India's Mineral Sector Stagnates Amid Policy Hurdles
India's mineral sector faces challenges that hinder its potential to drive economic growth. Current policies limit private companies to exploration without preferential mining lease allotment. This, coupled with inadequate incentives and financing, has led to a near halt in private sector exploration.
The mineral industry, crucial for India's US$5 trillion economy target by 2024-25, is currently under-explored. Only 10 per cent of India's area has been surveyed for minerals. The contribution of the mineral industry to GDP has also decreased, from 3 per cent in 2011-12 to 2.2 per cent in 2018-19.
Key mining geographies offer seamless licensing from exploration to mining, allowing 'junior explorers' to sell their data and mining rights at a premium. However, the lack of specific details about these companies operating in India and their impacts on mineral exploration and extraction highlights the need for policy reforms. The current system, where private companies can only explore through a Non-Exclusive Reconnaissance Permit (NERP) with no preferential treatment, has led to a decline in private sector exploration due to inadequate incentives, unavailability of financing, and limited technology and skills. The NERP holder's returns are protracted and inadequate, further discouraging investment.
To reduce the trade deficit due to mineral imports and boost the mineral industry's contribution to GDP, India must allow a seamless transition from exploration to mining for private companies and permit license sales at any stage. This includes adopting international practices to encourage junior explorers and ensuring adequate financing for exploration. Such reforms could help India tap into its domestic reserves and stimulate growth in the mineral sector.
Read also:
- Mars Petcare Opens Gold-LEED Certified Center, Aims for Carbon Neutrality by 2040
- Planned construction of enclosures within Görlitzer Park faces delays
- Controversy resurfaces following the elimination of diesel filter systems at Neckartor: A renewed conflict over the diesel restriction policy
- Perennial Seeks Growth Marketing & GTM Associate for Carbon Removal Mission
