In a major step to strengthen India’s electric vehicle (EV) supply chain, the Government of India is preparing to announce big financial incentives for lithium and nickel processing plants. These two minerals are critical raw materials for EV battery manufacturing, and the move is expected to significantly boost domestic battery production.
According to government sources, the new scheme will offer 15% capital subsidy to companies setting up lithium and nickel processing facilities in India. The incentive programme is likely to begin from April 1, 2026.
This initiative is part of India’s broader strategy to reduce dependence on imports, lower EV battery costs, and strengthen the clean energy ecosystem
Key Highlights of the Incentive Scheme
15% capital subsidy on investment in lithium and nickel processing plants
Incentives available for 5 years
Cap on subsidy:
Lithium plants – up to 40% of annual net sales turnover
Nickel plants – up to 25% of annual net sales turnover
Minimum capacity requirements:
Lithium processing – 30,000 tonnes
Nickel processing – 50,000 tonnes
Initial focus on 2 lithium and 2 nickel projects
Target: Meet India’s domestic demand by 2030
Why Lithium & Nickel Are Critical for EV Growth
Lithium and nickel are core components of lithium-ion batteries, which power electric vehicles. Currently, India depends heavily on imports, especially from China, for battery-grade lithium and processed nickel.
By promoting domestic processing:
India can secure raw material supply
Reduce battery production costs
Improve energy security
Strengthen Make in India & Atmanirbhar Bharat mission
Boost to Domestic Battery Manufacturing
India aims to become a global EV manufacturing hub, and battery production is a key pillar of this ambition.
This subsidy scheme will:
Encourage private investment
Attract global battery manufacturers
Promote advanced cell manufacturing plants
Generate high-skilled employment
It will also support the government’s existing PLI (Production Linked Incentive) schemes for advanced battery manufacturing.
The government’s plan to offer 15% capital subsidy for lithium and nickel processing plants marks a turning point for India’s EV industry. It will:
Lower EV battery costs
Boost local manufacturing
Strengthen supply chain resilience
Accelerate India’s clean mobility transition
This move positions India strongly in the global electric mobility race.