India Launches Rs. 2,814 Crore Scheme for Critical Minerals
The Union Cabinet, led by Prime Minister Narendra Modi, has greenlit a significant initiative with a financial backing of Rs. 2,814 crore aimed at bolstering the country’s capacity in critical mineral processing over the next five years. This scheme is expected to enhance India’s domestic processing infrastructure, crucial for reducing reliance on imports and ensuring economic security.
Currently, the global processing of critical minerals is predominantly centered in a few regions, exposing India’s supply chains to geopolitical conflicts and price fluctuations. Such vulnerabilities not only jeopardize economic stability but also can impede national security and the pursuit of decarbonization targets. India’s heavy dependence on imports for refined intermediates, particularly in key materials like lithium, nickel, and cobalt, highlights the urgent need for a robust domestic processing capability.
Strengthening Domestic Processing Capacity
The ‘Capex Support Scheme to Promote Critical Mineral Processing’ is designed to address these challenges by providing targeted capital expenditure support for establishing and operationalizing processing facilities within India. This initiative aims to enhance value addition, promote import substitution, and reinforce end-to-end value chains for critical minerals.
The focus of the scheme will be on processing lithium and nickel ores into high-purity compounds, with cobalt anticipated as a by-product from nickel production. This development will significantly benefit sectors like electric mobility, Battery Energy Storage Systems (BESS), electronics, defense, and specialty steel.
Financial Outlay and Beneficiary Selection
The scheme outlines a financial commitment of Rs. 2,814 crore, spanning the fiscal years from 2026-27 to 2030-31. Under this plan, a capital subsidy of 30% will be available for eligible investments focused on setting up four critical processing plants: two for lithium (each with a minimum capacity of 30,000 tonnes) and two for nickel (with a minimum capacity of 50,000 tonnes). The maximum funding will reach up to Rs. 500 crore for lithium beneficiaries and Rs. 900 crore for nickel beneficiaries.
Beneficiary selection will follow a two-stage evaluation. Applicants will first undergo a technical qualification assessment, which will determine their progression to the second stage — the financial bidding process. The lowest-cost bids for each mineral will secure funding, ensuring that incentives align with cost-effective solutions.
Advancing Atmanirbhar Bharat Objectives
By supporting the development of resilient processing infrastructure, this scheme represents a pivotal move toward fulfilling the Atmanirbhar Bharat objectives. It aims to fortify India’s capabilities across the critical mineral value chain, paving the way for enhanced economic stability and security in the long run.
