Cabinet approves ₹2,814 crore scheme to back four lithium and nickel processing plants in India
A new five-year scheme offers a 30% capital subsidy for two lithium and two nickel refining plants, targeting India's heavy dependence on imported battery-grade chemicals.
India remains substantially dependent on imports of refined intermediates and high-purity critical-mineral materials, according to the Cabinet release. That leaves its plans for electric vehicles, grid batteries and electronics exposed to a narrow set of overseas suppliers. On 4 November 2026 the Union Cabinet approved a ₹2,814 crore scheme to address the processing gap: capital support for four plants, two for lithium and two for nickel, that turn ores and intermediates into the high-purity compounds battery and electronics makers buy.
It came the same day as a separate ₹14,500 crore scheme for 92 GWh of grid-scale energy storage.
The scheme at a glance
Based on reports of the Cabinet decision:
- Support: a 30% capital subsidy on eligible investment.
- Plants: two lithium processing plants, each with a minimum capacity of 30 kilotonnes, and two nickel processing plants, each with a minimum capacity of 50 kilotonnes.
- Caps: up to ₹500 crore per lithium beneficiary and ₹900 crore per nickel beneficiary.
- Period: FY2026-27 to FY2030-31.
- By-products: cobalt is expected to come out of nickel processing, but it has no plant or subsidy cap of its own.
The per-plant caps add up to ₹2,800 crore (2 × ₹500 crore plus 2 × ₹900 crore), close to the ₹2,814 crore total. In practice the money will go to a few large, well-capitalised projects rather than many small ones.
Why processing, not mining
When policymakers talk about critical minerals, the first concern is usually mining. For lithium and nickel, though, the main bottleneck sits further along the chain, at refining. Battery makers need lithium carbonate or hydroxide and nickel sulphate at very high purity, and a small number of countries dominate the conversion of raw concentrate into these chemicals.
The government's case for the scheme is exactly that dependence. India imports most of its refined and high-purity lithium, nickel and cobalt because domestic processing is still at an early stage. Commercial projects face high capital costs, limited access to technology and uncertain supply of raw material. A 30% capital subsidy targets the first of these directly.
Selection and disbursement
The primary Cabinet release specifies technical qualification followed by financial bids. For each mineral, two beneficiaries are to be selected on the lowest capital support sought; incentives will be disbursed in three milestone-linked tranches.
Why it matters for Indian deep tech
Processed lithium and nickel feed several sectors this publication covers regularly:
- Battery cells and storage. The 30 GWh battery tranche of the new storage scheme comes with a 40% domestic-content requirement. Cell makers under the PLI-ACC programme will need cathode and precursor materials. Refined lithium and nickel are the starting point for both. The same week, MeitY also gave its first ECMS approval for cathode active material.
- Electric mobility. Nickel-rich chemistries (NMC) are still widely used in performance EVs, and lithium is needed for every lithium-ion chemistry, including LFP.
- Advanced materials and electronics. High-purity nickel is used in superalloys, plating and some semiconductor processes.
There is a strategic side as well. Supply chains for battery-grade chemicals have repeatedly been disrupted by export controls and price shocks. A country that refines its own lithium and nickel, even from imported ore, has more control over timing and pricing, and over which partners it relies on for the most sensitive stages.
Each refining plant built in India keeps more of the battery value chain in the country. It also gives domestic start-ups that work on cathode chemistry, recycling or new cell formats a local source of qualified feedstock.
The hard parts
A subsidy is only one input. Global lithium and nickel refining has gone through sharp price swings in recent years, and new refineries elsewhere have struggled when prices fell. Indian projects will have to:
- Secure feedstock. India's domestic lithium finds are still at the exploration and auction stage, so early plants will probably rely on imported spodumene, brine-derived intermediates or nickel matte.
- Get the technology right. Hydrometallurgical refining to battery grade is a specialised process. Licensing or partnering with experienced operators may be needed.
- Qualify with customers. Cell makers test new material suppliers for a long time before they commit volume.
- Manage environmental impact. Nickel processing in particular produces large waste streams that need careful handling.
The scheme's five-year window is short for projects of this kind. Selecting beneficiaries quickly, and the guidelines the Ministry of Mines issues next, will decide whether all four plants can be running before the support period ends.
What to watch next
The next milestones are detailed scheme guidelines, the bidding or application process for the four plant slots, and the names of the applicants. Indian metals groups, battery-materials start-ups and joint ventures with overseas refiners are all possible bidders. If the scheme draws strong applicants, India could expand its commercial lithium and nickel processing capacity before the end of the decade, which would make its battery ambitions considerably more secure.
Sources
- https://www.business-standard.com/india-news/cabinet-clears-2-814-crore-support-for-lithium-nickel-processing-plants-126110401937_1.html
- https://inc42.com/buzz/cabinet-clears-%E2%82%B92814-cr-scheme-to-boost-lithium-nickel-processing/
- https://www.thestatesman.com/cities/delhi/cabinet-approves-4-critical-mineral-processing-plants-with-rs-2814-crore-push-1503658787.html
- https://yourstory.com/2026/11/cabinet-approves-rs-2814-cr-scheme-to-promote-processing-of-lithium-nickel
- https://www.saurenergy.com/solar-energy-news/cabinet-approves-rs2814-crore-critical-mineral-processing-scheme-till-2031-12784953
- https://www.thejanpost.com/pm-modi-hails-rs-2814-crore-critical-mineral-processing-scheme/
- https://chartforest.com/critical-mineral-processing-scheme/
- https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=2332476&lang=2®=48