India

The Constitution of India stands at the apex of the Indian legal system, which is largely derived from common law. Under Entry 54 of the Union List, the Parliament of India enacted the Mines and Minerals (Development and Regulation) Act, 1957 (“MMDR Act”), which serves as the principal legislation governing the development and regulation of mines and minerals in India.

The following rules have been issued under the MMDR Act and constitute essential components of the framework governing the mining sector:

• Mineral (Auction) Rules, 2015 provide terms, conditions and procedure for conducting mineral auctions, including net worth requirements and bidding parameters;
• Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016 provide terms and conditions of mineral concessions, stipulations concerning mining plans, procedures for transferring mineral concessions and the manner of calculating royalty payable on minerals; and
• Mineral Conservation and Development Rules, 2017 set out provisions relating to sustainable mining, requirements for plans and sections, and the stipulations concerning mining operations.

The Offshore Areas Mineral (Development and Regulation) Act, 2002 governs the development and regulation of mineral resources in India’s offshore areas. It establishes the framework for granting offshore mining rights, including eligibility criteria and procedures for allocation. The following rules were subsequently notified under this act:

• Offshore Areas Mineral (Auction) Rules, 2024 prescribe the terms, conditions and procedure for conducting mineral auctions, including net worth requirements and bidding parameters;
• Offshore Areas Operating Right Rules, 2024 specify the terms and conditions governing operating rights, production plan requirements, transfer of such rights and the way of calculating royalty; and
• Offshore Areas Mineral Conservation and Development Rules, 2024 prescribe requirements relating to sustainable mining practices, the preparation of plans and sections, and the conduct of production operations.

The Occupational Safety, Health and Working Conditions Code, 2020, contains a dedicated section addressing mines, ensuring that mining operations are subject to a comprehensive and consolidated occupational safety regime, regulating health and working conditions of persons employed in such establishments.

Unless expressly stated otherwise, the responses provided herein relate to onshore major minerals and exclude atomic and fuel minerals, which are governed by separate legal and regulatory framework.

The Supreme Court of India in its judgment in Threesiamma Jacob and Ors. v. Geologist, Department of Mining and Geology and Ors . (reported as (2013) 9 SCC 725), held that no law provides for the automatic vesting of mineral wealth and subsoil rights in the state. It was held that ownership of sub-soil/mineral wealth ordinarily follows the ownership of the land, unless such rights have been lawfully divested. As held by the Supreme Court in Mineral Area Development Authority and Ors. v. Steel Authority of India and Ors. (reported as 2024 (8) SCALE 476) such divestment has generally taken the shape of land reform legislations enacted by state legislatures which vet the ownership of mineral or mineral rights in the state government.

The MMDR Act stipulates that no person shall undertake any mining operations in any area without a mining lease. Mineral concessions to undertake mining operations are ordinarily granted by the state government by way of auctions. Practically, irrespective of the issue concerning ownership, mining operations cannot be undertaken without a right granted by the state government under the MMDR Act.

A person can undertake mining operations under the following concessions:

• Mining lease. Granted for operations for the purpose of winning minerals. This is granted for areas where there is evidence to show existence of mineral contents.
• Composite licence. Comprises a prospecting licence (authorising operations for the purpose of exploring, locating or proving mineral deposit) followed by grant of a mining lease upon the successful and satisfactory completion of such prospecting. This is granted in respect of areas where the evidence to show the existence of mineral contents is inadequate.
• Exploration licence. Granted in respect of specified minerals to undertake reconnaissance operations, prospecting operations, or both. Where a mining lease is subsequently granted in respect of such area, the licensee is entitled to a prescribed share of the auction-discovered amounts payable by the mining lessee to the state government.

The MMDR Act permits the holder of a mineral concession to enter the land in respect of which the lease, license or permit has been granted and undertake corresponding mining operations. However, except with prior consent of the occupier, the concession holder must provide at least seven days’ notice before entering any building, or any enclosed court or garden attached to a dwelling-house. Further, the holder of the mineral concession must compensate the occupier of surface land for any loss or damage caused, or likely to be caused, by the mining operations. The amount of compensation is determined by the state government having jurisdiction over the land.

