India’s Ministry of Mines is set to roll out a new incentive-backed policy with an outlay of around Rs 3,000 crore ($313.48 million) aimed at strengthening domestic processing of critical minerals such as lithium and nickel, according to people familiar with the development.
The proposed framework is expected to be formally announced shortly and is designed to reduce India’s dependence on imported battery materials while accelerating the country’s electric mobility transition. The Mines Ministry has not yet issued an official comment on the matter.
The policy marks a significant step in India’s broader strategy to build a secure and self-reliant EV ecosystem, particularly as global competition intensifies over access to critical minerals essential for clean energy technologies.
Lithium and nickel are key raw materials used in the production of lithium-ion batteries, which power electric vehicles, energy storage systems, and portable electronics. India currently relies heavily on imports for both minerals, making the supply chain vulnerable to global price volatility and geopolitical disruptions.
Under the proposed policy, incentives will be provided to companies setting up large-scale processing facilities in India. According to sources, lithium processing plants will need a minimum capacity of 30,000 metric tonnes to qualify, while nickel processing units must have at least 50,000 tonnes capacity.
The scale requirement signals the government’s intent to attract serious industrial investment rather than fragmented or small-scale processing units, ensuring economies of scale and global competitiveness.
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The timing of the policy aligns with India’s aggressive electric mobility targets. The government aims to achieve 30% electric car penetration and 80% electrification of two-wheelers by 2030, up from current levels of around 6% and 9% respectively.
This transition is expected to significantly increase demand for battery materials, particularly lithium and nickel, making domestic processing capability a strategic necessity rather than just an industrial policy choice.
Officials had earlier indicated that the government had shortlisted key critical minerals linked to the EV value chain, though details had not been disclosed publicly.
By prioritizing domestic processing, India aims to move beyond raw material dependence and strengthen its position in the global clean energy supply chain.
At present, India imports most of its lithium and nickel requirements from countries such as Australia, Indonesia, and Chile. However, global supply chains for these minerals remain highly concentrated, with a few countries dominating extraction and refining capacity.
This concentration has led to price fluctuations and supply bottlenecks in recent years, particularly as global demand for electric vehicles has surged.
The new policy is expected to address these risks by encouraging local value addition, ensuring more stable input costs for battery manufacturers and EV producers in India.
Industry stakeholders believe that domestic processing capacity could also attract downstream investments in battery manufacturing, recycling, and energy storage systems, creating a more integrated EV ecosystem.
The incentive structure is likely to be part of India’s broader critical minerals strategy, which focuses on securing supply chains for energy transition technologies such as EVs, solar panels, and grid storage.
The government has already taken steps in recent years to identify and secure overseas mineral assets, while simultaneously promoting domestic exploration and processing capabilities.
The Rs 3,000 crore allocation signals a more focused push toward mid- and downstream processing, where value addition and job creation are significantly higher compared to raw mineral imports.
For global and domestic companies, the policy could open up new opportunities in mineral refining, battery-grade material production, and integrated EV supply chains. However, the high entry thresholds may also limit participation to large players with strong capital backing and technical expertise.
Experts suggest that the move could position India as a regional hub for battery material processing, especially as Southeast Asia and Africa emerge as key sourcing regions for raw minerals.
India’s planned Rs 3,000 crore incentive policy for lithium and nickel processing marks a strategic step toward securing the country’s electric mobility future. By building domestic refining capacity, the government aims to reduce import dependence, stabilize supply chains, and strengthen its position in the global EV ecosystem.
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