Cabinet
Cabinet approves Rs 2,814 crore scheme to boost India's critical mineral industry
The Indian Cabinet has approved the ‘Capex Support Scheme to Promote Critical Mineral Processing’ with a total financial outlay of Rs. 2,814 crore over a period of five years.
The processing of critical minerals remains geographically concentrated in a few locations worldwide. This exposes global supply chains to geopolitical disruptions, price volatility and potential supply restrictions, posing significant challenges to supply chain resilience and economic security.
The issue has wider implications for national security, economic sovereignty and the timely achievement of decarbonisation targets.
India currently remains substantially dependent on imports for refined intermediates and high-purity materials due to the nascent stage of its domestic beneficiation and processing infrastructure for critical minerals, including lithium, nickel and cobalt.
Domestic processing capacity remains limited, with commercial-scale projects facing challenges such as high capital requirements, limited access to suitable technologies and constrained availability of raw materials.
Developing domestic processing capabilities is therefore essential to maximise value addition within the country, reduce import dependence and establish resilient end-to-end value chains.
Against this backdrop, the ‘Capex Support Scheme to Promote Critical Mineral Processing’ has been formulated to provide targeted capital expenditure support for setting up and operationalising domestic processing facilities.
The scheme aims to strengthen India's domestic critical mineral processing capabilities, promote value addition within the country, reduce import dependence and develop a robust domestic value chain.
It will focus on processing 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.
The initiative is expected to support critical sectors such as electric mobility, Battery Energy Storage Systems (BESS), electronics, defence and speciality steel.
The scheme has a total financial outlay of Rs. 2,814 crore and will be implemented over five years, from FY 2026-27 to FY 2030-31.
Under the scheme, a capital subsidy equivalent to 30% of eligible investment will be provided for establishing four critical mineral processing plants. These will comprise 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 capital support will be capped at Rs. 500 crore per lithium beneficiary and Rs. 900 crore per nickel beneficiary.
The selection of beneficiaries will follow a two-stage process. In the first stage, applications will be assessed for technical eligibility, with only technically qualified applicants allowed to participate in the subsequent financial bidding process.
For each mineral, two beneficiaries will be selected based on the least-cost criterion, determined by the lowest capital expenditure support sought by bidders under the scheme.
The incentives will be disbursed in three instalments linked to the achievement of specified project milestones.
The scheme marks an important step towards advancing the objectives of Atmanirbhar Bharat by promoting resilient domestic processing infrastructure, reducing dependence on imported critical mineral materials and strengthening India's capabilities across the critical mineral value chain.
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