India is contemplating offering incentives to encourage private companies to establish lithium processing facilities, as part of efforts to develop its budding lithium mining sector and enhance supplies of the EV battery metal, according to three government sources.
Under a new critical minerals policy being developed by the mines ministry, the government would provide incentives to companies to set up lithium processing plants, the sources stated.
“The critical minerals policy will be comprehensive and will cover all aspects from exploration to mining to value addition,” one source explained. “It will also cover incentives for beneficiation and refining within the country.”
While the exact nature of the incentives is yet to be determined, the government aims to draw inspiration from countries like Australia and Canada, the sources noted.
In response to queries from Reuters, the Ministry of Mines stated that the government was taking various measures to ensure the availability of critical minerals for the downstream industry, without providing further details.
According to Karthik Bansal, a research analyst at the New Delhi-based Centre for Social and Economic Progress, the government could offer subsidies and tax benefits to encourage investment in lithium processing.
India, the world’s third-largest carbon emitter, identified 30 minerals, including lithium, as “critical” last year to support its ambition for cleaner technologies in sectors such as electronics, telecommunications, transport, and defense.
Despite discovering its first lithium reserves only last year, India is keen on establishing facilities for local lithium processing. Companies such as SoftBank-backed e-scooter maker Ola Electric, miner Vedanta Ltd, and Jindal Power are among those competing for critical minerals blocks, including lithium, with a shortlist expected by July.
