India is contemplating a strategic move to bolster its lithium processing capabilities by offering incentives to private companies, as part of a broader effort to enhance domestic lithium mining and cater to the surging demand for electric vehicle (EV) battery metals.
According to three government sources, New Delhi is drafting a comprehensive critical minerals policy that includes provisions for incentivising the establishment of lithium processing facilities. Under the proposed policy, private firms would be enticed with incentives to set up lithium processing plants, marking a significant step towards achieving self-sufficiency in the EV battery metal supply chain. The policy is envisaged to cover various aspects, including exploration, mining, and value addition, with a specific focus on beneficiation and refining within the country. While the exact nature of incentives is yet to be finalised, government sources indicate that India intends to draw inspiration from successful models implemented by countries like Australia and Canada. Potential measures could include subsidies, tax benefits, and other financial incentives aimed at stimulating investment in lithium processing infrastructure.
The Ministry of Mines has affirmed that the government is actively working to ensure the availability of critical minerals for downstream industries. With the increasing emphasis on cleaner technologies across sectors such as electronics, telecommunications, transport, and defence, securing a stable supply of minerals like lithium has become paramount for India’s strategic interests. India’s recognition of 30 minerals, including lithium, as “critical” underscores the urgency to develop indigenous processing capabilities. Despite being the world’s third-largest carbon emitter, India only discovered its first lithium reserves last year, highlighting the imperative for rapid infrastructure development in the lithium value chain.
Key players in India’s burgeoning electric mobility sector, including Ola Electric, Vedanta Ltd, and Jindal Power, are actively pursuing critical minerals blocks, including lithium, to secure access to these essential resources. As the government moves forward with its critical minerals policy, stakeholders anticipate a significant boost in investment and technological advancement in the lithium processing sector, positioning India for greater self-reliance and competitiveness in the global EV market.
