Cabinet Clears Rs 2,814 Crore Critical Mineral Capex Scheme

The Union Cabinet, headed by Prime Minister Narendra Modi, cleared the Capex Support Scheme to Promote Critical Mineral Processing on 4 November 2026. The scheme carries an outlay of Rs 2,814 crore and will run for five years, from FY 2026-27 to FY 2030-31. The Ministry of Mines will steer it.

Why the scheme was needed

Refining of critical minerals is today clustered in a handful of countries. That concentration leaves buyers such as India open to geopolitical shocks, swings in price and the risk of supply being cut off, which in turn touches national security, economic sovereignty and the pace at which decarbonisation targets can be met. India still buys most of its refined intermediates and high-purity material abroad, because beneficiation and processing capacity at home is young and small. Steep capital costs, few proven technologies and thin access to feedstock have kept commercial-scale plants from coming up.

What the scheme funds

A capital subsidy worth 30 per cent of eligible investment will go to four processing plants. Two of them will handle lithium, each with a floor capacity of 30 kt, and two will handle nickel, each with a floor capacity of 50 kt. Support is capped at Rs 500 crore for a lithium beneficiary and Rs 900 crore for a nickel beneficiary. Cobalt is expected to be recovered as a by-product when nickel is produced.

How beneficiaries are picked

Selection runs in two stages. Applications are first screened for technical qualification, and only those that clear it move on to financial bidding. For each mineral, the two winners are chosen on the least-cost test, meaning the lowest capital support asked for by a bidder. The incentive is released in three tranches, each tied to a milestone being reached.

Where the output goes

High-purity lithium and nickel compounds feed electric mobility, Battery Energy Storage Systems, electronics, defence and speciality steel. The government reads the approval as a step towards Atmanirbhar Bharat, cutting import reliance and building an end-to-end mineral value chain inside the country.