New MMDR Amendment Bill paves way for stronger push to mining-led growth

New Delhi, Aug 18 (IANS) The Mines and Minerals (Development and Regulation) Amendment Bill, 2026, which has been approved by both the Houses of Parliament, seeks to establish a uniform and balanced fiscal framework for the mining sector. As per the Bill, state governments cannot levy fresh taxes on mineral rights and mineral-bearing lands, except within conditions prescribed by the Central Government, according to an explainer issued by the government on Tuesday.

Unregulated and varying state levies are steadily eroding the viability of mining, raising costs across industry and households alike. The MMDR Amendment Bill, 2026 seeks to address these concerns by bringing predictability, uniformity and rationality to the taxation of minerals, the statement said.

When Indian minerals cost more than imported ones, user industries such as steel source raw material abroad. India imported minerals worth Rs 10,12,529 crore in FY 2025-26.

At the same time, outpriced domestic minerals lose ground in export markets, where iron ore alone earned Rs 15,136 crore in FY 2025-26. Curbing this cost escalation is essential to the ‘Atmanirbhar’ goal in the mineral sector, the statement points out.

A levy at the mining stage is added directly to the mineral’s price. It then passes through steel, cement, electricity and construction. Ordinary families finally pay more for housing, power and essential goods. Rational mining taxation is therefore a matter of everyday affordability.

Growing global uncertainty makes a resilient domestic mining sector essential. The government has given special push to critical minerals to shield supply from external shocks. The coal sector is simultaneously being made more competitive and technologically advanced to reduce import dependence. A viable and predictable tax regime is a precondition for both.

States currently impose around 14 taxes, charges and fees on mining. These include royalty, auction premium, dead rent, DMF payments, GST and transit fee. Some states have additionally begun taxing mineral-bearing lands, in certain cases at rates as high as 20 per cent. The bill addresses this cumulative and open-ended burden on the sector.

Taxes extend even to critical minerals such as graphite and atomic minerals such as uranium. High levies make the extraction of these strategic minerals uneconomical. Differing rates across States also create disparity within the sector. Rationalisation is necessary to keep strategic mineral projects commercially workable, the statement observes.

Widely differing state levies cause mineral costs to vary sharply across regions. Such variation obstructs supply chains and pushes up transport and logistics costs. A unified national mineral market cannot function under fragmented tax rates. The Bill seeks to ensure greater uniformity.

The coal sector employs over 5 lakh people directly and indirectly while the non-coal sector supports more than 1 crore workers. High levies have already forced some mines to close and left other projects unopened. Small and medium operators work on thin margins and shut down first, taking local jobs with them, the statement explains.

Investors commit capital to mining only where the tax structure is stable and foreseeable. Sudden changes discourage such commitment and slow technological and infrastructural expansion. Manufacturing, defence, shipping, construction and renewable energy all depend on this mineral base. A stable regime under the Bill is intended to secure that confidence, the statement added.

–IANS

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