Cabinet Approves ₹2,814 Crore Capex Scheme for Lithium and Nickel Processing in India
The Union Cabinet approved a Capex Support Scheme to Promote Critical Mineral Processing with a total outlay of ₹2,814 crore. "Capex" (capital expenditure) means the money spent to build a plant and buy machines.
The scheme runs for five years, from FY 2026-27 to FY 2030-31. It supports turning lithium and nickel ores or intermediate products into high-purity compounds used in batteries. Cobalt is expected to be recovered as a by-product of nickel processing.
It will support four plants: two lithium plants (at least 30 kilotonnes capacity each) and two nickel plants (at least 50 kilotonnes each).
Selected companies get a capital subsidy of 30% of eligible investment, capped at ₹500 crore per lithium plant and ₹900 crore per nickel plant.
Selection is in two stages: technical qualification first, then financial bidding. The two bidders per mineral who ask for the lowest support win. Money is paid in three tranches linked to project milestones.
The aim is to cut India's heavy dependence on imported refined minerals and to build supply chains for electric vehicles, battery storage, electronics, defence and special steel.
Critical Minerals: Meaning, India's List and Global Supply Chains
Critical minerals are minerals a country badly needs for its economy and security, but whose supply is at risk. They go into EV batteries, solar panels, wind turbines, chips and defence equipment. Lithium, cobalt, nickel, graphite and rare earth elements are common examples. The risk usually comes from the fact that only a few countries mine or refine them.
The new scheme targets exactly this processing gap. Even if India buys ore abroad or finds it at home, it needs its own refineries to make battery-grade lithium and nickel compounds. The 30% capital subsidy lowers the high upfront cost that has kept such plants away.
National Critical Mineral Mission (NCMM): India's Plan to Secure Minerals of the Future
The National Critical Mineral Mission is the Government of India's seven-year programme to make the country self-reliant in critical minerals. It covers the whole value chain: finding minerals, mining them, processing them, and recovering them from old products through recycling. The Ministry of Mines runs it.
The new processing scheme fills the "processing" stage of the NCMM value chain. Exploration and recycling already have support; this scheme gives direct capital help to build the first large lithium and nickel refineries in India.
Lithium: Properties, Sources and Extraction Methods
Lithium is a soft, silvery-white metal and the lightest metal on Earth. It can store a lot of electrical energy in very little weight. That is why it is the key ingredient of rechargeable batteries in phones, laptops, electric vehicles and grid batteries. Mined lithium must be refined into compounds such as lithium carbonate or lithium hydroxide before it can go into a battery.
Two of the four plants under the scheme will be lithium plants of at least 30 kilotonnes each. They will turn ore or intermediate products into high-purity lithium compounds, so that Indian battery makers do not have to import these chemicals.
- Scheme: Capex Support Scheme to Promote Critical Mineral Processing
- Outlay: ₹2,814 crore; period FY 2026-27 to FY 2030-31
- Minerals: lithium and nickel (cobalt as a by-product of nickel)
- Plants: 2 lithium (minimum 30 kt each) + 2 nickel (minimum 50 kt each)
- Support: 30% capital subsidy; cap ₹500 crore per lithium beneficiary, ₹900 crore per nickel beneficiary
- Selection: two-stage (technical, then financial); least CAPEX support sought wins; 3 milestone-linked tranches
- NCMM: approved January 2025; ₹16,300 crore government outlay, about ₹34,300 crore total; FY 2024-25 to FY 2030-31
- Critical mineral recycling scheme: ₹1,500 crore, approved September 2025
- India's critical minerals list: 30 minerals (June 2023)
- Reasi (J&K) lithium: 5.9 million tonnes inferred resource (February 2023)