The Indian central government introduces a bill to limit states’ powers to levy taxes on mineral rights, aiming to streamline regulation and attract investment amidst ongoing legal disputes.
The Indian government has moved to tighten central control over the mining sector, introducing a bill in the Lok Sabha on Monday that would curb states’ ability to levy additional taxes and cesses on mineral rights. The proposed Mines and Minerals (Development and Regulation) Amendment Bill, 2026, also seeks to place mineral-bearing lands under stronger regulation from New Delhi, setting up a fresh clash with states after a recent Supreme Court ruling that backed their power to tax mineral rights.
According to the Bill, state governments would be barred from imposing any tax, cess or other levy on mineral rights, regardless of the label used. The same restriction would apply to mineral-bearing land when charges are based on mineral quantity, value, royalty or similar measures, unless they fall within limits prescribed by the Centre. The legislation would also invalidate any such levy not deposited or recovered before the new law takes effect, while protecting sums already collected from being refunded.
Coal and mines minister G. Kishan Reddy told lawmakers the changes are intended to bring greater certainty to the fiscal regime for minerals and support broader economic goals, including Atmanirbhar Bharat and Viksit Bharat 2047. He argued that uneven state taxation can raise extraction costs, push up transport expenses, discourage domestic supply lines and, in some cases, increase imports even when local resources are available. He also said retrospective levies create legal uncertainty and weaken investor confidence.
The new bill comes as the Centre has already been pushing for wider reforms in mining. The International Energy Agency has described the 2025 amendments to the MMDR framework as part of a drive to accelerate production, widen financing for exploration and create a more transparent mineral market. More recently, the Ministry of Mines notified changes to concession rules to allow additional minerals and contiguous land to be folded into existing leases, a move meant to improve access to critical and deep-seated minerals needed for industry and clean energy.
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