The Union Cabinet has approved the CAPEX Support Scheme to Promote Critical Mineral Processing, to be implemented by the Ministry of Mines. The scheme aims to build domestic capacity to process lithium and nickel into high-purity products. India's mineral value chain has a gap here, and the government wants to close it to reduce import dependence and secure supply chains.
The outlay is ₹2,814 crore over five years, from FY 2026-27 to FY 2030-31. The Centre funds it fully: ₹2,800 crore goes to capital subsidy and ₹14 crore to administrative expenses.
The scheme gives a 30% capital subsidy on eligible investment for four plants. Two lithium plants, each of at least 30 kilotonnes (kt), can receive up to ₹500 crore per beneficiary. Two nickel plants, each of at least 50 kt, can receive up to ₹900 crore.
The processing focus is specific. Lithium plants will convert ores and concentrates, not brines, into battery-grade products. Nickel plants will produce Class-1 nickel or battery-grade nickel sulphate, with provision for cobalt recovery.
Beneficiaries will be chosen through a two-stage competitive process. Applicants first have to qualify technically. They then bid financially, and the winner is the one seeking the lowest CAPEX support.
Money is not paid upfront. It is released in three tranches tied to progress:
Plants must be commissioned within three years of the Letter of Award, with an outer limit of five years. A delay beyond three years tapers the undisbursed subsidy progressively.
Oversight runs through three tiers. The Governing Council, chaired by the Secretary, Ministry of Mines, provides strategic guidance, selects beneficiaries, sanctions subsidies and monitors progress. The Techno-Financial Committee evaluates technical and financial proposals and recommends beneficiaries. The Project Management Agency handles administrative and implementation support.
A Ministry of Mines committee identified 30 critical minerals in 2023, and 24 are listed in Part D of the First Schedule of the MMDR Act, 1957. Even so, India remains heavily dependent on imported refined products and high-purity intermediates.
Global processing is concentrated in a few countries. That exposes India to export restrictions, geopolitical disruption and price volatility. Demand is rising from electric mobility, battery storage and advanced manufacturing, and the 2070 net-zero target adds to it. Processing needs advanced equipment, multi-stage conversion technology and strict environmental safeguards, so capital costs are high. Hence, the government argues, the need for targeted support.
The scheme sits alongside the National Critical Mineral Mission (NCMM), launched in January 2025 to cover exploration, mining, processing and recycling. In September 2025 a ₹1,500 crore critical mineral recycling scheme was approved to recover minerals from e-waste and spent lithium-ion batteries. The Centre has also auctioned 64 critical and strategic mineral blocks and 11 Exploration Licence blocks.
The scheme is expected to draw about ₹10,000 crore in investment and create 60 kt of lithium and 100 kt of nickel processing capacity, meant to meet projected demand by 2030. Domestic processing should substitute imports and possibly lower foreign exchange outgo. It should also support battery materials, cells, electric vehicles, energy storage and speciality steel, along with direct and indirect jobs.
Dependence will not vanish entirely. Even with domestic plants, imported ores and concentrates may still be needed, which makes diversified sourcing and overseas mineral partnerships necessary. Success will depend on raw material security, technological capability and environmental sustainability, in service of strategic autonomy and Atmanirbhar Bharat.
With reference to the CAPEX Support Scheme to Promote Critical Mineral Processing, consider the following statements:
Which of the statements given above are correct?
Consider the following information about the plants supported under the CAPEX Support Scheme:
| Plant type | Minimum capacity | Maximum support per beneficiary | |
|---|---|---|---|
| 1. | Lithium plant | 30 kt | ₹500 crore |
| 2. | Nickel plant | 50 kt | ₹900 crore |
| 3. | Lithium plant | 50 kt | ₹900 crore |
In how many of the above rows is the given information correctly matched?
Consider the following statements:
Statement-I: The CAPEX Support Scheme releases the subsidy in three tranches tied to progress rather than paying it upfront.
Statement-II: The final release is made only on commissioning of the plant and contribution of the full minimum equity.
Which one of the following is correct in respect of the above statements?
