Mines Ministry Plans Incentive Scheme for minerals Processing

The Mines Ministry will soon launch an incentive scheme for domestic lithium and nickel processing, alongside critical mineral processing parks in four states, to strengthen India’s mineral value chain and reduce dependence on imports.

The Ministry of Mines is set to introduce an incentive scheme to promote domestic processing of lithium and nickel as India seeks to strengthen its critical mineral value chain and reduce dependence on imported processed materials.

Mines Secretary Keshav Chandra announced the upcoming initiative while addressing the 60th Annual General Meeting of the Federation of Indian Mineral Industries (FIMI). He said the scheme for lithium and nickel processing would be launched soon, without providing details of the final incentive structure.

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The proposed measures are part of the government’s broader efforts to develop domestic capabilities across critical mineral exploration, mining, processing and downstream manufacturing. Lithium and nickel are important inputs for battery technologies, particularly those used in electric vehicles and energy storage systems. Nickel is also widely used in stainless steel production.

The government has also approved proposals to establish critical mineral processing parks in Gujarat, Maharashtra, Odisha and Andhra Pradesh. According to Chandra, the four states have identified mineral sources, processing methods and potential downstream industries for their respective parks.

Earlier reports had indicated that the proposed incentive programme could include financial support for setting up lithium and nickel processing facilities. A June report by Reuters, citing sources familiar with the matter, estimated an overall outlay of around ₹3,000 crore. Earlier government-linked reports had also discussed production-linked incentives and import-duty concessions for capital goods, although the final structure is yet to be officially announced.

The latest announcement comes as India works to expand its domestic critical mineral ecosystem. The government has identified critical minerals as important for sectors including electric vehicles, renewable energy, defence and advanced manufacturing. Building processing capacity is also intended to ensure greater domestic value addition as mineral resources become available from newly auctioned blocks.

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Chandra also raised concerns over mining blocks that have been auctioned but have not yet become operational despite statutory clearances and execution of mining leases. He urged industry participants to address delays in commencing production.

The proposed lithium and nickel processing scheme, alongside the planned processing parks, is expected to form part of India’s wider strategy to develop domestic capabilities in critical mineral processing and downstream industries.