UPSC Prelims Practice Questions — Centre earmarks ₹2,814 crore for lithium, nickel processing

Q1. The critical-mineral value chain is often split into upstream, midstream and downstream stages. Consider the following activities: Which of the activities given above fall/falls within the midstream stage that India's 2026 capital expenditure support scheme for lithium and nickel targets?

  1. Converting spodumene concentrate into battery-grade lithium hydroxide
  2. Assembling lithium-ion cells into battery packs for electric vehicles
  3. Bidding for an exploration licence over a lithium-bearing block
  • A. 1, 2 and 3
  • B. 2 and 3 only
  • C. 1 and 2 only
  • D. 1 only

Q2. Governments use different instruments to promote industrial capacity. Which of the following support designs gives its benefit to a firm regardless of how much the supported facility later produces or sells?

  • A. A fixed payment per tonne of refined output delivered to domestic buyers
  • B. An incentive computed as a share of incremental sales over a base year
  • C. A subsidy computed as a share of eligible investment in plant and machinery
  • D. A per-kWh subsidy paid on batteries sold that meet value-addition norms

Q3. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. Under the Production Linked Incentive scheme for Advanced Chemistry Cell (ACC) battery storage, a beneficiary that builds a plant but sells no batteries made in India receives no incentive.
  2. Under the ACC PLI scheme, the incentive is paid as a one-time reimbursement of a share of the capital invested once the plant is commissioned.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q4. With reference to the National Critical Mineral Mission (NCMM), consider the following statements: Which of the statements given above are correct?

  1. It covers the value chain from mineral exploration and mining through processing to recovery from end-of-life products.
  2. It includes provisions for setting up mineral processing parks.
  3. Its scope is confined to critical minerals found within India's land territory and its offshore areas.
  4. Its financing expects investment by public sector undertakings in addition to budgetary support from the Government of India.
  • A. 1 and 3 only
  • B. 1, 2 and 4 only
  • C. 1, 2, 3 and 4
  • D. 2 and 4 only

Q5. Consider the following facts: India's National Critical Mineral Mission covers exploration, auction of blocks, processing, recycling and acquisition of mineral assets abroad. Under this framework, a recycling incentive was approved in 2025. In 2026, a capital expenditure support scheme for lithium and nickel processing facilities was approved. Which of the following inferences can be drawn from the above facts?

  1. India's critical-mineral strategy seeks to build domestic supply from both primary and secondary sources.
  2. The government has concluded that recycling alone can meet India's demand for lithium and nickel.
  3. The strategy treats domestic processing capacity as a complement to, rather than a substitute for, access to raw material.
  • A. 1 and 3 only
  • B. 2 only
  • C. 1 only
  • D. 1, 2 and 3

Q6. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. The Battery Waste Management Rules, 2022 allow waste batteries to be disposed of in landfills wherever adequate recycling capacity is not available.
  2. Under the Battery Waste Management Rules, 2022, producers must meet targets for collection and recycling or refurbishment of waste batteries, measured against the batteries they place on the market.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q7. A company imports lithium-ion batteries and sells them in India, but runs no recycling facility of its own. Under the Battery Waste Management Rules, 2022, how can this company meet its obligation for the batteries it places on the market?

  • A. By sending the waste batteries it collects to a secured landfill run by the state
  • B. By claiming exemption, as obligations fall only on firms that make batteries in India
  • C. By transferring its collection obligation to the urban local body where it sells
  • D. By procuring EPR certificates generated by registered recyclers against its obligation

Q8. With reference to the auction of critical-mineral blocks under the Mines and Minerals (Development and Regulation) Act, 1957, as amended in 2023, consider the following statements: Which of the statements given above is/are correct?

  1. The Central Government is empowered to auction mining leases and composite licences for the critical and strategic minerals listed in Part D of the First Schedule.
  2. The auction premium and other statutory payments from blocks auctioned by the Centre continue to accrue to the State Governments.
  3. The Centre's auction power under the amendment extends to every mineral in the First Schedule, including bulk minerals such as iron ore and bauxite.
  • A. 1, 2 and 3
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1 only