India approves ₹2,814 crore subsidy for lithium and nickel processing facilities
The Indian Union Cabinet has authorized a five-year capital expenditure scheme to establish domestic processing plants for lithium and nickel, aiming to reduce reliance on mineral imports.
The Indian government has launched the Capex Support Scheme to Promote Critical Mineral Processing, allocating ₹2,814 crore to be distributed between FY27 and FY31. The program aims to finance the construction of four processing plants—two for lithium and two for nickel—designed to convert raw ores into high-purity compounds. Cobalt will also be recovered as a byproduct of the nickel production process.
Under the guidelines, the government will provide milestone-linked capital subsidies covering 30% of eligible investments. Lithium projects are capped at ₹500 crore per beneficiary with a minimum capacity of 30 kilo-tonnes, while nickel facilities are eligible for up to ₹900 crore with a minimum capacity of 50 kilo-tonnes. Beneficiaries will be selected via a two-stage process based on technical qualifications and competitive financial bidding.
Currently, India relies entirely on imports for refined lithium, nickel, and cobalt, leaving the supply chain vulnerable to geopolitical instability and price fluctuations. By shifting focus from raw extraction to domestic value-added processing, the government intends to stabilize the supply chain for the nation’s growing electric vehicle, battery storage, and defense manufacturing sectors.
This initiative follows a previous ₹1,500 crore incentive package approved in late 2025 aimed at expanding critical mineral recycling capacity. The new program requires private operators to secure their own raw material streams while meeting strict output thresholds to qualify for disbursements.