Union Cabinet Approves ₹2,814 Crore Scheme to Promote Critical Mineral Processing

New Delhi: The Union Cabinet has approved a new capex support scheme aimed at promoting domestic processing of critical minerals to encourage value addition within the country. Announced during a Cabinet briefing in New Delhi by Union Information and Broadcasting Minister Ashwini Vaishnaw, the initiative comes with a total financial outlay of ₹2,814 crore spanning over a period of five years.

According to the official government statement, the newly approved scheme is designed to provide targeted capital expenditure support for establishing and operationalising domestic processing facilities. The primary objectives are to develop domestic processing capabilities, reduce import dependence, and build a robust domestic value chain. The scheme specifically targets the processing of lithium and nickel ores or intermediary products into high-purity compounds, with cobalt expected to be recovered as a by-product of nickel production.

The development holds significant implications for several critical sectors in the Indian economy, including electric mobility, battery energy storage systems (BESS), electronics, defence, and specialty steel.

Under the financial structure of the scheme, a capital subsidy of 30 percent of eligible investment will be provided to set up four critical mineral processing plants. This comprises two lithium processing plants, each with a minimum capacity of 30 kilotonnes (kt), and two nickel processing plants, each with a minimum capacity of 50 kt. The maximum capital support is capped at ₹500 crore per lithium beneficiary and ₹900 crore per nickel beneficiary.

The selection of beneficiaries will follow a two-stage process. In the first phase, applications will undergo technical qualification assessments, after which qualified applicants will advance to the second stage of financial bidding. For each mineral, two beneficiaries will be selected based on the least-cost criterion, representing the lowest capital expenditure support sought by bidders. The allocated incentives will be disbursed across three tranches linked directly to the achievement of specified milestones.

In addition to the critical minerals scheme, the Cabinet gave its nod to the continuation of the Centrally Sponsored Scheme for Fast Track Special Courts (FTSCs) for another five years. Originally introduced in October 2019 following the enactment of the Criminal Law (Amendment) Act, 2018 and a Supreme Court order, these courts are dedicated to the time-bound trial and disposal of pending cases related to rape and crimes under the Protection of Children from Sexual Offences (POCSO) Act, 2012. Minister Ashwini Vaishnaw noted that this decision reflects the government's commitment to handling cases of atrocities against women and children through the full implementation of prevailing laws.

Furthermore, the Union Cabinet approved the Viksit Bharat Initiative for statistical transformation, analytics and research (VISTAR) scheme. Entailing an outlay of ₹4,371.1 crore, the scheme spans five years until the financial year 2030-31. It aims to establish a dynamic, real-time, and future-ready official statistical architecture focusing on enhanced timeliness, data granularity, interoperability with harmonised datasets, and AI-ready databases.

"The government's capex support scheme for critical mineral processing is a timely and strategic move. By incentivizing domestic processing for lithium and nickel, India is taking a foundational step toward securing its supply chain for electric mobility, electronics, and energy storage systems. For startups and businesses operating in advanced manufacturing, clean energy, and battery technologies, targeted capital backing and reduced import dependence will significantly lower entry barriers and foster a stronger domestic value chain." — Dr. Shishir Gupta, Founder & CEO, StartupLanes