India to Roll Out Incentives to Spur Investment in Lithium and Nickel Processing

India’s government is preparing to introduce a new set of financial incentives to attract companies to establish lithium and nickel processing plants in the country, according to people familiar with the plan and a government presentation reviewed by Reuters. The move is aimed at boosting domestic capacity for critical minerals that are essential for battery production and other clean energy technologies, which India currently lacks and often imports.

Under the proposal, a 15 % capital subsidy would be offered for qualifying processing projects that start operations on or after April 1, 2026. The support would be available for about five years and would be capped as a share of annual sales - up to 40 % for lithium plants and 25 % for nickel plants - to ensure incentives are tied to meaningful production.

To qualify for these incentives, processing facilities must meet minimum capacity requirements: at least 30,000 metric tons annual capacity for lithium and 50,000 metric tons for nickel. Subsidy payments would be phased and linked to utilisation targets set by the government to encourage efficient use of the plants, rather than simply building capacity.

Initially, the incentive scheme is expected to support two lithium and two nickel projects as part of India’s efforts to meet growing demand by 2030, particularly in the electric vehicle sector where nickel and lithium are critical for batteries. The broader goal is to help India reduce reliance on imports and accelerate its clean energy transition.

Lithium-nickel processing incentives are a strategic response to critical-minerals dependence, and they open supply-chain positioning opportunities for EV manufacturers, battery integrators and financial institutions with clean-energy exposure. Our supply-chain-and-operations and energy-transition teams help clients evaluate where this domestic processing base changes offtake and Scope 3 disclosure calculations.