India Plans INR 3,000 Crore Incentives for Lithium, Nickel Processing and E-Trucks

The Union government is set to introduce a new policy offering incentives for the domestic processing of critical minerals like lithium and nickel, with an estimated outlay of approximately INR 3,000 crore ($313 million). This strategic initiative aims to significantly bolster India's electric vehicle (EV) supply chain, reducing the nation's reliance on imports for key battery components. To qualify, lithium processing facilities would need a minimum annual capacity of 30,000 metric tonnes, while nickel plants would require 50,000 metric tonnes, encouraging large-scale domestic production.

Building on the success of the PM E-Drive pilot project, the government is also developing a larger support scheme for electric trucks. A substantial subsidy allocation of INR 500 crore is planned for electric trucks with a gross vehicle weight (GVW) ranging from 3.5 tonnes to 55 tonnes. Incentives will be calculated at INR 5,000 per kilowatt-hour of battery capacity, capped at 10% of the vehicle's ex-factory price. This move aims to accelerate the deployment of 5,000–6,000 e-trucks nationwide, decarbonizing the logistics sector and promoting green transportation.

These incentives are expected to catalyze significant investment in the automotive components industry, projected to grow by 8-10% in FY2026. An estimated INR 250-350 billion will be directed towards capacity enhancement, localization, and the development of new technologies, including EVs. India's overall battery manufacturing capacity is also anticipated to increase substantially, from 60 GWh to 100 GWh by 2026. This comprehensive approach aims to create a robust, self-reliant EV ecosystem, driving economic growth and environmental sustainability.