Critical Minerals Scheme India: ₹2,814 Crore Explained – Impact on Lithium, Nickel and EV Batteries

Last updated: 6 November 2026

India has approved a ₹2,814 crore scheme to strengthen domestic processing of critical minerals, particularly lithium and nickel. The initiative aims to reduce dependence on imported refined materials and build a stronger supply chain for electric vehicles, battery storage, electronics, defence and other strategic industries.

The Union Cabinet approved the Capex Support Scheme to Promote Critical Mineral Processing on 4 November 2026. The programme will run for five years, from FY 2026-27 to FY 2030-31, and provide capital subsidies to eligible companies establishing processing facilities in India.

But what exactly does the scheme offer? How much financial support can companies receive, and could it eventually benefit India’s electric vehicle and battery industries? Here are the important details.

What Is the Critical Minerals Scheme India?

The Critical Minerals Scheme India is a government initiative designed to expand domestic processing capacity for lithium and nickel. It provides capital expenditure support to eligible companies setting up processing facilities in the country.

The focus is not limited to extracting minerals from the ground. The government is targeting another important stage of the supply chain: converting mineral ores and intermediate materials into high-purity products that can be used by industries.

This is a significant gap in India’s manufacturing ecosystem. Critical mineral processing is concentrated in a relatively small number of countries, leaving manufacturers exposed to geopolitical disruptions, export restrictions, supply shortages and price volatility.

By encouraging companies to establish processing facilities in India, the government aims to retain more value within the country and strengthen the domestic supply chain.

Critical Minerals Scheme India: Financial Support and Subsidy Details

The scheme has a total financial outlay of ₹2,814 crore. Eligible companies can receive a capital subsidy of 30% of their eligible investment, subject to the maximum support limits prescribed for each beneficiary.

The programme targets four processing facilities: two lithium plants and two nickel plants.

The maximum beneficiary support adds up to ₹2,800 crore: ₹1,000 crore for lithium processing and ₹1,800 crore for nickel processing. The remaining ₹14 crore, equivalent to 0.5% of the total outlay, is allocated for administrative expenses.

The entire scheme will be funded through budgetary support from the Government of India.

Why Are Lithium and Nickel Important for India?

Lithium: An Essential Material for Battery Manufacturing

Lithium is an important raw material used in many rechargeable battery technologies. It plays a major role in electric vehicles, consumer electronics and battery energy storage systems.

As electric mobility and renewable energy storage expand, manufacturers need reliable access to battery-grade lithium materials.

Under the scheme, lithium processing facilities will convert eligible ores and concentrates into high-purity, battery-grade products. Lithium brines are excluded from the proposed processing scope.

Nickel: Supporting Batteries and Industrial Manufacturing

Nickel is used in several industrial applications, including stainless steel, specialised alloys and certain lithium-ion battery chemistries.

The proposed nickel processing facilities are expected to produce high-purity products such as Class-1 nickel or battery-grade nickel sulphate. They will also recover cobalt as a by-product.

These materials are important for battery manufacturing and other industries that depend on high-quality processed minerals.

How Will Companies Be Selected for the Scheme?

The government has proposed a competitive two-stage selection process to identify companies eligible for financial support.

1. Technical qualification: Applications will first be assessed against the prescribed technical requirements. Only applicants that qualify will move to the next stage.
2. Financial bidding: Technically qualified applicants will participate in financial bidding. Selection will follow the least-cost criterion, meaning preference will be given to bidders seeking the lowest capital support under the scheme.

Two beneficiaries will be selected for each mineral, making four beneficiaries in total.

Financial assistance will be released in three instalments linked to specified project milestones. Companies must achieve the relevant milestones to receive the corresponding payments.

Will the Critical Minerals Scheme India Make Electric Vehicles Cheaper?

Not immediately.

The scheme does not provide a direct cash subsidy to people purchasing electric vehicles. Its purpose is to strengthen India’s domestic industrial processing capacity.

If the programme successfully creates competitive processing facilities, it could improve supply-chain resilience, increase domestic value addition and reduce dependence on imported processed minerals over time.

However, electric vehicle prices depend on several factors, including battery technology, raw material prices, manufacturing costs, taxes, logistics and market competition.

Consumers should therefore not expect an immediate reduction in EV prices simply because the scheme has been approved. Any potential price benefit will depend on how successfully domestic processing capacity develops and whether manufacturers can pass on the resulting cost advantages.

What Could the Scheme Mean for India’s Global Position?

Critical minerals have become strategically important as countries compete to secure materials needed for energy storage, electric mobility, electronics, defence and advanced manufacturing.

India’s challenge is not limited to finding mineral resources. It also needs the technology, investment and industrial infrastructure required to process those resources domestically.

The new scheme attempts to address this gap by encouraging investment in lithium and nickel processing facilities.

According to the government’s PIB backgrounder, the scheme is expected to anchor approximately ₹10,000 crore in investment. It is also intended to support domestic manufacturing, reduce import dependence and strengthen supply-chain resilience.

The initiative complements India’s broader efforts under the National Critical Mineral Mission to develop a more resilient domestic critical mineral value chain.

Can Ordinary Citizens Apply for the Critical Minerals Scheme?

No. The Critical Minerals Scheme India is an industrial capital-support programme, not a personal financial assistance scheme.

Its intended beneficiaries are eligible companies proposing to establish the specified lithium and nickel processing facilities.

Individuals cannot apply for the 30% capital subsidy as consumers, investors or electric vehicle buyers. The programme is designed to support industrial projects rather than provide direct financial benefits to households.

Frequently Asked Questions

What is the total outlay of India’s Critical Minerals Scheme?

The scheme has a total financial outlay of ₹2,814 crore and will operate for five years, from FY 2026-27 to FY 2030-31.

What is the subsidy under the lithium and nickel processing scheme?

The government will provide a capital subsidy of 30% of eligible investment, subject to maximum support limits of ₹500 crore per lithium beneficiary and ₹900 crore per nickel beneficiary.

How many processing plants will be established?

The programme targets four processing facilities: two lithium plants with a minimum capacity of 30,000 tonnes each and two nickel plants with a minimum capacity of 50,000 tonnes each.

Does the scheme cover cobalt?

Cobalt is expected to be recovered as a by-product of nickel processing. Lithium and nickel are the primary processing targets.

Will consumers receive money under this scheme?

No. The scheme supports eligible industrial processing projects. It does not provide direct financial assistance to consumers or electric vehicle buyers.

When was the Critical Minerals Scheme approved?

The Union Cabinet approved the Capex Support Scheme to Promote Critical Mineral Processing on 4 November 2026.

Conclusion

India’s ₹2,814 crore Critical Minerals Scheme addresses an important weakness in the domestic manufacturing ecosystem: limited capacity to process critical minerals.

By offering a 30% capital subsidy for eligible lithium and nickel processing investments, the government aims to encourage industrial capacity, strengthen domestic value addition and reduce dependence on imported refined materials.

However, the programme’s success will depend on whether selected companies can build commercially viable facilities, secure raw material supplies, access suitable technology and produce materials that meet industrial requirements.

For India’s electric vehicle and battery industries, this is a long-term supply-chain development initiative rather than an immediate consumer subsidy.

Official Sources and References

• Press Information Bureau: Cabinet Approves Capex Support Scheme to Promote Critical Mineral Processing – 4 November 2026
• Press Information Bureau: CAPEX Support Scheme to Promote Critical Mineral Processing – Government Backgrounder, 5 November 2026

Sources: Ministry of Mines and Press Information Bureau, Government of India.