beneficiaries for each mineral will be selected based on the least-cost criterion, considering the lowest capital support requested. Financial assistance will be released in three instalments linked to the achievement of specified project milestones.
The initiative addresses India's limited domestic capacity to process critical minerals. Although these materials are essential for advanced manufacturing and clean energy technologies, the country continues to depend on overseas suppliers for refined intermediates and high-purity products. Concentration of processing capabilities in a limited number of countries also exposes global supply chains to geopolitical disruptions, price fluctuations and potential export restrictions.
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Lithium and nickel are important raw materials for lithium-ion batteries used in electric vehicles and energy storage systems. Cobalt also plays a role in battery manufacturing and other industrial applications. Developing domestic processing infrastructure is therefore important for strengthening India's battery manufacturing ecosystem and supporting the expansion of electric mobility.
The scheme forms part of the government's broader efforts under the Atmanirbhar Bharat initiative to increase domestic value addition, encourage import substitution and improve supply chain resilience. By supporting commercial-scale processing facilities, the government aims to build capabilities across the critical mineral value chain and support India's long-term energy transition and industrial development.
