India will spend Rs 2,814 crore to build domestic plants that process lithium and nickel, the two minerals at the centre of its battery plans. The Union Cabinet approved the Capex Support Scheme to Promote Critical Mineral Processing on 4 November 2026, and the scheme will run from 2026-27 to 2030-31. It fills the gap between mining and battery making, the stage of the battery chain where India now depends almost entirely on imports.
The scheme will pay a capital subsidy of 30 percent of eligible investment for four plants: two to process lithium, each with a minimum capacity of 30 kilotonnes, and two to process nickel, each with a minimum capacity of 50 kilotonnes. Support is capped at Rs 500 crore for each lithium plant and Rs 900 crore for each nickel plant. Cobalt is expected to be recovered as a by-product of nickel processing.
The plants will turn lithium and nickel ores and intermediate products into high-purity compounds, the form battery makers need. Lithium, nickel and cobalt go into electric vehicle batteries, grid storage batteries, electronics, defence equipment and speciality steel. India imports most of what it uses, and the Ministry of Mines told the Lok Sabha in July that the country is largely import dependent for lithium, cobalt, nickel and potash.
The scheme is the third step in a sequence. In 2023 the government amended the Mines and Minerals (Development and Regulation) Act to designate 30 critical minerals and open them to exploration and auction. The production linked incentive scheme for advanced chemistry cells, cleared in 2021, pushed manufacturers to build cell plants. The new scheme funds the processing stage that sits between the two, the part of the battery chain that had no dedicated support until now.
Why the battery chain needs processing plants
A country can buy ore from many places and still depend on one refining hub for battery-grade chemicals. Processing capacity is the missing link in the battery chain, between securing mineral resources and making batteries at home, and it is the stage where global control is most concentrated. The Cabinet note said processing stays concentrated in a few places, which leaves supply open to geopolitical disruption, price swings and supply restrictions.
Demand across the battery chain is set to rise fast. A ministry presentation from January put lithium demand growth at six to eight times by 2030, cobalt at three to five times, and nickel, graphite and rare earths at one and a half to two times. The scheme is meant to give Indian battery makers a domestic source for the refined material they now buy abroad, closing a gap in the battery chain.
Battery chain funding and the wider storage push
The same Cabinet meeting approved a second scheme that creates demand for the processed minerals. A viability gap funding scheme worth Rs 17,500 crore will support 92 gigawatt-hours of grid-scale storage, including 30 gigawatt-hours of battery storage, 60 of pumped hydro and 2 of emerging technologies. The government expects the storage scheme to draw about Rs 97,600 crore in investment, with Rs 14,500 crore of that as viability gap support.
Battery projects under the storage scheme must meet a 40 percent minimum domestic content rule, which means the cells they use will need Indian-made parts. The two schemes were cleared on the same day, and the link between them is direct: the storage programme creates buyers for batteries, and the processing scheme creates suppliers for the minerals inside them.
The processing scheme sits inside a wider policy frame for the battery chain. The National Critical Mineral Mission, approved in January 2025 with an outlay of Rs 34,300 crore over seven years, covers exploration, overseas acquisition of assets, stockpiling, mineral processing parks and recycling. In September 2025 the Cabinet approved a Rs 1,500 crore incentive scheme for recycling critical minerals from e-waste, battery scrap and end-of-life vehicles.
The money will be paid in three tranches tied to milestones, and companies will win support through reverse bidding, offering to take less public money to secure a plant. That design means the government does not pay in advance for plants that are never finished. The Ministry of Mines will run the scheme, which covers the five financial years from 2026-27 to 2030-31.
The country aims for 411 gigawatt-hours of storage by 2031-32, against about 54 gigawatt-hours of grid-scale storage today, and the battery chain will have to grow with it. The four processing plants are a small part of that build, but they are the part the battery chain has lacked until now.