For Prelims: Critical Minerals, Capital Expenditure (CAPEX) Subsidy, National Critical Mineral Mission (NCMM), Least-Cost Criterion, Full form, Nodal Ministry, Scheme Outlay, Duration
For Mains: Atmanirbhar Bharat, critical mineral security, value chain resilience, energy transition, import substitution
Source:
PIB
5 facts for one-day exams
SSC, railway, police and teaching exams ask direct questions like these.
- The CAPEX Support Scheme to Promote Critical Mineral Processing was approved by the Union Cabinet on 4 November 2026.
- The scheme has a total outlay of ₹2,814 crore for FY 2026-27 to FY 2030-31.
- It offers a 30% capital subsidy for setting up two Lithium and two Nickel processing plants.
- Support is capped at ₹500 crore per Lithium beneficiary and ₹900 crore per Nickel beneficiary.
- The scheme is expected to attract about ₹10,000 crore in investment.
Why in the news?
The Union Cabinet has approved the CAPEX Support Scheme to Promote Critical Mineral Processing with an outlay of ₹2,814 crore for FY 2026-27 to FY 2030-31. It offers a 30% capital subsidy to set up two Lithium and two Nickel processing plants, aiming to reduce import dependence, strengthen supply chain resilience, and support electric mobility, battery storage, and defence manufacturing.
Summary
- The CAPEX Support Scheme to Promote Critical Mineral Processing has been approved by the Union Cabinet on 4 November 2026 with a total outlay of ₹2,814 crore.
- It provides a 30% capital subsidy for setting up two Lithium plants (≥30 kt capacity each) and two Nickel plants (≥50 kt capacity each), with support capped at ₹500 crore per Lithium and ₹900 crore per Nickel beneficiary.
- The scheme is expected to anchor about ₹10,000 crore in investment and create 60 kt of Lithium and 100 kt of Nickel processing capacity by 2030.
- It complements the National Critical Mineral Mission (NCMM) launched in January 2025 and aims to fill the missing link in India's critical mineral value chain.
Highlights
CAPEX Support Scheme for Critical Mineral Processing
A ₹2,814 crore scheme offering 30% capital subsidy to set up two Lithium and two Nickel processing plants in India over five years.
Strategic Importance for Energy Transition
Domestic processing of Lithium and Nickel is vital for electric mobility, battery storage, electronics, defence and speciality steel, reducing import dependence.
Three-Tier Governance Framework
A Governing Council (chaired by Secretary, Ministry of Mines), a Techno-Financial Committee, and a Project Management Agency will oversee implementation.
Background
India has identified 24 critical minerals, including lithium, nickel, cobalt, graphite and rare earth elements. Currently, requirements for refined intermediates and high-purity materials are largely met through imports. Processing is geographically concentrated in a few countries, exposing supply chains to geopolitical disruptions. The National Critical Mineral Mission (NCMM) was launched in January 2025 to secure long-term supply. Under NCMM, a ₹1,500 crore recycling scheme for critical minerals was approved in September 2025. The new CAPEX scheme fills the missing link in processing.
Key Analysis and Impact
The scheme offers a 30% capital subsidy, capped at ₹500 crore per Lithium plant and ₹900 crore per Nickel plant, to offset high upfront costs. It targets 60 kt of Lithium and 100 kt of Nickel processing capacity by 2030, attracting about ₹10,000 crore in investment. Beneficiaries are selected through a two-stage process: technical qualification followed by least-cost financial bidding. Support is released in three milestone-linked tranches. The scheme is expected to reduce import bills, strengthen supply chain resilience, and support downstream manufacturing of batteries and speciality steel.
Way Forward
The scheme runs until FY 2030-31, with beneficiaries required to commission plants within three years of the Letter of Award (max five years). Alongside NCMM and ongoing mineral block auctions (64 critical mineral blocks auctioned so far), it marks a significant step towards Atmanirbhar Bharat in critical minerals. The three-tier governance framework will ensure effective monitoring and execution.
Background GK
Textbook concepts you need to understand this news
- Critical Minerals
- Minerals essential for economic development and national security, vital for clean energy technologies, high-tech electronics, transport, telecommunications and defence. India has identified 24 such minerals.
- Capital Expenditure (CAPEX) Subsidy
- A government grant that covers a portion of the capital investment (plant, machinery, equipment) to reduce the upfront cost of setting up a project.
- National Critical Mineral Mission (NCMM)
- A Government of India mission launched in January 2025 to secure a long-term supply of critical minerals and strengthen the entire value chain from exploration to recycling.
- Least-Cost Criterion
- A selection method in financial bidding where the applicant seeking the lowest amount of subsidy or support is chosen.
