The proposed scheme, which is close to securing approvals, will offer production-linked incentives and waive import duties on capital goods needed to establish processing facilities, a senior government official told ET.
“Lithium and nickel processing unit incentive scheme is close to securing all approvals,” the official said, adding that it aligns with broader efforts to expand India’s critical minerals ecosystem.
The scheme could provide production-linked incentives worth about ₹2,000 crore, in addition to duty waivers on capital goods.
“An import duty waiver on capital goods will allow speedier setting up of processing units supported by the scheme,” the official said.
The move builds on the Rs 16,300 crore National Critical Minerals Mission (NCMM), which aims to secure supplies and strengthen the entire value chain, from exploration and mining to beneficiation, processing and recovery from end-of-life products.
India remains entirely dependent on imports for lithium, cobalt and nickel, with no domestic production of these minerals, according to the Institute for Energy Economics and Financial Analysis.China dominates the global lithium supply chain, accounting for more than half of global lithium processing capacity. It also processes about one-third of the world’s nickel supply.
The government is keen to have refining capacity in place by the time domestic mines begin production.
The mines ministry auctioned two blocks containing nickel, platinum and chromium in Bihar and Karnataka in July 2024. The Katghora lithium and rare earth element block in Chhattisgarh was auctioned a month earlier. These minerals are critical for electric vehicles, defence and space applications.
India’s annual demand for lithium-ion batteries is projected to increase fivefold to about 210 GWh by 2030. The National Programme on Advanced Chemistry Cell Battery Storage aims to create 50 GWh of domestic manufacturing capacity.
In addition, at least 10 manufacturers have announced plans to set up a combined 178 GWh of capacity in the country over the next five years, according to an official statement.