India plans to soon offer incentives for companies to set up lithium and nickel processing plants to help boost output and meet rising demand for critical minerals, according to two sources and a government presentation reviewed by Reuters.
India is seeking to accelerate its energy transition and cut emissions by promoting clean energy initiatives like electric vehicles, though it lacks the technology to process critical minerals, a capacity that is largely dominated by China.
Nickel and lithium are critical to India’s EV supply chain, especially when it comes to batteries, as New Delhi targets 30% electric car penetration and 80% for two-wheelers by 2030 from 4% and 6% at present.
The incentive plan proposes a 15% capital subsidy for eligible investments in lithium and nickel-processing projects starting on or after April 1, 2026, which would be subject to a cap, according to the presentation.
A 15% capital subsidy appears to be “realistic,” one of the sources said.
India’s Ministry of Mines, which is responsible for the proposal, did not respond to a Reuters email seeking comments.
Under the program, incentives would be available for five years and capped at 40% of annual net sales turnover for lithium processing plants and 25% for nickel plants, the presentation showed.
To qualify for the incentives, lithium processing plants must have a minimum capacity of 30,000 metric tons, while nickel plants must have at least 50,000 tons, it showed.
The subsidy would be disbursed in stages, subject to minimum plant utilization targets set by the government, the presentation showed.
The government initially plans to roll out the incentives for two lithium and two nickel projects to meet the country’s demand by 2030, one of the sources and the presentation said.
In 2023, India identified more than 20 minerals – including lithium – as “critical” for its energy transition efforts and to meet rising demand from businesses.
Reuters previously reported that India approached several countries to seek technical collaborations on lithium processing.
(By Neha Arora; Editing by Mayank Bhardwaj and Thomas Derpinghaus)
