India Approves 2,814 Crore Rupees in Spending to Support Lithium and Nickel Processing
Key Facts
India’s Cabinet, chaired by Prime Minister Narendra Modi, approved a plan on November 4, 2026, to support critical-mineral processing with spending of 2,814 crore rupees over 5 years, according to a statement from the Prime Minister’s Office. The initiative aims to establish 4 lithium and nickel processing plants, with capital support equal to 30% of eligible investment. The plan targets the industrial processing stage, converting ores or intermediate products into high-purity compounds. The government said India remains heavily reliant on imports to secure these materials. The decision comes as New Delhi describes domestic beneficiation and processing infrastructure as still being at an early stage.
The plan runs from fiscal year 2026-27 to 2030-31 and covers 2 lithium plants and 2 nickel plants. The government stipulated that each lithium plant must have capacity of at least 30,000 tonnes and each nickel plant at least 50,000 tonnes. The plan also targets processing lithium and nickel ores or intermediate products and converting them into high-purity compounds. The government also expects cobalt to be recovered as a byproduct of nickel production. This design focuses on building industrial capacity to process more than one mineral at the beneficiary plants.
The government set a support cap of 500 crore rupees for each beneficiary of the lithium plants and 900 crore rupees for each beneficiary of the nickel plants. The selection process begins with technical qualification of applicants, after which qualified entities submit financial bids. A statement from the Prime Minister’s Office said that selecting 2 beneficiaries for each mineral would be based on the “lowest-cost criterion,” meaning the amount of capital support required. The mechanism links the amount of support sought to competition among qualified companies. The plan therefore combines separate caps for each mineral with financial bidding to select beneficiaries.
Incentives will not be paid in a single installment; the plan calls for payment in 3 tranches tied to completion of specified project milestones. The statement did not specify the timing or details of those milestones in the information published here, but linked disbursement to their achievement. Staggering payments makes eligibility for support contingent on implementation progress. This is part of a program spanning 5 fiscal years, from 2026-27 through 2030-31. Plant construction and support disbursements are scheduled to take place during this period.
The government justified the intervention by saying that the concentration of critical-mineral processing at a limited number of sites worldwide exposes supply chains to geopolitical disruptions, price volatility and the possibility of supply restrictions. It said India’s heavy reliance on imports of refined and high-purity materials is linked to the nascent state of domestic beneficiation and processing infrastructure. The sectors the government says would benefit from expanded domestic processing include electric mobility, battery energy storage systems, electronics, defense and specialty steel. According to the statement, the plan aims to support the availability of materials needed by these activities by establishing processing capacity within the country. The spending forms part of New Delhi’s efforts to develop manufacturing links associated with critical minerals.
The plan falls under the broader National Critical Minerals Mission, which the Cabinet approved on January 29, 2025, with spending of 16,300 crore rupees over 7 fiscal years, from 2024-25 to 2030-31. The mission sets a target for domestic production to meet up to 10% of annual national demand for critical minerals by 2031. It also aims to secure at least 50 mining assets overseas, with those assets expected to meet 5% of annual demand by 2031. The mission also allocates 1,500 crore rupees to provide incentives for establishing recycling facilities. These targets place domestic production, overseas assets and recycling within a broader framework for diversifying supply sources.