India's Cabinet has approved a Rs 2,814 crore scheme to fund domestic lithium and nickel processing over five years. The government will pay a 30% capital subsidy for four plants, two for each metal, to reduce reliance on imports.
At a glance
- Each lithium plant can receive up to Rs 500 crore, and each nickel plant up to Rs 900 crore.
- Winners will be chosen by bidding, with preference for qualified applicants asking for the least capital support.
- The Cabinet also cleared a Rs 14,500 crore scheme to support 92 GWh of grid-scale energy storage.
Background
Processing turns mined ore and intermediate products into the high-purity chemicals that battery makers use. India's government says this step is concentrated in a few countries, which exposes supply chains to disruption and price swings. It said in March that India depends heavily on imported critical minerals such as lithium, and that China's export controls add to the risk.
What happened
India's Union Cabinet on Wednesday approved a Rs 2,814 crore ($297 million) capital expenditure support scheme for lithium and nickel processing, Information Minister Ashwini Vaishnaw said. The scheme will run for five years, from 2026-27 to 2030-31.
The government will pay 30% of the investment needed for four plants, two for lithium and two for nickel, The Hindu reported. Each lithium plant needs a minimum capacity of 30,000 tonnes and each nickel plant 50,000 tonnes.
Support is capped at Rs 500 crore per lithium project and Rs 900 crore per nickel project. Beneficiaries will be chosen through least-cost bidding, and the money will be paid in three tranches.
Why India is paying for processing
The government said domestic processing is limited by high capital costs, poor access to technology and a shortage of raw materials. It added that processing is concentrated in a few global locations, which exposes supply chains to geopolitical disruption, price volatility and supply restrictions.
Mines Minister G. Kishan Reddy said the scheme would strengthen domestic capability and reduce import dependence. The government listed electric mobility, battery storage, electronics, defence and speciality steel among the industries that would benefit.
What it means for industry
The Cabinet also approved a Rs 14,500 crore viability gap funding scheme for 92 GWh of grid-scale storage, including 30 GWh of battery storage. Battery projects under that scheme must use at least 40% domestic content, CNBC TV18 reported.
The Federation of Indian Mineral Industries (FIMI) welcomed the processing scheme. But it said a reliable supply of raw material, from domestic mines and overseas, will be just as important for the plants to succeed.
Our read
Outlook: bullish. New Indian processing plants would add demand for lithium and nickel feed, but they are years away.
What to watch
- The bidding process to choose the four beneficiaries.
- Where the plants will source lithium and nickel feed, a concern raised by FIMI.
- India's talks to acquire lithium blocks overseas, including in Australia, Chile and Argentina.
For information only, not investment advice.
Lithium price in India
metalscost.com India reference price as of 2026-11-07.
Detailed analysis
Timeline
- 2026-11-04: India's Cabinet approves the Rs 2,814 crore critical mineral processing scheme.
Government Policies
India will pay a 30% capital subsidy for four lithium and nickel processing plants over five years.
Refinery Output
The plants would turn ores and intermediates into high-purity compounds for batteries and other industries.
What could lift prices
- Four new plants would need steady supplies of lithium and nickel feed.
- The 92 GWh storage scheme supports battery demand in India.
What could weigh on prices
- The plants are years away and add no demand now.
- The subsidy covers only four plants, so the extra demand is modest.
Country impact
| Country | Impact | Reason |
|---|---|---|
| India | High | The scheme aims to build domestic lithium and nickel processing and cut imports. |
| China | Medium | India's government cited China's export controls as a supply-chain risk. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Battery Manufacturing | Positive | Domestic processing would supply high-purity lithium and nickel compounds. |
| Energy Storage | Positive | A separate scheme supports 92 GWh of grid-scale storage. |
Who gains, who loses
- Indian processing investors: They can receive 30% of plant costs, up to Rs 900 crore for a nickel project.
- Overseas suppliers of processed lithium and nickel: India aims to replace some imports with domestic output.
Other ways this could play out
- If bidding draws strong interest, construction could start within the scheme's five years.
- If companies cannot secure feed, the plants could be delayed, as FIMI warns.
Price risks
- Raw material shortages could leave new plants underused.
- High capital costs and limited technology access have held back processing before.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
India
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