Union Cabinet to weigh Rs 2,800-crore capex scheme for lithium, nickel processing as India seeks to cut China's 90% grip on critical minerals

The Union Cabinet is expected to discuss a significant Rs 2,800-crore capital expenditure scheme aimed at enhancing India's domestic processing capabilities for critical minerals, particularly lithium and nickel. This initiative is part of a broader strategy to reduce India's dependence on China, which currently controls 90% of global critical mineral processing.¹²⁵⁶

The proposed scheme will offer a 30% capital subsidy for investments in establishing processing plants, with a focus on developing high-purity compounds from lithium and nickel ores. It aims to set up two lithium processing plants with a minimum capacity of 30 kilotonnes each and two nickel processing plants with a minimum capacity of 50 kilotonnes each. The maximum capital support is capped at Rs 500 crore per lithium beneficiary and Rs 900 crore per nickel beneficiary.

The initiative is expected to bolster sectors such as electric mobility, battery energy storage systems, electronics, and defence, while also strengthening India's critical mineral value chain. The government has identified Andhra Pradesh, Odisha, Gujarat, and Maharashtra as potential locations for critical mineral processing parks, with specific focuses on rare earth processing and nickel and lithium production.

Currently, India is heavily reliant on imports for essential minerals like cobalt, lithium, and nickel. The government is also working on a policy for stockpiling critical minerals to mitigate potential supply disruptions, committing Rs 500 crore for the development of a National Critical Mineral Stockpile Programme from 2024-25 to 2030-31.