New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved the Capex Support Scheme to Promote Critical Mineral Processing with an outlay of Rs 2,814 crore. Under the scheme, the government will pay a capital subsidy of 30 percent of eligible investment to set up four processing plants, two for lithium and two for nickel, according to an official statement. The scheme will run for five years, from financial year 2026-27 to 2030-31.
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Union Information and Broadcasting Minister Ashwini Vaishnaw announced the decision at a media briefing after the Cabinet meeting. He said the scheme aims to turn raw critical minerals into material that industry can use. “The focus will be that whatever raw material comes, whether after mining or after recycling, that raw critical material has to be brought into a condition ready for proper manufacturing,” Vaishnaw said.
An official statement named electric mobility, battery energy storage systems (BESS), electronics, defence and speciality steel as the sectors the scheme will support. “This will give us huge benefit in terms of manufacturing, whether it is electronics manufacturing, semiconductor manufacturing, battery manufacturing, defence manufacturing, heavy equipment manufacturing or machinery manufacturing, in all these things where critical [minerals] are used,” said Vaishnaw.
The scheme will support the processing of Lithium and Nickel ores and intermediary products into high-purity compounds, the statement said. Cobalt is also expected to be recovered as a by-product of nickel production.
Each of the two Lithium plants will need a minimum capacity of 30 kilotonnes (kt). The two Nickel plants will each need at least 50 kt. Capital support will be capped at Rs 500 crore for each lithium beneficiary and Rs 900 crore for each nickel beneficiary, according to the statement.
Beneficiaries will be selected in two stages. Applications will first be assessed for technical qualification, and only applicants that qualify will go on to financial bidding, the statement said. For each mineral, the two beneficiaries will be chosen on a least-cost basis, meaning the bidders that seek the lowest capex support under the scheme.
The incentives will then be released in three tranches. Each tranche will be linked to specified milestones, the statement said.
The government said processing of critical minerals is concentrated in a few locations worldwide. This exposes supply chains to geopolitical disruptions, price volatility and potential supply restrictions, with implications for national security and the timely achievement of decarbonisation targets, it said.
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India remains substantially dependent on imports for refined intermediates and high-purity materials, the statement said. It attributed this to the nascent stage of domestic beneficiation and processing infrastructure for minerals including Lithium, Nickel and Cobalt. Commercial-scale processing projects in India face high capital requirements, limited availability of suitable technologies and constrained access to raw materials, it said.