New Delhi, India – The Union Cabinet, led by Prime Minister Narendra Modi, has greenlit a significant Capex Support Scheme to Promote Critical Mineral Processing. The initiative, valued at ₹2,814 crore, is designed to run for five years, from fiscal year 2026-27 to 2030-31, aiming to reduce India's reliance on imported refined materials.
Prime Minister Modi took to social media to articulate the scheme's urgency. "Do you feel India should depend on other countries for processing the critical minerals that power our future? I certainly don’t!" he wrote. Modi highlighted that essential minerals such as lithium, nickel, and cobalt are vital for electric vehicles (EVs), batteries, electronics, and defence applications, yet India remains heavily dependent on imports of their refined forms.
Boosting Domestic Processing Capabilities
The newly approved scheme seeks to address this dependency by fostering robust domestic processing infrastructure. Key highlights of the plan include:
- Establishment of new critical mineral processing plants.
- Provision of capital subsidies to stimulate investment in these facilities.
- Emphasis on greater domestic value addition across the supply chain.
- Efforts to build stronger, more resilient supply chains within India.
The government will offer a capital subsidy amounting to 30% of the eligible investment for setting up four processing facilities. This includes two lithium processing plants, each with a minimum capacity of 30,000 tonnes, and two nickel processing plants, each capable of processing at least 50,000 tonnes. Cobalt is also expected to be recovered as a valuable by-product of nickel production.
Financial Assistance and Beneficiary Selection
Financial assistance under the scheme will be capped at ₹500 crore for each lithium beneficiary and ₹900 crore for each nickel beneficiary. The selection of companies to receive this support will follow a rigorous two-stage process:
- Companies must first meet specific technical qualification requirements.
- Qualified companies will then participate in a financial bidding process, where beneficiaries will be chosen based on the lowest capital subsidy sought.
Two beneficiaries will be selected for each mineral. Government assistance will be disbursed in three instalments, tied to the achievement of specified project milestones.
This strategic move underscores India's commitment to self-reliance and its ambition to build indigenous capabilities in technologies of the future, supporting crucial sectors like electric mobility, battery energy storage, electronics manufacturing, and defence production.