With an eye on reducing dependence on imported critical minerals, the Union Cabinet has approved a scheme to set up domestic lithium and nickel processing facilities in the country. 

Called the Capex Support Scheme to Promote Critical Mineral Processing, the programme has been approved with a financial outlay of ₹2,814 Cr over a period of five years from FY27 to FY31. 

The outlay will pave the way for setting up four plants, two each for lithium and nickel processing. In a statement, the government said that the units will process lithium and nickel ores or intermediary products into high-purity compounds. Cobalt is also expected to be recovered as a by-product of nickel production.

Under the scheme, beneficiaries will receive milestone-linked capital subsidies covering 30% of their eligible investment, subject to certain thresholds. For lithium processing, support will be capped at ₹500 Cr per beneficiary. However, each of the two proposed lithium plants should have a minimum capacity of 30 kilo-tonnes.

For nickel processing, the maximum support will be ₹900 Cr per beneficiary, with each plant required to have a minimum capacity of 50 kilo-tonnes.

The scheme focuses on processing, rather than mining alone. This strategy aims to retain more value within India by converting raw materials into compounds, which are required by downstream industries.

The government said that the resulting capacity would support use cases across electric mobility, battery energy storage systems (BESS), electronics, defence and speciality steel.

“The scheme aims to develop domestic processing capabilities in India to support value addition within the country, reduce import dependence, and develop (the) value chain… This will support critical sectors such as electric mobility, BESS, electronics, defence, speciality steel etc,” read an official statement.

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