India Puts ₹2,814 Crore Behind Lithium and Nickel Processing

India's Union Cabinet has approved a ₹2,814 crore (roughly $335 million) capital expenditure scheme to build domestic lithium and nickel processing capacity, running five years from FY 2026-27 to FY 2030-31. Prime Minister Narendra Modi chaired the cabinet session that cleared the Capex Support Scheme to Promote Critical Mineral Processing.

The money funds exactly four plants, and the capacity terms are already fixed. The scheme offers a capital subsidy of 30% of eligible investment for two lithium processing plants with a minimum capacity of 30 kt each, and two nickel processing plants with a minimum capacity of 50 kt each. Support is capped at ₹500 crore per lithium beneficiary and ₹900 crore per nickel beneficiary.

Why the state is paying

The policy logic is supply-chain exposure. Critical mineral processing is concentrated in a few countries, which leaves global buyers exposed to geopolitical disruption, price swings and potential supply restrictions. India currently imports refined intermediates and high-purity materials because its domestic beneficiation (the upgrading of raw ore ahead of chemical processing) and processing infrastructure for lithium, nickel and cobalt remains at an early stage.

The plants will process lithium and nickel ores and intermediate products into high-purity compounds. Cobalt is also expected to be recovered as a by-product of nickel processing — a detail that matters for battery cell makers tracking precursor supply.

How beneficiaries will be picked

Selection runs through a two-stage process:

• Stage one: technical evaluation of applicants.
• Stage two: financial bidding among technically qualified applicants.

Two beneficiaries will be selected per mineral, based on the lowest capital expenditure support sought. Incentives are disbursed in three tranches, each tied to achievement of specified milestones — a structure that shifts delivery risk onto the processor rather than the exchequer.

What does this change for manufacturers?

For battery, electronics, defence and speciality steel producers in India, the scheme targets the upstream gap between imported ore and usable high-purity compounds. Downstream sectors named in the approval include electric mobility and battery energy storage systems (BESS). If the four plants come online as planned, cell manufacturers gain a domestic route to battery-grade lithium and nickel compounds, and cobalt recovery adds a third critical input to the mix.

This is a confirmed cabinet approval with a fixed outlay, not a stated intention. What remains open is execution: no beneficiary has been named, no plant sites are identified, and disbursement depends on milestone verification. Watch for the first technical evaluation round and the financial bidding results — the capacity commitments of the winning bidders will show whether India lands 60 kt of lithium processing and 100 kt of nickel processing, or less.