India announces Rs 2,814 crore plan to build four lithium, nickel refineries

India has approved a Rs 2,814 crore scheme to establish four lithium and nickel refineries, marking its first major attempt to develop domestic capacity to process critical battery minerals and reduce dependence on imports.

The Union Cabinet cleared the Capital Support Scheme to Promote Critical Mineral Processing on November 4.

The plan will provide 30% of the capital cost of four plants, including two lithium refineries with a minimum capacity of 30,000 tonnes each and two nickel units with a capacity of at least 50,000 tonnes each.

The government expects the scheme to attract Rs 10,000 crore in investment and create annual processing capacity of 60,000 tonnes of lithium and 100,000 tonnes of nickel by 2030.

The move comes as India remains heavily dependent on imports for lithium, nickel and cobalt. In 2025, the country imported 18,200 tonnes of lithium compounds worth Rs 11,160 crore, with around two-thirds coming from China.

China currently controls about 65% of global refining capacity for battery-grade lithium chemicals. India's domestic lithium refining capacity, meanwhile, is virtually non-existent.

The refinery scheme is part of a broader push to strengthen the battery supply chain. A day after approving the plan, the Cabinet also cleared Rs 14,500 crore in viability gap funding for 92 GWh of grid-scale energy storage projects.

However, the success of the refinery plan will depend on access to raw materials, technology and buyers. The scheme covers lithium obtained from ores and concentrates, meaning India will need substantial supplies of hard-rock lithium ore.

Competition from Chinese refiners, lower processing costs and fluctuations in mineral prices could also pose challenges.

Hyderabad-based Altmin and Noida-based Lohum have announced plans for lithium carbonate refineries that meet the scheme's minimum capacity requirements. Vedanta also produces nickel sulphate on a small scale in Goa.