India Proposes ₹2,800 Crore Critical Minerals Processing Scheme 2026
Key points
Why in the News?
The Union Cabinet is expected to consider a proposed ₹2,800 crore Critical Minerals Processing Scheme to strengthen India's domestic processing capabilities for lithium and nickel. The proposal includes a 30% capital subsidy for eligible investments and aims to reduce dependence on imported processed minerals.
Key Features of the Proposed Scheme
The proposed ₹2,800 crore scheme aims to establish domestic processing facilities for critical minerals used in batteries, electric vehicles, electronics and advanced manufacturing.
1. Financial Assistance
Total proposed outlay: ₹2,800 crore
Capital subsidy: 30% of eligible investment
Lithium processing: Maximum ₹500 crore assistance per beneficiary
Nickel processing: Maximum ₹900 crore assistance per beneficiary
Proposed facilities: Four mineral processing plants
2. Proposed Processing Capacity
Mineral | Number of Plants | Minimum Capacity per Plant |
|---|---|---|
Lithium | 2 | 30 kilotonnes |
Nickel | 2 | 50 kilotonnes |
Cobalt | By-product of nickel processing | Not separately specified |
Important: One kilotonne (kt) equals 1,000 metric tonnes.
What Are Critical Minerals?
Critical minerals are minerals that are economically and strategically important but may face supply risks because of limited availability, geographical concentration or dependence on foreign suppliers.
These minerals are essential for clean energy technologies, advanced electronics, defence equipment and industrial manufacturing.
Important Critical Minerals and Their Uses
Critical Mineral | Major Uses |
|---|---|
Lithium | Lithium-ion batteries, electric vehicles, energy storage |
Nickel | Batteries, stainless steel and industrial alloys |
Cobalt | Battery cathodes and high-performance alloys |
Rare Earth Elements | Electric motors, magnets, electronics and defence |
Graphite | Battery anodes and industrial applications |
States Identified for Critical Mineral Processing Parks
Four states have been identified for developing critical mineral processing ecosystems.
State | Proposed Mineral Focus |
|---|---|
Gujarat | Rare Earth Elements |
Andhra Pradesh | Rare Earth Elements |
Odisha | Nickel |
Maharashtra | Lithium |
These state-level plans are part of India's broader critical mineral processing strategy. They should not be confused with final locations approved under the proposed ₹2,800 crore scheme.
Why Is This Scheme Important for India?
1. Reducing Import Dependence
India relies heavily on imports for several critical minerals and their processed forms.
Domestic processing facilities could reduce exposure to international supply disruptions.
2. Supporting Electric Vehicles
Lithium, nickel and cobalt are important materials used in lithium-ion batteries.
Improved domestic processing capacity could support India's electric vehicle manufacturing industry.
3. Strengthening Renewable Energy Infrastructure
Battery Energy Storage Systems (BESS) help store electricity generated from renewable energy sources such as solar and wind.
Reliable supplies of battery minerals are important for expanding these technologies.
4. Improving Supply Chain Security
Global critical mineral processing is highly concentrated, particularly in China.
Developing domestic processing capabilities could strengthen India's strategic and industrial resilience.
5. Supporting Advanced Manufacturing
The proposed scheme could benefit:
Electric vehicle manufacturing
Battery manufacturing
Electronics
Defence industries
Speciality steel
Energy storage systems
National Critical Mineral Mission (NCMM)
The National Critical Mineral Mission is an important Indian government initiative aimed at strengthening the country's critical mineral supply chain.
Its broader objectives include:
Increasing domestic exploration of critical minerals.
Supporting overseas mineral acquisition.
Improving mineral processing and recycling capabilities.
Strengthening supply chain resilience.
Encouraging research and technological development.
The proposed ₹2,800 crore processing scheme is consistent with these broader objectives, but it is a separate proposal and should not be described as an approved component without official confirmation.
Conclusion
India's proposed ₹2,800 crore Critical Minerals Processing Scheme represents an effort to strengthen domestic mineral processing capabilities and reduce reliance on imported processed materials.
The proposed 30% capital subsidy could encourage investments in lithium and nickel processing, supporting electric vehicles, battery storage, electronics and other strategic industries.
