Pariksha SaathiCabinet approves Rs 2,814 crore Capex Support Scheme to promote critical mineral processing, covering lithium and nickel
The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the 'Capex Support Scheme to Promote Critical Mineral Processing' with a financial outlay of Rs 2,814 crore over five years, from FY 2026-27 to 2030-31, the Government said on 4 November 2026. According to the release, processing of critical minerals remains geographically concentrated in a few global locations, exposing supply chains to geopolitical disruptions, price volatility and potential supply restrictions, and India remains substantially dependent on imports for refined intermediates and high-purity materials because domestic beneficiation and processing infrastructure for critical minerals, including lithium, nickel and cobalt, is at a nascent stage. The scheme targets the processing of lithium and nickel ores/intermediary products into high-purity compounds; cobalt is also expected to be recovered as a by-product of nickel production. It will provide a capital subsidy of 30% of eligible investment for setting up four critical mineral processing plants - two lithium processing plants with a minimum capacity of 30 kt each and two nickel processing plants with a minimum capacity of 50 kt each - with maximum capital support capped at Rs 500 crore per lithium beneficiary and Rs 900 crore per nickel beneficiary. Beneficiaries will be selected in two stages: applications will first be assessed for technical qualification, and only technically qualified applicants will take part in financial bidding, with two beneficiaries per mineral chosen on the least-cost criterion, i.e. the lowest capex support sought. Incentives will be disbursed in three tranches linked to specified milestones. The Government said the scheme will support sectors such as electric mobility, battery energy storage systems, electronics, defence and speciality steel, and advance the objectives of Atmanirbhar Bharat.
Drafted with AI assistance from the official PIB release linked above and checked against it by a second AI pass. Not line-edited by a human.
Learning context
On 3 September 2025 the Union Cabinet approved a Rs 1,500 crore Incentive Scheme to develop recycling capacity in the country for the separation and production of critical minerals from secondary sources, as part of the National Critical Mineral Mission (NCMM). The scheme has a tenure of six years, from FY 2025-26 to FY 2030-31. Eligible feedstock is e-waste, lithium-ion battery (LIB) scrap and other scrap such as catalytic converters in end-of-life vehicles; one-third of the scheme outlay is earmarked for small, new recyclers, including start-ups; and the incentive goes to the recycling value chain involved in actual extraction of critical minerals, not to the value chain involved only in black mass production. Incentives comprise a 20% capex subsidy on plant and machinery, equipment and associated utilities for starting production within a specified timeframe (a reduced subsidy applies after it) and an opex subsidy on incremental sales, with the total incentive per entity capped at Rs 50 crore for large entities and Rs 25 crore for small entities. The scheme was expected to develop at least 270 kilo ton of annual recycling capacity, resulting in around 40 kilo ton of annual critical mineral production, and to bring in about Rs 8,000 crore of investment and close to 70,000 direct and indirect jobs.
Check yourself: what is the outlay of the critical mineral recycling incentive scheme approved on 3 September 2025, which mission is it part of, and what capex subsidy does it offer?
Rs 1,500 crore; the National Critical Mineral Mission (NCMM); 20% on plant and machinery, equipment and associated utilities.
Revision task: from this release, note the scheme's outlay and period, why domestic processing capacity is needed, the two minerals targeted and the expected by-product, the capital subsidy, the number and minimum capacity of the plants, the caps per beneficiary, the selection process and the number of tranches; from the note, the outlay, tenure, mission, feedstock, capex subsidy and expected outcomes of the 2025 recycling scheme. Compare the capex subsidy rates of the two schemes.
Test yourself
The Union Cabinet has approved a Rs 2,814 crore 'Capex Support Scheme to Promote Critical Mineral Processing' (announced on 4 November 2026). The scheme targets the processing of the ores/intermediary products of which two minerals into high-purity compounds?
Show the answer
Answer: Lithium and nickel
The scheme targets the processing of lithium and nickel ores/intermediary products into high-purity compounds; cobalt is also expected to be recovered as a by-product of nickel production. It will provide a capital subsidy of 30% of eligible investment for two lithium processing plants (minimum 30 kt each) and two nickel processing plants (minimum 50 kt each), capped at Rs 500 crore per lithium beneficiary and Rs 900 crore per nickel beneficiary.
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