The Union Cabinet has approved a ₹2,814 crore capital expenditure support scheme to strengthen India's domestic critical mineral processing industry, marking an important step towards reducing dependence on imported high-purity materials used in advanced manufacturing.
The scheme, titled the Capex Support Scheme to Promote Critical Mineral Processing, will be implemented over five financial years, from 2026–27 to 2030–31. Information and Broadcasting Minister Ashwini Vaishnaw announced the Cabinet's decision on November 4, 2026.
Editorial Insight
Key Highlights
Important points readers should notice.
Issue/Event: Approval of a ₹2,814 crore critical mineral processing support scheme.
Location: India.
Authority/Organisation: Union Cabinet and Ministry of Mines.
Action Taken: Approved capital support for two lithium and two nickel processing plants.
- Impact: Expected to strengthen domestic mineral processing, manufacturing capacity and supply-chain security.
The initiative focuses on establishing four domestic processing plants: two for lithium and two for nickel. These facilities are expected to process mineral ores and intermediate materials into high-purity compounds required by industrial manufacturers.
Under the scheme, the government will provide a capital subsidy of 30% of eligible investment. Each lithium processing plant must have a minimum capacity of 30,000 tonnes, while each nickel processing plant must have a minimum capacity of 50,000 tonnes.
The maximum government capital support will be capped at ₹500 crore for each lithium beneficiary and ₹900 crore for each nickel beneficiary.
Editorial Analysis
Why This Matters
Critical minerals are essential to modern manufacturing, energy infrastructure and several strategic industries. Lithium is an important raw material for lithium-ion batteries, which are used in electric vehicles, energy storage systems and electronic devices. Nickel is used in stainless steel, industrial alloys and certain battery chemistries. Cobalt, which can be recovered during nickel processing, is also important for selected battery applications. India's ability to process these materials domestically can help manufacturers reduce exposure to international supply disruptions and improve the availability of industrial inputs. The scheme is also significant for Indian companies considering investments in mineral processing, refining technology, engineering infrastructure and advanced manufacturing.
The selection of participating companies will take place through a two-stage process. Applicants will first undergo technical evaluation. Those qualifying will proceed to financial bidding, where two beneficiaries for each mineral will be selected based on the lowest capital support sought.
The financial assistance will be released in three instalments linked to the achievement of specified project milestones.
Another important component is the recovery of cobalt as a by-product of nickel processing. Cobalt is an important material used in certain battery technologies and other industrial applications.
The proposed facilities are expected to support several manufacturing sectors, including electric mobility, battery energy storage systems, electronics, defence equipment and speciality steel.
India has been working to strengthen its critical mineral supply chains as domestic processing infrastructure remains limited for several strategically important materials. Dependence on imported refined intermediates and high-purity compounds can expose manufacturers to international price fluctuations, export restrictions and geopolitical disruptions.
The new scheme seeks to address part of this challenge by encouraging investment in domestic processing facilities and increasing value addition within the country.
However, the Cabinet approval does not mean that all four plants are already operational or that the entire financial allocation has been disbursed. Project implementation will depend on company selection, investment commitments, construction progress and the achievement of the prescribed milestones.
The initiative is expected to strengthen India's ability to convert mineral resources and intermediate materials into industrial inputs, supporting the country's broader manufacturing and supply-chain development objectives.