From a practical standpoint, mineral concession holders often lease or purchase the land over which the concession has been granted to avoid potential conflicts and facilitate mining operations.

The central government is vested with the regulation of mining (which includes the manner of and eligibility for the granting of mineral concessions, and the terms and conditions of mineral concessions), whereas the state government is commonly responsible for conducting the process of granting mineral concessions. Notably, the central government has been empowered to conduct the auction of mineral concessions where the state government fails to complete the auction or reauction of a mineral block within the stipulated timeframe and when “critical minerals”, such as lithium, cobalt, nickel-bearing minerals, and so on, are being auctioned. Even in such cases, the mineral concession is granted by the state government to ensure no overlap in jurisdiction.

All mining leases are granted for a period of 50 years and with regard to composite licenses, prospecting operations under a prospecting license prior to commencement of mining operations under the mining lease may be granted for a maximum period of three years. However, the MMDR Act does not provide for the renewal of such a mineral concession. After expiration of the mineral concession, the block is put up for reauction. A reconnaissance permit may also be granted for a period not exceeding three years.

A prospecting licence may be renewed for a further period not exceeding two years, provided the state government is satisfied that such extension is necessary to enable the licensee to complete prospecting operations.

Transfer of a mineral concession is allowed subject to prior approval of the state government and is deemed to be granted if no approval is conveyed for 90 days. The transfer is subject to the transferee accepting all conditions and liabilities under any law, as was the transferor.

It remains unclear whether acquisition of a controlling equity stake in a company holding mineral concession constitutes a transfer of the concession requiring approval of the state government. In State of Rajasthan and Ors. V. Gotan Lime Stone Khanji Udyog Private Limited and Another (reported as (2016) 4 SCC 469), the Supreme Court of India indicated that, in substance, share transfer could amount to a transfer of the concession. However, as a matter of current practice, approval in such cases is not being sought.

The MMDR Act broadly classifies minerals into two categories:

• “minor minerals”, which are defined to include building stones, gravel, ordinary clay, ordinary sand and any other minerals so declared by the central government; and
• minerals other than minor minerals, which are referred to generally as “major minerals”.

While concessions for both minerals are granted by state governments, the central government primarily regulates the legal and regulatory framework for major minerals, whereas the regulation of minor minerals is largely within the domain of state governments.

India’s environmental law framework derives from the Constitution, which establishes foundational principles through:

• Article 48-A, a directive principle requiring the state to protect and benefit the environment and preserve forests and wildlife; and
• Article 51A(g), which imposes a fundamental duty on citizens to safeguard the natural environment, including forests, lakes, rivers and wildlife.

Additionally, the Apex Court of India has interpreted the fundamental right to life under Article 21 of the Constitution as encompassing the right to live in a clean environment.

Statutory environmental protection at the federal level is governed by several key enactments, including the Water (Prevention and Control of Pollution) Act, 1974, Air (Prevention and Control of Pollution) Act, 1981, Environment (Protection) Act, 1986, Van (Sanrakshan Evam Samvardhan) Adhiniyam, 1980, Wildlife (Protection) Act, 1972, Public Liability Insurance Act, 1991, Biological Diversity Act, 2002, National Green Tribunal Act, 2010, and so on.

This legal and regulatory framework mandates various permits prior to establishing, operating or conducting mining activities. Principal approvals include the consent to establish/operate, various environmental approvals under the notifications/rules issued under the Environment (Protection) Act, 1986 (including “prior environmental clearance”), and forest clearance.

The Ministry of Mines, in the year 2020, issued directions to enable state governments to auction mineral blocks with pre-embedded statutory clearances, with the objective of promoting ease of doing business in the mining sector and expediting the operationalisation of mines into production. Under this framework, out of the approximately 20 approvals required to commence mining operations, environment and forest clearances are recognised as the most critical.

