INDIA —The Union Cabinet, chaired by Prime Minister Narendra Modi, has sanctioned a capital expenditure support scheme with an outlay of INR28.14 billion to build domestic processing capacity for critical minerals. Spanning a five-year implementation period from FY 2026-27 to FY 2030-31, the federal program provides capital subsidies to establish two lithium processing units and two nickel processing units within the country.
The Union Cabinet operates as the principal executive authority of the Government of India, directing economic policy, national security frameworks, and industrial funding strategies. The Ministry of Mines oversees the administration of mineral resource development, geological surveys, and critical raw material supply security across India.
The scheme provides a 30 percent capital subsidy for eligible capital investments, capping support at INR5 billion per lithium processing beneficiary and 9 billion Indian rupees per nickel processing beneficiary. The minimum processing capacity is set at 30 kilotonnes per year for each lithium plant and 50 kilotonnes per year for each nickel facility, which will also recover cobalt as a by-product. Beneficiaries will be selected through a two-stage competitive process involving technical qualification and financial bidding based on the lowest capital subsidy requested, with disbursements structured across three milestone-linked tranches.
This policy intervention addresses severe global supply chain concentration and reduces India's reliance on imported refined mineral intermediates. For electric vehicle manufacturers, battery storage developers, defense contractors, and specialized steel producers, establishing localized refining infrastructure enhances supply chain resilience, mitigates raw material price volatility, and supports long-term industrial decarbonization objectives.
