The government approved Capex Support Scheme to Promote Critical Mineral Processing, with a financial outlay of ₹2,814 crore over five years. The scheme aims to strengthen India’s domestic processing capabilities for critical minerals, particularly lithium and nickel, while reducing import dependence and building resilient supply chains.
Strengthening India’s Critical Mineral Supply Chains
The global processing of critical minerals remains concentrated in a limited number of countries. Consequently, supply chains face risks from geopolitical disruptions, price volatility and potential export restrictions. These challenges can affect national security, economic sovereignty and the timely achievement of decarbonisation targets.
Currently, India relies substantially on imports for refined intermediates and high-purity critical mineral materials. This dependence reflects the early stage of domestic beneficiation and processing infrastructure for minerals such as lithium, nickel and cobalt.
Moreover, establishing commercial-scale processing facilities involves significant capital investment, access to suitable technologies and reliable raw material supplies. Therefore, developing domestic processing infrastructure is essential to increase value addition, substitute imports and establish integrated, resilient supply chains.
Scheme to Promote Domestic Lithium and Nickel Processing
Against this backdrop, the government has introduced the Capex Support Scheme to encourage investment in domestic critical mineral processing facilities. The scheme will support the establishment and operationalisation of processing plants in India, focusing on converting lithium and nickel ores and intermediate products into high-purity compounds. It will also facilitate the recovery of cobalt as a by-product of nickel production.
These initiatives will strengthen domestic value addition and support critical industries, including:
Electric mobility and battery manufacturing
Battery Energy Storage Systems (BESS)
Electronics manufacturing
Defence and aerospace
Speciality steel
₹2,814 Crore Financial Outlay and Capital Subsidies
The government will implement the scheme over five years, from FY 2026-27 to FY 2030-31, with a total financial allocation of ₹2,814 crore. Under the scheme, eligible investors will receive a capital subsidy covering 30% of their eligible investment. The government plans to support the establishment of four critical mineral processing plants. The proposed facilities will expand India’s capacity to process critical minerals and produce high-purity materials for domestic industrial applications.
Two-Stage Selection and Milestone-Based Incentives
The government will select beneficiaries through a two-stage evaluation process. First, authorities will assess applications against technical qualification criteria. Only applicants meeting these requirements will proceed to the second stage, which involves financial bidding. For each mineral, the government will select two beneficiaries based on the least-cost criterion. Accordingly, bidders seeking the lowest capital expenditure support under the scheme will receive preference. Furthermore, the government will disburse incentives in three instalments linked to the achievement of specified project milestones. This approach will connect financial assistance with project implementation and operational progress.
Supporting Atmanirbhar Bharat and Industrial Growth
The Capex Support Scheme represents a step towards advancing the government’s Atmanirbhar Bharat initiative. By encouraging domestic investment in critical mineral processing, it aims to strengthen India’s position across the critical mineral value chain. In addition, the development of indigenous processing facilities will help reduce import dependence, improve supply chain resilience and support the growing demand for high-purity materials from electric mobility, energy storage, electronics, defence and other strategic industries. As reported by thehindubusinessline.com, the scheme seeks to establish a stronger domestic foundation for critical mineral processing while supporting India’s long-term manufacturing, energy transition and economic security objectives.
