India Allocates Rs 2,814 Crore for Lithium and Nickel Processing
The Indian government announces a significant incentive scheme to boost domestic processing of critical minerals, aiming to enhance self-sufficiency.
The Union Cabinet approved a Rs 2,814-crore scheme for lithium and nickel processing.
Four processing plants will be established, with a focus on reducing import dependence.
The initiative aims to strengthen India's position in the global battery supply chain.
On November 4, the Union Cabinet of India sanctioned a substantial financial support scheme amounting to Rs 2,814 crore, aimed at enhancing the domestic processing capabilities for critical minerals such as lithium and nickel. This initiative is part of the government's broader strategy to diminish reliance on imports and fortify India's role in the global battery supply chain.
The scheme is set to be implemented over a five-year period from FY27 to FY31, providing a capital subsidy of 30% for eligible investments in the establishment of four processing facilities—two dedicated to lithium and two to nickel. Additionally, cobalt is anticipated to be extracted as a by-product during nickel processing, as outlined in an official statement.
This initiative comes in response to India's existing challenges, including limited domestic processing infrastructure and a heavy dependence on imported refined materials. The concentration of critical mineral processing in a few countries poses risks of supply chain disruptions due to geopolitical tensions, export restrictions, and fluctuating prices.
Under the proposed scheme, two lithium processing plants with a minimum capacity of 30 kilotonnes each and two nickel processing plants with a minimum capacity of 50 kilotonnes each will be constructed. The maximum capital support is capped at Rs 500 crore for each lithium beneficiary and Rs 900 crore for each nickel beneficiary. Beneficiaries will be selected through a two-stage process based on technical qualifications and financial bidding, prioritizing those seeking the lowest government support.
This scheme is a crucial step in addressing the gaps within the critical mineral value chain, complementing the government's existing Rs 1,500-crore incentive scheme for critical mineral recycling. Furthermore, the government has identified states including Gujarat, Maharashtra, Odisha, and Andhra Pradesh for the establishment of critical mineral processing parks, each expected to cultivate specific mineral ecosystems.
