India Approves ₹2,814 Crore Critical Minerals Scheme to Boost Lithium and Nickel Production

India's ₹2,814 crore critical minerals scheme aims to attract ₹10,000 crore investment, establish four processing plants and strengthen domestic lithium and nickel supply chains.

India's ₹2,814 Crore Critical Minerals Scheme to Support Four Lithium and Nickel Plants

The Indian government has introduced a major financial support initiative to strengthen domestic critical mineral processing and reduce dependence on imported raw materials. The ₹2,814 crore Capital Expenditure (CAPEX) Support Scheme to Promote Critical Mineral Processing is expected to attract approximately ₹10,000 crore in investments.

According to an official factsheet released on Thursday, the initiative will support the establishment of four processing facilities, including two lithium plants and two nickel plants. The scheme aims to strengthen India's mineral value chain and support industries such as electric vehicles, battery storage, electronics, defence and speciality steel.

The initiative is expected to play an important role in developing India's domestic manufacturing capabilities and securing essential raw materials for emerging technologies.

Government Offers 30% Capital Subsidy for Lithium and Nickel Plants

The scheme will remain operational from FY2027 to FY2031 and provide a capital subsidy of 30% to eligible companies establishing lithium and nickel processing facilities.

The government has also established maximum financial assistance limits for individual beneficiaries:

• Lithium processing plants: Maximum capital support of ₹500 crore per beneficiary.

• Nickel processing plants: Maximum capital support of ₹900 crore per beneficiary.

The financial assistance is designed to encourage private investment in mineral processing infrastructure, which requires substantial capital expenditure and advanced technological capabilities.

Through this initiative, the government expects to attract around ₹10,000 crore in investments and create a stronger domestic ecosystem for processing critical minerals.

India Targets 60 KTPA Lithium and 100 KTPA Nickel Processing Capacity

A major objective of the scheme is to establish sufficient domestic processing capacity to meet India's growing demand for critical minerals.

Under the proposed framework, lithium processing facilities will convert ores and concentrates into battery-grade materials suitable for manufacturing energy storage systems and electric vehicle batteries.

Nickel processing plants, meanwhile, will focus on producing Class-1 nickel or battery-grade nickel sulphate, along with recovering cobalt.

The government expects the scheme to create the following processing capacities:

These facilities are expected to help meet projected domestic requirements by 2030 and reduce the country's reliance on imported refined mineral products.

Critical Minerals Scheme to Strengthen EV and Battery Manufacturing

Lithium and nickel are essential raw materials for several modern industries, particularly electric mobility and energy storage. Lithium is widely used in rechargeable batteries, while nickel plays an important role in battery chemistry and various industrial applications.

India's increasing focus on electric vehicles, renewable energy storage and advanced manufacturing is expected to drive demand for these materials.

The new scheme aims to develop domestic processing capabilities and strengthen supply chains for:

• Electric vehicle and battery manufacturing.

• Renewable energy and battery storage.

• Electronics and semiconductor-related industries.

• Defence manufacturing.

• Speciality steel production.

By encouraging domestic processing, the government aims to improve supply-chain security and reduce exposure to international price fluctuations and import-related disruptions.

How Will Companies Be Selected Under the Scheme?

The government will select eligible companies through a competitive two-stage evaluation process.

In the first stage, applications will undergo technical assessments. Only applicants meeting the prescribed technical requirements will qualify for the next stage.

The second stage will involve financial bidding, where eligible companies will compete based on the amount of capital support they require.

For each mineral category, two beneficiaries will be selected using the least-cost selection method. Companies seeking the lowest government capital support will receive preference, subject to meeting the scheme's eligibility conditions.

This competitive approach is intended to ensure transparency and encourage efficient utilisation of public funds.

Financial Incentives to Be Released in Three Instalments

The government will not release the entire subsidy amount at once. Instead, financial assistance will be distributed in three instalments linked to the achievement of specified project milestones.

This milestone-based payment structure is designed to ensure that beneficiaries make progress according to their approved project plans.

It will also help the government monitor implementation, encourage timely completion and ensure that financial support is linked to actual project development.

Scheme Expected to Generate Employment Opportunities

Apart from attracting investments and expanding processing capacity, the initiative is expected to create employment across the critical mineral ecosystem.

New processing facilities will generate direct jobs in plant operations, engineering, mineral processing and technical services.

Additional indirect employment opportunities are also expected through transportation, logistics, equipment manufacturing and supporting industries.

Furthermore, the expansion of downstream manufacturing could create additional jobs in electric vehicle production, battery manufacturing and other technology-driven sectors.

Conclusion

India's ₹2,814 crore Critical Minerals CAPEX Support Scheme represents an important step towards building a self-reliant mineral processing ecosystem. By supporting four lithium and nickel plants and targeting ₹10,000 crore in investments, the initiative aims to reduce import dependence, strengthen EV and battery supply chains and create new employment opportunities. Its success could significantly improve India's position in the global critical minerals industry.