India is preparing to offer incentives to companies to set up lithium and nickel processing plants, aiming to boost domestic output of critical minerals needed for its energy transition and growing electric vehicle market, according to two sources and a government presentation reviewed by Reuters.
The proposed scheme, led by the Ministry of Mines, would provide a 15% capital subsidy for eligible investments in lithium and nickel processing projects starting on or after April 1, 2026, subject to caps and performance conditions, the presentation showed. One source familiar with the matter described the proposed subsidy level as “realistic.”
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India is seeking to accelerate the shift to clean energy technologies, including electric vehicles, but currently lacks large-scale processing capacity for critical minerals, an area dominated globally by China. Lithium and nickel are key inputs for EV batteries, and securing domestic processing capability is seen as critical to supply-chain resilience.
Under the plan, incentives would be available for five years and capped at 40% of annual net sales turnover for lithium processing plants and 25% for nickel processing plants. To qualify, lithium projects would need a minimum annual capacity of 30,000 metric tons, while nickel plants would require at least 50,000 tons, according to the presentation.
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The subsidies would be disbursed in stages and linked to minimum plant utilisation targets set by the government. Initially, New Delhi plans to support two lithium and two nickel processing projects, with the aim of meeting domestic demand by 2030, the sources said.
India has set ambitious electrification goals, targeting 30% electric car penetration and 80% for two-wheelers by 2030, up from about 4% and 6% respectively at present. Expanding domestic processing of battery materials is expected to play a key role in achieving those targets.
In 2023, India classified more than 20 minerals, including lithium, as “critical” to its energy transition and industrial growth strategy. The Ministry of Mines did not respond to a Reuters request for comment on the proposed incentive scheme.
