Cabinet Approves Rs. 2,814 Crore Scheme to Boost Domestic Critical Mineral Processing
The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a ₹2,814 crore Capital Expenditure (Capex) Support Scheme to promote domestic processing of critical minerals, particularly lithium and nickel. The scheme will be implemented over five years, from the financial year 2026-27 to 2030-31.
The initiative aims to strengthen India’s domestic critical mineral processing capabilities, reduce dependence on imports and establish a resilient supply chain for minerals essential to strategic and emerging industries.
Currently, the global processing of critical minerals is concentrated in a limited number of countries, making supply chains vulnerable to geopolitical tensions, price fluctuations and potential export restrictions. India remains heavily dependent on imports for refined intermediates and high-purity materials due to limited domestic processing infrastructure for minerals such as lithium, nickel and cobalt.
Against this backdrop, the newly approved scheme seeks to encourage investment in domestic processing facilities by providing targeted capital expenditure support. It will focus on converting lithium and nickel ores and intermediate products into high-purity compounds. Cobalt is also expected to be recovered as a by-product of nickel processing.
Under the scheme, the government will provide a capital subsidy of 30 per cent of eligible investments for establishing four critical mineral processing plants. These will include two lithium processing plants, each with a minimum capacity of 30 kilotonnes (kt), and two nickel processing plants, each with a minimum capacity of 50 kt.
The maximum financial support will be capped at ₹500 crore for each lithium processing project and ₹900 crore for each nickel processing project.
The selection of beneficiaries will follow a two-stage process. Applicants will first undergo technical evaluation, and only those meeting the required qualifications will be eligible to participate in the financial bidding process. Two beneficiaries will be selected for each mineral based on the lowest capital expenditure support sought from the government.
The financial assistance will be disbursed in three instalments linked to the achievement of specified project milestones.
The scheme is expected to benefit several key sectors, including electric mobility, Battery Energy Storage Systems (BESS), electronics, defence and speciality steel, where critical minerals play an essential role.
The government believes that strengthening domestic processing infrastructure will help maximise value addition within the country, promote import substitution and reduce vulnerabilities in critical mineral supply chains.
The approval marks a significant step towards advancing the vision of Atmanirbhar Bharat by strengthening India’s self-reliance in critical minerals and building domestic capabilities across the entire mineral value chain.
