The Mines Ministry announced on Tuesday that it will soon introduce an incentive scheme to promote domestic processing of lithium and nickel in India. According to reports from The Economic Times, Mines Secretary Keshav Chandra made this announcement at the 60th Annual General Meeting of the Federation of Indian Mineral Industries (FIMI). The initiative is designed to support the creation of an integrated critical mineral value chain in the country and reduce India's dependence on imported processed materials.
The National Critical Mineral Mission has planned 1,200 critical-mineral exploration projects through FY31, while the Geological Survey of India conducted 230 projects in FY26, according to a September 2026 KPMG-FICCI report. India has explored less than 15% of its obvious geological potential and consumes less than 1% of the global exploration budget, the report said. The deep-sea opportunity is further out, with India having exploration rights over 75,000 sq km in the Central Indian Ocean Basin, estimated to contain about 366 million tonnes of polymetallic nodules containing nickel, cobalt, manganese and copper. However, the domestic offshore auction failed to attract adequate bids, with the deep-sea programme currently an exploration and technology-development theme rather than commercial mining.
Vedanta has secured 10 critical-mineral blocks covering gold, manganese, copper, nickel-chromium-PGE, tungsten, graphite, vanadium, rare earth elements and potash, with exploration underway across five blocks. The company was also declared the successful bidder for the Punnam manganese block in Andhra Pradesh. In August, Vedanta commissioned what it described as India's first high-speed hydrostatic portable drilling rig, capable of drilling up to 1,000 metres compared with the typical 300–400 metre range. GRSE is building four specialised research vessels with an original combined contract value of about ₹1,821 crore, including the ₹840-crore Sagar Manthan Ocean Research Vessel for NCPOR and a ₹491-crore Acoustic Research Ship for NPOL. Titagarh Rail Systems has a ₹445-crore pre-GST subcontract from GRSE for construction of two GSI vessels, having previously delivered two research vessels to the National Institute of Ocean Technology.
The government's incentive scheme could potentially improve the economics and competitiveness of domestic lithium processing, though actual benefits to companies will depend on the scheme's final details. According to The Financial Express, the immediate opportunity lies in research vessels and exploration infrastructure rather than mining companies, with commercial resources requiring extensive drilling, independent resource estimation and feasibility studies over a long period - typically averaging 15 years from discovery to production. Vedanta's existing metals operations provide a separate earnings base, with the company reporting revenue of ₹23,456 crore in Q1 FY27 and EBITDA margin of about 57%. GRSE's research-vessel exposure represents about 5-8% of revenue at peak execution, contributing roughly ₹400-600 crore annually during peak execution.
Building research vessels is only one part of the deep-sea programme, with exploration at depths of 5,000-6,000 metres requiring specialised subsea payloads and systems. As reported by The Financial Express, India still depends materially on overseas suppliers for AUVs, sonar, scientific winches, A-frames and ROV-handling systems, with no Indian-listed company yet demonstrating a comparable, fully integrated deep-rated technology stack. The broader mining opportunity faces its own execution challenges, with the KPMG-FICCI report identifying the ability to convert capital into "scientifically proven exploration targets" and "high-quality and cost-efficient drilling program" as key requirements. The eventual business impact will depend on how quickly policy measures translate into exploration projects, resource discoveries, processing capacity and downstream manufacturing.
