India's Cabinet Approved a Rs 2,814 Crore Scheme on 4 November 2026 to Build Two Lithium and Two Nickel Processing Plants for Battery Materials

On 4 November 2026 the Union Cabinet, chaired by the Prime Minister, approved a Rs 2,814 crore (Rs 28.14 billion) scheme to build four plants in India that turn lithium and nickel ore into battery-grade products, two plants for each metal. The Press Information Bureau (PIB), the government’s release agency, says the scheme fills “the missing link in processing” between mining and manufacturing. It runs from the financial year 2026-27 to 2030-31 and is paid for entirely from the central budget.

What the Cabinet approved

The scheme is called the Capex Support Scheme to Promote Critical Mineral Processing. “Capex” is capital expenditure, the money spent to build a plant. The government pays 30 per cent of eligible investment for four plants, with a ceiling on each: Rs 500 crore for a lithium plant and Rs 900 crore for a nickel plant.

The PIB backgrounder of 5 November adds up the ceilings: Rs 1,000 crore for the two lithium plants and Rs 1,800 crore for the two nickel plants, Rs 2,800 crore in all. A further Rs 14 crore, which it puts at 0.5 per cent of the outlay, covers administration. A plant reaches its ceiling at eligible investment of about Rs 1,667 crore for lithium and Rs 3,000 crore for nickel. That is tuput’s arithmetic from the 30 per cent rate, not a figure in the release.

Each plant has a minimum size. The two lithium plants must handle at least 30 kt each and the two nickel plants at least 50 kt each, where kt is a kilotonne, or 1,000 tonnes. The PIB backgrounder expects the scheme to create 60 kt of lithium and 100 kt of nickel processing capacity to meet projected demand by 2030, which is the sum of the minimums.

What the plants will make

The PIB backgrounder is specific about the products. Lithium plants will process ores and concentrates, excluding brines, into battery-grade products. Nickel plants will produce Class-1 nickel or battery-grade nickel sulphate, with cobalt recovered along the way. Class-1 is the high-purity grade of nickel metal. Brines are lithium-bearing salt water pumped from underground, a different raw material from hard rock ore, and the scheme leaves them out.

The Cabinet release says the high-purity output will support electric mobility, battery energy storage systems, electronics, defence and speciality steel. The backgrounder adds that refined output will feed battery material, battery cell and speciality steel manufacturing, and it expects about Rs 10,000 crore of processing investment.

How the plants are chosen and paid

Selection runs in two stages. Applications are first judged on technical grounds, and only technically qualified applicants may bid in the second stage. Bidders then state how much capital support they need, and the two lowest bids for each mineral win. The PIB backgrounder calls this the least-cost criterion. Two lithium and two nickel beneficiaries make four in all.

The money comes in three tranches. The first release brings the subsidy to 25 per cent of the quoted amount once the beneficiary has spent 25 per cent of its committed capex and put in at least 15 per cent of the minimum required equity. The second brings it to 50 per cent after 50 per cent of the capex is spent and at least 50 per cent of the equity is in. The rest follows commissioning, with all of the minimum equity contributed.

A plant must be commissioned within three years of its Letter of Award. If it runs late, the unpaid part of the support shrinks on a sliding scale until the fifth year, and commissioning must be complete within five years in every case. A Governing Council chaired by the Secretary of the Ministry of Mines makes the final selection, a Techno-Financial Committee of technical and financial experts evaluates applications, and a Project Management Agency supports the work.

Why the processing step gets its own scheme

The Cabinet release says processing of critical minerals “remains geographically concentrated in a few global locations”, which exposes supply chains to disruption, price swings and export limits. The International Energy Agency (IEA) measured the same pattern in its Global Critical Minerals Outlook 2025. The average share of the top three refining countries for key energy minerals rose from about 82 per cent in 2020 to 86 per cent in 2024, and some 90 per cent of the growth in supply came from one country in each case, Indonesia for nickel and China for cobalt, graphite and rare earths.

The IEA also says capital costs for projects in diversified regions are typically around 50 per cent higher than for the incumbent producers, and that public financing can help bring such projects forward. The PIB backgrounder makes a matching point about India: domestic processing is “currently not viable under prevailing market conditions”, because plants need advanced equipment, multi-stage conversion systems and strict environmental safeguards, and access to technology and raw materials is limited. India has identified 24 critical minerals, the backgrounder says, and meets its need for refined intermediates and high-purity materials largely through imports.

Business Standard reported that industry figures welcomed the scheme. Attero’s chief executive, Nitin Gupta, called domestic processing capacity a key gap in the value chain, and LOHUM’s founder, Rajat Verma, said it could help India move from importing refined materials towards domestic supply. The Prime Minister said in a post on X that lithium, nickel and cobalt are essential for electric vehicles, batteries, electronics and defence, and that India remains heavily dependent on imports of refined materials, as reported by PTI.

Where it sits in the National Critical Mineral Mission

The scheme is the processing leg of the National Critical Mineral Mission, which the Cabinet approved in January 2025 with an expenditure of Rs 16,300 crore and an expected Rs 18,000 crore of investment by public sector companies and others. The mission covers exploration, mining, beneficiation, processing and recovery from end-of-life products. On 3 September 2025 the Cabinet added a Rs 1,500 crore recycling incentive, which the IEA’s policy database says is meant to develop 270 kt a year of recycling capacity and about 40 kt a year of critical mineral production from e-waste and used lithium-ion batteries.

The PIB backgrounder says 64 critical and strategic mineral blocks and 11 exploration licence blocks have been auctioned so far. Business Standard reports that the Mines Secretary, Keshav Chandra, has said the government is working on processing parks in Gujarat, Maharashtra, Odisha and Andhra Pradesh, with Maharashtra’s meant for lithium and Odisha’s for nickel and the other two for rare earths. These parks are a separate programme from the capex scheme. India’s rare earth magnet plants have their own scheme, covered in India’s rare earth magnet scheme and its 20 bids.

The ore side and the battery side

The scheme starts from ore and concentrate, so the supply of ore is the first question. In a Lok Sabha reply the Mines Minister said the Geological Survey of India had confirmed an inferred resource of 5.9 million tonnes of lithium ore at Salal-Haimna in Reasi district, Jammu and Kashmir. “Inferred (G3)” is the preliminary stage of exploration. The reply added that India can develop technology to turn lithium ore into a mineral concentrate and that extraction from the concentrate had been shown in the laboratory. A separate Rajya Sabha reply said the Atomic Minerals Directorate had established 1,600 tonnes at the same preliminary stage in Marlagalla, Mandya district, Karnataka.

The battery side is the demand that would take the output. India’s electric vehicle market is laid out in India’s electric vehicle numbers, and the latest monthly sales are in the record September 2026 electric vehicle sales. The Cabinet approved a second scheme on the same day, a Rs 14,500 crore viability gap funding scheme for 92 GWh of grid-scale energy storage, which carries a 40 per cent minimum domestic content requirement for battery storage projects.

What comes next

As of 5 November 2026, none of the releases opened for this article names a company or a site, and the technical and financial bidding rounds are still ahead. The three-year commissioning window starts at the Letter of Award, so the first processing capacity under the scheme will come after the awards are made. Cobalt is described in the Cabinet release as a by-product of nickel production, and the scheme sets no separate cobalt target.