India Plans ₹3,000 Crore Push to Boost EV Mineral Processing and Cut Import Dependence

India is preparing to roll out a major policy aimed at strengthening domestic processing of critical minerals like lithium and nickel, a move that could significantly support the country’s electric vehicle (EV) ambitions and reduce reliance on imports.

Government Prepares New Scheme for Critical Minerals

The Indian government is expected to soon introduce a comprehensive scheme worth around ₹3,000 crore to promote the domestic processing of key minerals used in electric vehicle batteries. The policy, currently being developed by the Ministry of Mines, is part of a broader strategy to secure India’s position in the global clean energy ecosystem.

The initiative focuses primarily on lithium and nickel two essential materials required for manufacturing advanced batteries. By encouraging local processing capabilities, the government aims to reduce dependence on foreign suppliers and strengthen the country’s supply chain resilience.

Strategic Importance of Lithium and Nickel

Lithium and nickel play a vital role in powering modern electric vehicles, energy storage systems, and other clean technologies. These minerals are critical components in lithium-ion batteries, which are widely used in EVs, smartphones, and renewable energy storage solutions.

Currently, India has limited infrastructure for processing these minerals domestically. As demand for electric vehicles rises, the need for a reliable and secure supply of processed materials is becoming increasingly urgent.

The government’s focus on these two minerals highlights their importance in achieving long-term energy security and supporting India’s transition toward sustainable mobility.

India’s EV Adoption Targets Drive Policy Push

India has set ambitious targets for electric vehicle adoption over the coming decade. The government aims to achieve 30% penetration of electric cars and 80% penetration of electric two-wheelers by 2030.

However, current adoption levels remain relatively low, with electric cars accounting for around 6% of the market and electric two-wheelers at approximately 9%. To bridge this gap, strengthening the supply chain for battery materials is essential.

By boosting domestic processing capabilities, the government hopes to create a more robust ecosystem that can support large-scale EV manufacturing and adoption.

Proposed Incentives Under the Scheme

The upcoming policy is expected to offer financial incentives to companies investing in lithium and nickel processing facilities. According to earlier reports and government discussions, the scheme may include a capital subsidy of up to 15% for eligible projects.

These incentives are likely to be available for a period of five years and may be linked to specific performance criteria. Companies would need to meet operational benchmarks and utilisation targets to receive the full benefits of the subsidy.

The government is also expected to release the incentives in phases, ensuring that funds are tied to measurable progress and efficiency in operations.

Capacity Requirements for Eligibility

To qualify for the proposed incentives, companies will need to meet minimum capacity thresholds for processing facilities. Lithium processing plants are expected to require a minimum capacity of 30,000 metric tonnes, while nickel processing units may need at least 50,000 metric tonnes.

These requirements are designed to ensure that only large-scale, high-impact projects receive government support. By focusing on substantial investments, the policy aims to create a strong industrial base capable of meeting future demand.

Initial Phase to Focus on Select Projects

In the initial phase, the government is likely to support a limited number of projects to establish a foundation for the sector. Reports suggest that two lithium-processing projects and two nickel-processing projects could be selected as part of this phase.

This targeted approach will allow the government to monitor progress, identify challenges, and refine the policy framework before expanding support to additional projects.

The goal is to gradually build a self-sufficient ecosystem that can meet domestic demand for battery materials by 2030.

Strengthening India’s Critical Mineral Strategy

India identified more than 20 minerals as critical to its energy transition efforts in 2023, with lithium being one of the most important among them. The government has since been actively working to secure access to these resources through both domestic initiatives and international partnerships.

Efforts are also underway to collaborate with other countries for technology transfer and expertise in mineral processing. Such partnerships could help India accelerate the development of advanced processing capabilities and reduce the time required to build a competitive industry.

Reducing Import Dependence

One of the key objectives of the proposed scheme is to reduce India’s reliance on imports for processed battery materials. At present, a significant portion of lithium and nickel used in the country is sourced from abroad.

This dependence exposes the supply chain to global price fluctuations, geopolitical risks, and logistical challenges. By developing domestic processing capabilities, India can improve supply security and gain greater control over its energy transition.

Boost for Battery Manufacturing Ecosystem

The policy is expected to have a positive impact on India’s broader battery manufacturing ecosystem. With improved access to processed materials, domestic manufacturers will be better positioned to scale production and innovate in battery technologies.

This could also attract investments from global players looking to establish manufacturing facilities in India. A strong supply chain for critical minerals is a key factor in building a competitive EV and energy storage industry.

Industry Outlook and Future Impact

Experts believe that the proposed scheme could play a transformative role in India’s clean energy journey. By addressing one of the most critical gaps in the EV value chain, the policy has the potential to accelerate adoption and reduce costs over time.

However, successful implementation will depend on factors such as timely approvals, efficient execution, and collaboration between the government and private sector.

As the global race for critical minerals intensifies, India’s proactive approach could help it secure a strategic advantage in the emerging green economy.

Conclusion

The government’s plan to introduce a ₹3,000 crore scheme for lithium and nickel processing marks a significant step toward strengthening India’s EV ecosystem.

By focusing on domestic capacity building, reducing import dependence, and supporting large-scale investments, the initiative aims to create a sustainable and resilient supply chain for critical minerals.

If executed effectively, the policy could pave the way for faster EV adoption, enhanced energy security, and long-term growth in India’s clean technology sector.