India Plans to Announce 15% Capital Subsidy for Lithium and Nickel Processing Plants

As per Reuters report, New Delhi is set to introduce financial incentives aimed at expanding domestic lithium and nickel processing capacity, a move aligned with the country’s clean‑energy goals. 

Incentive Scheme Details 

The programme proposes a 15% capital subsidy for eligible investments in lithium and nickel processing plants that commence on or after April 1, 2026. The subsidy is capped at 40% of annual net sales turnover for lithium facilities and 25% for nickel facilities.  

To qualify, a lithium plant must have a minimum capacity of 30,000 metric tons, while a nickel plant must reach at least 50,000 metric tons. The support will be available for 5 year and will be disbursed in stages, contingent on meeting minimum utilisation targets set by the government. 

Policy Context and Objectives 

The incentive aligns with India’s ambition to accelerate its energy transition and reduce emissions through increased electric‑vehicle adoption. The government targets 30% electric car penetration and 80% electric two‑wheeler penetration by 2030, up from 4% and 6% respectively.  

Lithium and nickel are essential for battery manufacturing, and domestic processing reduces reliance on foreign suppliers, particularly China, which currently dominates the technology. 

Read More: Hindalco to Invest ₹21,000 Crore in Odisha, Expands Aluminium Smelter and Battery Foil Capacity! 

Implementation and Administration 

The Ministry of Mines will oversee the scheme, ensuring that subsidies do not exceed the stipulated caps of 40% for lithium and 25% for nickel turnover. Initial rollout will focus on 2 lithium projects and 2 nickel projects, selected to meet the country’s demand by 2030.  

The subsidy amount will be released only after plants achieve the utilisation thresholds defined in the policy document. 

Conclusion 

The announced 15% capital subsidy provides a structured financial framework to boost lithium and nickel processing in India, supporting the nation’s EV targets and reducing dependence on imported processing capabilities. 

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