India Approves ₹2,814 Crore Incentive Scheme to Boost Domestic Lithium and Nickel Processing

India's Cabinet has approved an incentive programme worth ₹28.14 billion ($297 million) to strengthen domestic processing of lithium and nickel, according to a government statement issued on Wednesday. The initiative is aimed at reducing the country's dependence on overseas supply chains, particularly those dominated by China.

India relies heavily on imports for several critical minerals, including lithium. In March, the government had warned that tighter conditions following China's export controls could expose the country to supply-chain risks.

The newly approved programme will support the processing of lithium and nickel ores, along with intermediate products, into high-purity compounds. The move is intended to expand India's domestic processing capabilities and strengthen its position in the critical minerals sector.

The government has identified electric mobility, battery energy storage systems, electronics, defence and speciality steel as key sectors expected to benefit from the initiative. These industries depend on a reliable supply of critical minerals for manufacturing and technology development.

"Processing of critical minerals remains geographically concentrated in a few global locations. This exposes supply chains to geopolitical disruptions, price volatility, and potential supply restrictions," the government statement said.

It further noted that such concentration has implications for India's national security and economic sovereignty. Expanding domestic processing capacity is therefore seen as an important step towards reducing external vulnerabilities.

The programme is expected to encourage investment in domestic processing infrastructure, strengthen the country's critical minerals ecosystem and support its broader push towards self-reliance. By developing capabilities to process lithium and nickel within India, the government aims to build a more resilient supply chain for industries that are central to the country's manufacturing and energy transition goals.