India Clears ₹2,814 Cr Scheme for Lithium and Nickel Processing

How the subsidy works

Beneficiaries will receive milestone-linked capital subsidies covering 30% of eligible investment, subject to thresholds. For lithium, support is capped at ₹500 crore per beneficiary, and each plant must have a minimum capacity of 30 kilo-tonnes. For nickel, the cap is ₹900 crore per beneficiary, with a minimum capacity of 50 kilo-tonnes per plant.

Applicants will be chosen in two stages: a technical assessment first, then financial bidding. Selection follows a least-cost criterion, so qualified bidders asking for the lowest capex support win. Incentives will be paid in three tranches tied to milestones rather than upfront.

Why it matters

The government says critical mineral processing is concentrated in a handful of global locations, which leaves supply chains exposed to geopolitical disruption, price volatility and possible restrictions. India is currently 100% import-dependent for raw and refined forms of many critical minerals, including lithium, cobalt and nickel.

By focusing on processing rather than mining alone, the scheme aims to keep more value in India. The resulting capacity is expected to serve electric mobility, battery energy storage systems, electronics, defence and speciality steel.

The road ahead is not simple, as beneficiaries will also have to secure raw materials and processing capabilities. This is the second such scheme in a year: in December 2025, the Cabinet cleared a ₹1,500 crore incentive scheme to build at least 270 kilotons of annual recycling capacity for critical minerals.