India's Union Cabinet on Wednesday (November 4) approved an incentive policy worth Rs 2,814 crore (about $297 million) to process critical minerals, Information Minister Ashwini Vaishnaw said, Reuters reported. The Cabinet was chaired by Prime Minister Narendra Modi, according to the government release.

Source: The Hindu BusinessLine (Reuters)

Rs 2,814 croreTotal outlay over five years, FY 2026-27 to 2030-31
30%Capital subsidy on eligible investment
4 plantsTwo lithium (min. 30 kt each) and two nickel (min. 50 kt each)

The 'Capex Support Scheme to Promote Critical Mineral Processing' will provide targeted capital expenditure support for setting up domestic processing facilities, the Press Information Bureau said. It targets processing lithium and nickel ores and intermediary products into high-purity compounds, with cobalt expected to be recovered as a by-product of nickel production, supporting sectors including electric mobility, battery energy storage, electronics, defence and speciality steel.

Source: Press Information Bureau (via India Education Diary)

Caps and selection

Maximum capital support is capped at Rs 500 crore per lithium beneficiary and Rs 900 crore per nickel beneficiary. Beneficiaries will be chosen in two stages — technical qualification first, then financial bidding — with two beneficiaries per mineral selected on the least-cost criterion, meaning the lowest capex support sought. Incentives will be paid in three tranches linked to milestones, the government said.

Why the government says it is needed

The government said critical-mineral processing is concentrated in a few global locations, exposing supply chains to geopolitical disruption and price volatility, and that India remains substantially dependent on imports for refined intermediates and high-purity materials because domestic beneficiation and processing infrastructure for lithium, nickel and cobalt is still at a nascent stage.