Obtaining “prior environmental clearance” pursuant to the Environment (Protection) Act, 1986 necessitates a public consultation process administered by the State Pollution Control Board, which is designed to identify concerns raised by local communities and other stakeholders with legitimate interests in the project’s environmental effects. These concerns must be addressed in the environmental impact assessment and environmental management plan, with which the project proponent must comply.

India is home to a large and diverse tribal population. The Constitution of India grants special protections to identified tribes, obligating the state to promote their educational and economic welfare and shield them from exploitation. District councils in tribal areas of Assam, Meghalaya, Tripura and Mizoram have autonomy and receive a share of annual royalties from licenses or leases for prospecting and extraction.

Various legislations protect tribal interest. The Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 grants forest rights to forest-dwelling scheduled tribes. The Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016 require mining lessees to prioritise employment of tribal and displaced persons.

The National Mineral Policy advocates an integrated approach combining mineral development, regional growth and tribal socio-economic welfare. It acknowledges that long-established mining communities face job losses and social disruption upon mine closure. To address this, the policy provides that mines must be closed in an orderly and systematic manner.

The Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016 require mining lessees’ preference of employment to tribal and persons displaced by mining operations.

There are no specific ESG guidelines or regulations in India for the mining sector. Instead, the framework in this regard is spread across various laws governing corporate governance (the Companies Act, 2013), environmental protection, labour laws and stipulations in the MMDR Act and the rules issued thereunder.

In May 2021, the Securities and Exchange Board of India introduced new reporting requirements on ESG parameters: the Business Responsibility and Sustainability Report (BRSR). These requirements were made mandatory for the top 1,000 listed companies (by market capitalisation) from FY 2023–24, which are obligated to disclose their performance based on the nine principles relating to responsible business conduct. This encourages companies to engage meaningfully with stakeholders on social and environmental matters beyond financials. The report covers ESG-focused research and development, and investments in technology which improve social impact assessments, beneficiaries of corporate social responsibility project (including vulnerable groups), emissions and waste-management initiatives, and mechanisms for addressing human rights issues.

In July 2023, the “BRSR Core” was introduced, as a sub-set of the BRSR, consisting of a set of key performance indicators/metrics under nine ESG attributes.

Indian companies have also been voluntarily adopting various ESG policies aimed at reducing their carbon footprint and increasing expenditure on corporate social responsibility. “BRSR Lite” is a simplified sustainability reporting framework for smaller companies on a voluntary basis, including unlisted entities. It focuses on key ESG disclosures, such as material ESG issues, responsible sourcing, and stakeholder engagement.

Under the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016, “illegal mining” means any reconnaissance, prospecting or mining operations undertaken by any person or company in any area without holding a mineral concession.

State governments are empowered under the MMDR Act to frame rules preventing illegal mining, transportation and storage of minerals. Such rules may establish check-posts, weighbridges, and inspection procedures for minerals during excavation, storage or transit.

Illegal mining is punishable by imprisonment up to five years and a fine of up to INR 5 lakh per hectare.

Courts take a strict approach to illegal mining. The Supreme Court directed In Goa Foundation v. Union of India and Ors. (reported as (2014) 6 SCC 590) that rules have to be strictly enforced by state governments in order to control and regulate the mining, storage and transportation of minerals and prevent leakages and evasion of revenue.

In the matter of Common Cause and Ors. v. Union of India and Ors. (reported as (2017) 9 SCC 499), the Supreme Court opined that “illegal mining” includes excess extraction beyond permissible limits within a lawfully held lease area, where such extraction violates the mining scheme, mining plan, mining lease or statutory requirements and is not confined only to mining operations outside a leased area. The court reasoned that minerals are natural resources benefiting everyone, not just lease holders.

India has committed to reduce the emission intensity of its GDP by 47% from its 2005 levels by 2035. Measures under consideration include the carbon trading market.

