Key Details
The CAPEX Support Scheme to Promote Critical Mineral Processing addresses the step between securing mineral supplies and making materials that battery and other manufacturers can use. It runs from FY 2026–27 to FY 2030–31.
Provision | Approved Scheme |
|---|---|
Public outlay | ₹2,814 crore, including ₹14 crore for administration |
Plants supported | Two lithium plants of at least 30,000 tonnes capacity each and two nickel plants of at least 50,000 tonnes each |
Capital subsidy | 30% of eligible investment, capped at ₹500 crore per lithium plant and ₹900 crore per nickel plant |
Products | Battery-grade lithium products from ores and concentrates, excluding brines; Class-1 nickel or battery-grade nickel sulphate, with cobalt recovery as a by-product |
Selection and payment | Technical qualification followed by bidding for the lowest subsidy sought; support released against investment, equity and commissioning milestones |
Beneficiaries are expected to commission plants within three years of their award. Support tapers for delays beyond three years, with a five-year outer limit.
Processing Is the Missing Link
India’s critical-mineral efforts have included exploration, mineral-block auctions and recycling. The new scheme, approved under the broader National Critical Mineral Mission, targets a different gap: limited domestic capacity to convert lithium and nickel-bearing materials into the high-purity products needed for batteries, electric mobility, electronics and other industries.
The government says India remains substantially dependent on imported refined intermediates. Building plants at home could reduce that exposure and retain more value from processing in India. It would not, by itself, remove dependence on imported raw materials; reliable feedstock and suitable processing technology remain important to whether the plants can operate competitively.
Subsidy Payments Are Tied to Project Progress
The scheme is designed to lower the high upfront cost of commercial-scale processing while limiting support to selected projects. Applicants must first qualify technically; eligible bidders then compete on the amount of capital support they seek. Payments are linked to capital spending, equity contributions and commissioning, rather than being released in full when a project is selected.
The government expects the scheme to attract about ₹10,000 crore of processing investment and establish a combined minimum capacity of 60,000 tonnes for lithium and 100,000 tonnes for nickel across the four plants. These are intended outcomes, not operating capacity or investment already realised.
Policy Relevance
The scheme moves India’s mineral-security effort from access to minerals towards domestic conversion into usable industrial inputs. Whether it reduces import exposure will depend on more than constructing facilities: plants need dependable raw-material supply, proven technology, environmental compliance and buyers for their output.
The most useful measures of progress will be projects selected, private capital actually invested, plants commissioned and high-purity material produced at competitive cost. Those results will show whether the subsidy has strengthened the supply chain for downstream manufacturers rather than only funding new capacity on paper.
Relevant Question for Policy Stakeholders: Can the four supported plants secure raw materials and processing technology at costs that allow Indian battery and industrial manufacturers to use their output competitively?
Follow the Full Update Here: CAPEX Support Scheme to Promote Critical Mineral Processing | Cabinet approval