The Union Cabinet has approved a Rs 2,814 crore scheme to build domestic processing capacity for lithium and nickel, a move aimed at reducing India’s dependence on overseas facilities for critical minerals used across strategic industries and emerging infrastructure systems.
The scheme, approved on Wednesday, will support the processing of lithium and nickel ores or intermediary products into high-purity compounds. Cobalt is also expected to be recovered as a by-product of nickel production, according to the Union ministry of mines.
Prime Minister Narendra Modi said India could not afford to depend on other countries for processing critical minerals. He said the scheme would encourage domestic investment and help secure future supplies in a post on X cited by the Times of India.
The ministry said processing of critical minerals is currently concentrated in a few locations globally. By supporting facilities within India, the scheme is intended to develop domestic processing capabilities, promote value addition and lower import dependence. The approval covers the processing stage rather than the extraction of minerals alone, placing emphasis on the industrial capacity needed to convert raw materials or intermediate products into usable compounds.
The programme will remain in effect until the financial year 2030-31. It will provide a capital subsidy equal to 30% of eligible investment for four proposed plants: two lithium processing facilities and two nickel processing facilities.
Each lithium plant will have to meet a minimum processing capacity of 30,000 tonnes, while each nickel plant will require a minimum capacity of 50,000 tonnes. The subsidy will be capped at Rs 500 crore for each lithium beneficiary and Rs 900 crore for each nickel beneficiary.
Taken together, the four-plant structure sets minimum targeted capacity of 60,000 tonnes for lithium processing and 100,000 tonnes for nickel processing. The subsidy ceilings mean the scheme could provide up to Rs 1,000 crore for the two lithium facilities and up to Rs 1,800 crore for the two nickel facilities, matching the scheme’s total outlay of Rs 2,814 crore when combined with the remaining programme support.
The decision is also relevant to the wider built environment because domestic mineral-processing capacity depends on industrial sites, utilities, logistics networks, environmental controls and reliable power and water infrastructure. However, the supplied announcement does not specify the locations of the proposed plants, the beneficiaries, the project-award process or the construction schedule.
The Cabinet’s approval therefore establishes the financial framework and capacity targets, while the next operational milestones will involve identifying eligible projects and implementing the facilities before the scheme ends in FY31.