The Mineral Conservation and Development Rules, 2017 require mining lessees to undertake sustainable mining with all possible precautions. The Indian Bureau of Mines operates a “Star Rating” system to evaluate sustainability efforts, requiring lessees to achieve at least a three-star rating within four years of commencing mining operations and maintain it annually.

The MMDR Act empowers the central government to direct state governments on scientific and sustainable development and exploitation of mineral resources, including in relation to:

• implementation and evaluation of sustainable development frameworks;
• reduction in waste generation and related waste management practices and the promotion of the recycling of materials;
• minimising and mitigating adverse environmental impacts, particularly in respect of ground water, air, ambient noise and land;
• ensuring minimal ecological disturbance in terms of biodiversity, flora, fauna and habitat; and
• promoting restoration and reclamation activities so as to make optimal use of mined-out land for the benefit of the local communities.

The National Mineral Policy also recognises that mining must be financially viable, socially responsible and environmentally, technically and scientifically sound, with a long-term view of development, optimal resource usage and sustainable post-closure land uses.

Under the MMDR Act, the central government alone is empowered to conduct auctions to grant mineral concessions for “Critical and Strategic Minerals”, which include energy transition minerals such as lithium, cobalt and nickel.

To encourage private participation in exploration of critical minerals, the Government of India offers schemes for reimbursing up to 50% of the exploration expenditure.

These initiatives aim to boost exploration and mining of critical minerals, supporting India’s green transition, net-zero emissions goal by 2070, and reducing supply chain vulnerabilities.

Under the MMDR Act, mining lessees must pay the following:

• Royalty on minerals removed or consumed, at the rate set out in the MMDR Act, payable either as a flat rate per tonne or on an ad valorem basis, with regard to a sale price published by the Indian Bureau of Mines.
• Dead rent for leased areas, at rates set out in the MMDR Act. Lessees are liable to pay the higher of the royalty or the dead rent in respect of that area.
• A 3% contribution (of the royalty paid) to the National Mineral Exploration Trust for regional and detailed exploration.
• A contribution to the District Mineral Foundation which benefits persons and areas affected by mining. Concessionaires pay up to one third of the royalty payable to the foundation in the district where operations are carried on.

Other applicable taxes include Income Tax, indirect taxes (customs duties, Goods and Services Tax, etc.) and stamp duties.

These levies apply equally to national and foreign investors. However, the MMDR Act stipulates that mineral concessions can only be granted in favour of Indian entities (although such entities may have foreign investment or be foreign-owned or controlled).

The Income Tax Act, 2025, permits entities engaged in prospecting, extraction or production to claim deduction of one tenth of its expenditure on prospecting or mine development. Deduction is on expenditure on operations relating to prospecting for any mineral or group of associated minerals specified in Part A or Part B, respectively, of Schedule XII of the Income Tax Act, 2025. Under the Union Budget, 2026–27, to incentivise prospecting and exploration of critical minerals, it is proposed to include certain critical minerals in the list of minerals under Schedule XII. However, India does not have tax stabilisation agreements.

4.3 Transfer taxes and capital gains

The transfer or sale of a mineral concession is subject to capital gains tax, as mineral rights are considered capital assets.

The transfer or sale of a mineral concession is subject to capital gains tax, as mineral rights are considered capital assets.

FDI up to 100% is permitted under the “automatic route” (i.e. without prior government approval) for mining and exploration of metal and non-metal ores, including diamonds, gold, silver and precious ores.

India’s FDI regime permits 100% FDI under the automatic route for mining and exploration of metal and non-metal ores, including diamonds, gold, silver and precious ores, subject to the MMDR Act.

FDI in the mining of titanium-bearing ore requires government approval, and FDI is prohibited for certain prescribed atomic minerals.

