Cabinet Approves ₹2,814 Crore Capex Scheme for Lithium and Nickel Processing: What Founders Should Know

The Union Cabinet has approved a new Capex Support Scheme to Promote Critical Mineral Processing, with an outlay of ₹2,814 crore over five years. The decision was announced on 4 November. The scheme is about building processing plants for lithium and nickel inside India, and it works as a capital subsidy on the cost of those plants.

This is not a startup grant. It is an industrial scheme for a small number of large plants. But it sits at the start of the battery and clean-energy supply chain, so it matters if you build anything downstream. Here is what the government has actually said.

What the scheme offers

The numbers below come from the official release by the Press Information Bureau (PIB) and are matched by the agency reports we reviewed.

• Total outlay: ₹2,814 crore over five years.
• Scheme period: FY 2026-27 to 2030-31.
• Subsidy: a capital subsidy of 30% of eligible investment.
• Number of plants: four critical mineral processing plants in total, being two lithium processing plants and two nickel processing plants.
• Minimum size: at least 30 kt of capacity for each lithium plant, and at least 50 kt for each nickel plant.
• Cap on support: up to ₹500 crore per lithium beneficiary and up to ₹900 crore per nickel beneficiary.
• Payment: the incentive is paid in three tranches, linked to milestones.

The scheme targets turning lithium and nickel ores or intermediate products into high-purity compounds. Cobalt is expected to be recovered as a by-product of nickel production, according to the PIB release.

How beneficiaries will be chosen

Selection is a two-stage process:

• Stage one: applications are assessed for technical qualification. Only technically qualified applicants move on.
• Stage two: financial bidding. For each mineral, two beneficiaries are picked on a least-cost basis, which means the bidders who ask for the lowest capex support.

So the 30% subsidy and the caps are the upper limits. What a winning bidder actually receives depends on how low it bids.

Why the government is doing this

The official reasoning is that processing of critical minerals is concentrated in a few places around the world. That exposes supply chains to geopolitical disruption, price swings and supply restrictions. The release says India depends heavily on imports for refined intermediates and high-purity materials, because its own processing infrastructure is at an early stage.

It names three obstacles for commercial-scale projects: high capital requirements, limited availability of suitable technology, and constrained access to raw materials. The scheme is aimed at the first of these, the capital cost.

The government says domestic processing will support electric mobility, Battery Energy Storage Systems (BESS), electronics, defence and speciality steel. Union Minister Ashwini Vaishnaw, speaking to reporters after the Cabinet meeting, said the National Critical Mineral Mission is progressing in an orderly way and that the Cabinet had also approved this processing scheme, as reported by ThePrint Hindi.

Who could benefit

Reading the scheme as written:

• Processing-plant developers. The subsidy is for those who set up the four plants. These are large capital projects, and the minimum capacities show that.
• Suppliers to those plants. Four plants being built will need equipment, engineering, technology and services. The sources do not name any supplier programme, so this is our reading and not an announced benefit.
• Battery and cleantech startups downstream. If you make batteries, storage systems or electric mobility products, a domestic source of high-purity lithium and nickel compounds could matter to you over time. Nothing in the sources promises prices, supply or preferential access.

The sources do not say that startups can apply to this scheme, and we are not suggesting they can. The only stated beneficiaries are the four plants.

What has not been announced

Several things you would need before acting are missing from the sources we reviewed:

• Application window and deadlines. No dates have been announced.
• Portal or submission process. None has been named.
• Detailed eligibility. The technical and financial criteria for qualifying in stage one are not described.
• Tranche details. The sources do not give the size of each tranche or define the milestones.
• Beneficiaries and locations. No company, site or state has been named.
• Meaning of "eligible investment". What costs count toward the 30% has not been spelled out.
• Cobalt. The PIB release says cobalt is expected as a by-product of nickel production. ThePrint Hindi's report says it is not stated whether cobalt is covered by the scheme. Treat cobalt as unclear until the scheme guidelines are out.
• Implementing details. The PIB release is filed under the Ministry of Mines. ThePrint Hindi's report says the implementing ministry is not stated. Guidelines on how the scheme will be run have not been published in the material we reviewed.

What this means for you

If you are building a lithium or nickel processing plant, or you are part of a consortium planning one, watch for the official scheme guidelines. The capacity minimums, the caps and the two-stage selection are the points to check your plan against first.

If you are a startup that supplies equipment, technology or services to process industries, this is a signal that demand is coming. It is too early to plan around, because no timelines or locations are public.

If you make batteries, energy storage or electric mobility products, treat this as a long-term supply story and not a funding opportunity. Nothing here gives you money or a way to apply.

Do not pay anyone who offers to help you "apply" before an application process has been announced. We will update this page when the Ministry publishes guidelines or opens an application window.

Sources: Press Information Bureau (Ministry of Mines release); The Tribune (ANI); ThePrint Hindi (Bhasha).

Cover photo: Homa Appliances on Unsplash