The Union Cabinet has approved a Rs 2,814 crore critical mineral processing scheme to set up domestic lithium and nickel processing capacity in India. Union Minister Ashwini Vaishnaw announced the decision at a Cabinet briefing on 4 November 2026.
The programme is titled the “Capex Support Scheme to Promote Critical Mineral Processing” and runs over five years, from financial year 2026-27 to 2030-31.
What Does the Critical Mineral Processing Scheme Offer?
The scheme provides capital expenditure assistance to set up and run domestic facilities that convert lithium and nickel ores, or intermediate products, into high-purity compounds. Cobalt recovery is planned as a by-product of nickel production. The facilities are meant to serve electric mobility, battery energy storage, defence, electronics and specialty steel.
Support is a capital subsidy of 30% of eligible investment for four units: two lithium facilities with a minimum capacity of 30 kilotonnes each and two nickel facilities with a minimum capacity of 50 kilotonnes each. The ceiling is Rs 500 crore per lithium beneficiary and Rs 900 crore per nickel beneficiary.
How Will Beneficiaries Be Selected?
Selection is a two-stage process: a technical qualification assessment followed by financial bidding. Two beneficiaries per mineral will be chosen on a least-cost basis, meaning the lowest capital support requested. Incentives will be disbursed in three tranches tied to project milestones.
Why the Government Is Backing Domestic Processing
The Cabinet noted that “Processing of critical minerals remains geographically concentrated in a few global locations.” The scheme aims to reduce dependence on overseas shipments of refined intermediates and high-purity materials, add domestic value, substitute imports and build end-to-end supply chains, in line with the Atmanirbhar Bharat agenda.
Market and Trade Reaction
No industry body or market reaction had been reported in the sources reviewed at the time of writing.
What Happens Next?
The sources do not give a bidding timeline. Interested companies will have to clear the technical qualification stage and then bid on the level of capital support they need.
Frequently Asked Questions
How much is the critical mineral processing scheme?
The outlay is Rs 2,814 crore over five years, from 2026-27 to 2030-31.
Which minerals are covered?
Lithium and nickel, with cobalt recovered as a by-product of nickel production.
How much subsidy will units get?
A 30% capital subsidy on eligible investment, capped at Rs 500 crore per lithium unit and Rs 900 crore per nickel unit.
Source: ANI via The Tribune and Asianet News, 4 November 2026.
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