Since the 1990s, India has been party to numerous bilateral treaties aimed at the reciprocal promotion and protection of investments. Many of these treaties have been terminated in recent years, and India is currently in the process of negotiating fresh treaties with various countries. For instance, India and the EU announced the conclusion of negotiations for a free trade agreement in January of 2026, which unlocks opportunities in the mines and minerals sector by allowing zero duty across 100% of the tariff lines, thereby breaking cost barriers and ensuring India exports quality, reliable, and value-added minerals to the EU. Additionally, India and the UK entered into a Comprehensive Economic and Trade Agreement in July 2026, creating new opportunities for India’s mineral sector, particularly the aluminium industry, by enhancing market access and improving competitiveness in the UK market. Further, in May of 2026, the United States and India signed a bilateral critical minerals framework, marking a significant milestone in their strategic partnership to strengthen trusted supply chains and ensure the availability of critical minerals that are essential for advanced technologies and the energy transition. There are also negotiations underway for a new trade agreement between India and the United States.

Private companies typically fund mining operations through equity and debt (domestic or foreign) from banks and non-banking financial companies. Project finance is available based on projected cash flows.

As per rule 25 of the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016, concession holders may create encumbrances over their concession. Upon enforcement, the concession may only be transferred to persons meeting all eligibility conditions. Creditors may apply for the transfer of concession for enforcing the security interests.

The Indian Bureau of Mines (IBM), a subordinate office under the Ministry of Mines, publishes information on the scientific development and conservation of mineral resources (excluding coal, petroleum, natural gas, atomic minerals and minor minerals). The IBM maintains a National Mineral Inventory that consolidates information on exploration, development, and mining operations conducted across India by governmental bodies at both central and state levels, public utilities, and private entities. This inventory organises data by mineral type and state, covering aspects such as geographic location, available infrastructure, geological characteristics, exploration status, physical and chemical attributes, and whether land is held as freehold or leasehold.

IBM’s Mining and Mineral Statistics Division serves as the central coordinating body for mineral sector statistics. Mine operators, mineral traders, exporters, and related parties must submit periodic reports covering mineral extraction and disposition, including employment figures, production volumes, inventory levels, shipment data, prevailing sale prices, and consumption of materials. This statistical information is disseminated through various IBM publications.

The Geological Survey of India (GSI) is responsible for conducting geological mapping and compiling geoscience data nationwide. The agency generates and shares this information with other exploration entities to facilitate and expedite mineral exploration activities.

Pursuant to the National Mineral Exploration Policy 2016, GSI must make all pre-competitive baseline geoscience data available to interested parties at no charge. GSI also operates the Bhukosh Portal, a geoscientific data dissemination platform. It provides free access to geological maps, geochemical and geophysical data, mineral resource information and district resource maps, thereby facilitating informed decision-making for mineral exploration and investment.

Beyond GSI, detailed exploration and data management activities are also undertaken by Directorates of Geology and Mines of certain state governments, Mineral Exploration and Consultancy Limited, and various other government-owned entities.

The National Mineral Exploration Trust additionally performs regional and detailed mineral exploration work. IBM also makes available information concerning the number of active mines and their mineral quality, either for a fee or through restricted access arrangements at its offices.

With respect to reporting obligations, holders of mineral concessions must submit geophysical data pertaining to prospecting, mining, and engineering activities to both GSI and the relevant state government. Parties may also consider the Index of Mineral Production, which measures mining sector growth relative to a base year. Further, the PM GatiShakti National Master Plan, a software platform where ministries periodically update data, aids in support, planning, review and monitoring across sectors.

An amendment in 2026 to the Mineral (Auction) Rules, 2015 introduced the Unified Mining Portal. This portal streamlines the mineral concession lifecycle, covering block identification, auction preparation, regulatory clearances and operational monitoring. It also enables automatic issuance of letters of intent upon receipt of a first instalment of upfront payment and/or performance security.

The most common business structure which parties use to carry out mining activities is through a special purpose vehicle or a general operating company, incorporated under the Companies Act, 2013. Such entities may directly hold mining leases and conduct extraction operations. Joint ventures are frequently used where multiple parties wish to share capital, technical expertise, and operational risk. The mine developer and operator model is also common in the industry, whereby the concession holder engages a separate contractor to undertake and discharge the mine development and operations.