Union Cabinet Clears ₹2,814 Crore CAPEX Support Scheme for Domestic Lithium and Nickel Processing

Key facts

• The Union Cabinet approved the CAPEX Support Scheme to Promote Critical Mineral Processing on 4 November 2026 with a total outlay of ₹2,814 crore, to be implemented over five years from FY 2026-27 to FY 2030-31.
• The scheme offers a 30% capital subsidy of eligible investment for setting up four processing plants: two Lithium plants of at least 30 kt capacity each and two Nickel plants of at least 50 kt capacity each.
• Support is capped at ₹500 crore per Lithium beneficiary and ₹900 crore per Nickel beneficiary, amounting to ₹1,000 crore for Lithium and ₹1,800 crore for Nickel, with ₹14 crore set aside for administrative expenses.
• Beneficiaries will be selected through a two-stage competitive process of technical qualification followed by financial bidding on the least-cost criterion, with two beneficiaries per mineral.
• Incentives will be released in three tranches linked to investment and equity milestones, and plants must be commissioned within three years of the Letter of Award, extendable to five years with a tapering mechanism on undisbursed support.
• The scheme is expected to anchor about ₹10,000 crore of investment and create 60 kt of Lithium and 100 kt of Nickel processing capacity to meet projected demand by 2030.
• Lithium plants will process ores and concentrates (excluding brines) into battery-grade products, while nickel plants will produce Class-1 nickel or battery-grade nickel sulphate with cobalt recovery.
• A three-tier governance structure will oversee the scheme: an Apex Governing Council chaired by the Secretary, Ministry of Mines; a Techno-Financial Committee for evaluation; and a Project Management Agency for implementation.
• The scheme complements the National Critical Mineral Mission launched in January 2025, under which a ₹1,500 crore recycling scheme was approved on 3 September 2025; India has identified 24 critical minerals and auctioned 64 critical and strategic mineral blocks plus 11 Exploration Licence blocks.