Facts to remember
Tap a card to see the answer. Try to recall it first.
How exams will ask this
- Data: ₹2,814 crore outlay; 30% capital subsidy; 2 Lithium plants (≥30 kt each) + 2 Nickel plants (≥50 kt each); ₹500 cr/Li, ₹900 cr/Ni cap; FY 2026-27 to FY 2030-31; expected investment ~₹10,000 crore
- Nodal Body: Ministry of Mines
Don't make this mistake!
Examiners may swap 'capital subsidy' with 'interest subsidy', '30%' with '40%', or 'Ministry of Mines' with 'Ministry of Commerce and Industry'. They may also confuse the scheme's outlay (₹2,814 crore) with the NCMM recycling scheme outlay (₹1,500 crore).
Write these in mains answers
- Atmanirbhar Bharat, critical mineral security, value chain resilience, energy transition, import substitution
Stuck? Get it in one tap
The government will pay 30% of the cost to companies that set up factories to process Lithium and Nickel inside India. Right now, India sends these minerals abroad for processing and buys them back at a higher price. This scheme aims to change that by making it cheaper to build these factories here. For example, if a company spends ₹1,000 crore on a Lithium plant, the government will give it ₹300 crore as a subsidy.
- The CAPEX Support Scheme to Promote Critical Mineral Processing was approved by the Union Cabinet on 4 November 2026.
- The scheme has a total outlay of ₹2,814 crore for FY 2026-27 to FY 2030-31.
- It offers a 30% capital subsidy for setting up two Lithium and two Nickel processing plants.
- Support is capped at ₹500 crore per Lithium beneficiary and ₹900 crore per Nickel beneficiary.
- The scheme is expected to attract about ₹10,000 crore in investment.
- Economy: Government Schemes and Subsidies
- Science and Technology: Critical Minerals and Energy Transition
Related concepts: Critical Minerals, Capital Expenditure (CAPEX) Subsidy, National Critical Mineral Mission (NCMM), Least-Cost Criterion
Practice questions
Pick an answer, then read the explanation.
- Q1Easy
Which ministry is the nodal agency for the CAPEX Support Scheme to Promote Critical Mineral Processing?
Explanation: The scheme is under the Ministry of Mines, which oversees critical mineral policy. The Ministry of Finance provides budgetary support but is not the nodal ministry. Commerce and Industry handles trade and industrial policy, while Steel deals with steel, not general critical minerals.
- Q2Hard
Consider the following statements regarding the CAPEX Support Scheme to Promote Critical Mineral Processing:
- 1.The scheme provides a 30% capital subsidy for setting up processing plants for Lithium and Nickel.
- 2.The scheme has a total outlay of ₹1,500 crore and runs for three years from FY 2026-27.
- 3.Beneficiaries are selected through a two-stage process involving technical qualification followed by financial bidding based on the least-cost criterion.
Which of the statements given above is/are correct?
Explanation: Statement 1 is correct: the scheme offers a 30% capital subsidy. Statement 2 is incorrect: the outlay is ₹2,814 crore (not ₹1,500 crore) and the duration is five years (not three years). Statement 3 is correct: selection involves a two-stage process with least-cost financial bidding. Hence option C is correct.
- Q3Medium
What is the maximum capital subsidy cap per beneficiary for a Nickel processing plant under the CAPEX Support Scheme?
Explanation: The scheme caps support at ₹900 crore per Nickel beneficiary. ₹500 crore is the cap for Lithium beneficiaries. ₹1,000 crore is the total for Lithium (2 plants), and ₹2,814 crore is the total scheme outlay.
- Q4Medium
What is the primary objective of the CAPEX Support Scheme to Promote Critical Mineral Processing?
Explanation: The scheme aims to fill the missing link in processing to reduce import dependence and strengthen supply chain resilience. Export promotion is not a stated objective. Mining subsidies and strategic stockpiles are addressed by other initiatives like NCMM and mineral block auctions.
Frequently asked questions
1. What is the CAPEX Support Scheme to Promote Critical Mineral Processing?
It is a ₹2,814 crore scheme approved by the Union Cabinet on 4 November 2026, offering a 30% capital subsidy to set up two Lithium and two Nickel processing plants in India.
2. What is the duration of the CAPEX Support Scheme?
The scheme runs for five years, from FY 2026-27 to FY 2030-31.
3. How are beneficiaries selected under this scheme?
Beneficiaries are selected through a two-stage process: first, technical qualification, followed by financial bidding based on the least-cost criterion.
4. Which ministry is responsible for implementing this scheme?
The Ministry of Mines is the nodal ministry for the scheme.
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- Original5 November 2026 · Read story
