Union Coal and Mines Minister G Kishan Reddy
| Photo Credit: The Hindu
The Union Cabinet on Wednesday approved a ₹2,814-crore capital expenditure support scheme to establish domestic processing facilities for lithium and nickel, seeking to strengthen India’s critical mineral ecosystem and reduce import dependence. The scheme will remain in force for five years.
India’s domestic beneficiation and processing infrastructure for critical minerals remains limited, with commercial-scale operations constrained by high capital requirements, limited access to suitable technologies and inadequate availability of raw materials, the government said in a statement.
Union Minister for Coal and Mines G. Kishan Reddy said the scheme would strengthen domestic capabilities, boost manufacturing and reduce dependence on imports.
“It will benefit key sectors such as electronics, semiconductors, batteries, defence, heavy equipment and machinery, while supporting industries across the manufacturing value chain that utilise critical minerals,” he said in a social media post.
Subsidy structure
Under the scheme, the government will provide a capital subsidy of 30% of the investment required to establish four critical mineral processing plants — two each for lithium and nickel.
The minimum processing capacity will be 30,000 tonnes (30 kt) each for lithium and 50,000 tonnes (50 kt) each for nickel.
The subsidy will be capped at ₹500 crore per beneficiary for lithium projects and ₹900 crore per beneficiary for nickel facilities.
The four beneficiaries will be selected through a least-cost bidding process, with preference given to technically qualified applicants seeking the lowest capital expenditure support. Incentives will be disbursed in three tranches.
Industry welcomes move
Industry body the Federation of Indian Mineral Industries (FIMI) welcomed the initiative, saying it could encourage fresh investments, increase domestic value addition and strengthen supply chains for battery manufacturing and other strategic industries.
However, it said that securing adequate raw materials would be critical to the scheme’s success.
“Ensuring a reliable supply of raw material through domestic mining and overseas sourcing will be equally important for the success of these processing facilities,” the industry body told The Hindu.
It also underlined the need to develop the entire value chain, from mining to processing and refining, to strengthen India’s long-term mineral security.
Published – November 04, 2026 09:42 pm IST
