NEW DELHI: In a bid to reduce India’s dependence on imports of high-purity critical minerals used in electric vehicles, electronics, and other industries, the Union Cabinet on Wednesday approved a Rs.2,814 crore scheme to set up domestic processing plants.
The Capex Support Scheme to Promote Critical Mineral Processing will be implemented over five years, from 2026-27 to 2030-31.
Under the scheme, the government will provide a capital subsidy of 30% of eligible investment for setting up four plants—two for lithium processing and two for nickel processing.
The lithium processing plants will have a minimum capacity of 30,000 tonnes each, while the nickel plants will have a minimum capacity of 50,000 tonnes each. The maximum government support will be capped at Rs.500 crore for each lithium beneficiary and Rs.900 crore for each nickel beneficiary.
The scheme aims to address the shortage of domestic critical mineral processing capacity. Processing of these minerals is concentrated in a few countries, making global supply chains vulnerable to geopolitical disruptions, price volatility, and export restrictions.
India currently depends heavily on imports of refined intermediates and high-purity materials derived from critical minerals such as lithium, nickel, and cobalt. The government said domestic processing capacity is needed to increase value addition, reduce import dependence, and build resilient supply chains.
Cobalt is also expected to be recovered as a by-product of nickel production. The proposed plants will support sectors such as electric mobility, battery energy storage systems, electronics, defense, and speciality steel.
Beneficiaries will be selected through a two-stage process. Applicants will first be assessed for technical qualification, followed by financial bidding. For each mineral, two companies will be selected based on the lowest capital support sought.
The subsidy will be released in three installments linked to the achievement of specified project milestones.
The scheme is expected to strengthen India’s domestic critical mineral value chain and support the government’s Atmanirbhar Bharat initiative.