The new initiative provides capital subsidies to establish domestic lithium and nickel processing plants over five years.
The Union Cabinet on Wednesday approved the Capex Support Scheme to Promote Critical Mineral Processing with a total outlay of Rs 2,814 crore, according to reports by The Indian Express, ANI and The Shillong Times.
Union Minister Ashwini Vaishnaw stated that the scheme will run from fiscal year 2026-27 to 2030-31 to build infrastructure for sectors including defence, electronics, speciality steel, electric mobility and battery energy storage systems (BESS).
The government will provide a 30 per cent capital subsidy on eligible investments to set up four processing plants. This includes two lithium plants with at least 30 kilotonnes (kt) capacity each and two nickel plants with at least 50 kt capacity each.
Financial support for these projects is capped at Rs 500 crore per lithium beneficiary and Rs 900 crore per nickel beneficiary. Cobalt recovery is also planned as a by-product of nickel production.
Beneficiaries will be chosen through a two-stage process involving technical qualification followed by financial bidding based on the lowest capital expenditure support requested. Incentives will be released in three tranches tied to project milestones.
The government has identified Andhra Pradesh, Gujarat, Odisha and Maharashtra to host these facilities. Gujarat and Andhra Pradesh are designated for rare earth processing, while Odisha and Maharashtra will focus on nickel and lithium respectively.
