Centre readies incentive scheme to boost domestic lithium and nickel processing
By Staff Report October 7, 2026 12:03 pm IST
Mines Ministry plans a new support scheme for value-added processing as India seeks to strengthen its critical mineral supply chain and reduce dependence on imported processed materials.
The Centre is preparing a new incentive scheme to promote domestic processing of lithium and nickel, Mines Secretary Keshav Chandra said. The proposed scheme is aimed at increasing value addition and strengthening India’s critical mineral supply chain.
Chandra said the scheme would be launched soon and would address a gap in the existing support framework. The Ministry of Mines already has a ₹1,500 crore scheme for critical mineral recycling, but there is no similar incentive for processing freshly mined ore into value-added and battery-grade materials.
The proposed support is expected to focus on lithium and nickel, which are increasingly important for batteries, electric vehicles, energy storage and other industrial applications. The government is also working to develop dedicated processing ecosystems for critical minerals.
Four states have been identified for critical mineral processing parks. Gujarat, Maharashtra, Odisha and Andhra Pradesh are expected to develop processing ecosystems focused on different mineral groups.
Maharashtra has been identified for lithium processing, while Odisha has been selected for nickel. Gujarat will focus on rare-earth permanent magnets, while Andhra Pradesh will cover rare earth elements, titanium and zirconium.
Chandra also highlighted the technology challenges facing India’s critical mineral processing sector. He said advanced processing technologies were not readily available from countries that had signed agreements with India, while some commercially available technologies were expensive.
The Mines Ministry is therefore looking to strengthen partnerships between industry and academia and develop indigenous processing technologies through centres of excellence.
The government is also reviewing the progress of auctioned mining blocks. Chandra said some blocks had received necessary clearances and had leases signed but had not yet started operations. Their progress was being reviewed on a monthly basis.
Chandra also stressed the need for greater domestic beneficiation of minerals. India currently exports some minerals and later imports processed materials, making it important to build domestic processing capacity and retain greater value within the country.
The proposed lithium and nickel processing scheme forms part of India’s wider efforts to strengthen domestic capabilities in critical minerals and reduce dependence on overseas processing.
Source: Money Control
