India considers incentives for lithium processing

According to three government sources, India is thinking of providing incentives to entice private businesses to establish lithium processing facilities, as New Delhi looks to expand its fledgling lithium mining industry and increase supply of the metal used in EV batteries.

According to the sources, it would provide incentives for businesses to establish lithium processing facilities in accordance with a new essential minerals policy that the mines ministry was developing. “The critical minerals policy will be.

comprehensive and will cover all aspects from exploration to mining to value addition,” according to a source. “It will also cover incentives for beneficiation and refining within the country,” according to a source.

The sources added that while it was still early to predict exactly what kind of incentives the government will provide, New Delhi would want to emulate nations like Canada and Australia.

In response to inquiries from Reuters, the Ministry of Mines stated that several measures were being taken by the government to guarantee the supply of essential minerals for the downstream sector. It didn’t go into detail.

To stimulate investment in lithium processing, the government may provide tax breaks and subsidies, according to Karthik Bansal, a research analyst at the Centre for Social and Economic Progress in New Delhi. India, the third-largest carbon emitter in the world, identified 30 minerals, including lithium,

As “critical” to achieving the nation’s goal of greener technology in industries including electronics, telecommunications, transportation, and defence last year. It only discovered its first lithium reserves last year, and according to industry analysts, the nation has to establish.

infrastructure for processing lithium domestically. Businesses vying for important mineral blocks, which contain lithium, include the producer of e-scooters Ola Electric, funded by SoftBank, and miners Vedanta Ltd. and Jindal Power. A shortlist is anticipated in July. The winners will get permits to mine and explore lithium, They will be in charge of turning it into lithium compounds or concentrates for the battery sector.

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The Indian government is exploring incentives to boost domestic lithium processing, aiming to reduce dependency on imports and strengthen the country’s position in the global battery supply chain. With lithium being a critical component for electric vehicle (EV) batteries and renewable energy storage, this initiative aligns with India’s push for sustainable energy solutions and self-reliance.

Proposed Incentives and Policy Measures

The incentives under consideration include:

• Subsidies and Tax Benefits: Financial support for companies investing in lithium refining and processing infrastructure.
• Production-Linked Incentive (PLI) Scheme Extension: Expanding the existing PLI scheme to cover lithium processing units.
• Research & Development Support: Encouraging innovation in lithium extraction and battery technology through government-funded projects.
• Easier Land and Environmental Clearances: Streamlining approval processes to facilitate quicker project implementation.

Strategic Importance of Lithium Processing

India currently imports most of its lithium needs, making local processing essential for:

• EV Industry Growth: Reducing costs and securing raw material supply for India’s fast-expanding EV market.
• Energy Security: Minimizing reliance on foreign lithium sources and ensuring stable battery production.
• Economic Benefits: Creating jobs and attracting global investments in the clean energy sector.

Future Outlook

With the government’s focus on promoting domestic lithium refining, India could emerge as a key player in the global battery ecosystem. If implemented effectively, these incentives could drive investment, technological advancements, and sustainable growth in the sector, furthering India’s clean energy ambitions.

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