Mines and Minerals (Development and Regulation) Amendment Bill, 2026

Recently, the Mines and Minerals (Development and Regulation) Amendment Bill, 2026 was passed by both Houses of Parliament on 13 August 2026. It seeks to amend the Mines and Minerals (Development and Regulation) Act, 1957 to bring greater stability, predictability and uniformity to the fiscal regime governing the major minerals sector and encourage investment in domestic mining.

Regulation of Mines and Minerals in India 

The Mines and Minerals (Development and Regulation) Act, 1957 is the principal Central law governing the development and regulation of mines and minerals in India.

• Under Entry 54 of the Union List, Parliament can regulate mines and mineral development in the public interest.
• Under Entry 23 of the State List, States regulate mines and mineral development subject to the Central framework.
• Under Entry 50 of the State List, States can impose taxes on mineral rights, subject to limitations imposed by Parliament.
• Under Entry 49 of the State List, States have the power to tax land and buildings. Land itself is a State subject under Entry 18.
• The Central framework primarily governs major minerals, while States have greater regulatory powers over minor minerals.

Therefore, the mining sector operates through a shared Centre-State framework, with States playing an important role in granting mineral concessions and collecting mining-related revenues.

Mines and Minerals (Development and Regulation) Amendment Bill, 2026 Need

The immediate background was the 2024 nine-judge Supreme Court judgment in Mineral Area Development Authority v. Steel Authority of India Ltd. (MADA v. SAIL), which clarified the constitutional powers of States over mineral taxation. 

The Court held that royalty is not a tax and clarified that States have the power to tax mineral rights under Entry 50 and mineral-bearing land under Entry 49. However, Parliament can impose limitations on taxation of mineral rights under Entry 50; this power does not extend to State taxation of land under Entry 49.

This created the constitutional backdrop for the 2026 Bill. The government argued that, in the absence of reasonable limits, States could impose multiple and uneven levies, increasing the cost and uncertainty of mining operations. The key concerns in the existing structure were:

• Multiple levies: Mining companies pay royalty, auction premium, District Mineral Foundation (DMF) contributions, Goods and Services Tax (GST), transit fees and other charges, increasing the overall cost of mining.
• Uneven State taxation: Different States impose different taxes, cesses, fees and charges, creating variations in the cost of mineral production and transportation.
• Investment uncertainty: New or retrospective levies can change the financial viability of a mining project even after substantial investment has been made.
• Higher domestic costs: A high and unpredictable fiscal burden can make Indian minerals more expensive than imported minerals, encouraging industries to rely on imports.
• Mineral import dependence: India imported minerals worth about ₹10.13 lakh crore in FY 2025-26, highlighting the need to strengthen domestic mineral production for economic and strategic security.

The government therefore sought to bring greater predictability to the fiscal regime while retaining the States’ role in mineral administration and revenue collection. Thus, the central objective of the Bill is to prevent excessive and unpredictable levies from making domestic mining uncompetitive, while maintaining a balance between the Centre’s regulatory role and the States’ constitutional and revenue interests.

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Mines and Minerals (Development and Regulation) Amendment Bill, 2026: Key Features and How It Addresses the Problem

The Mines and Minerals (Development and Regulation) Amendment Bill, 2026 seeks to make mineral taxation more predictable and uniform by placing reasonable conditions on State-level levies while strengthening the Central regulatory framework. 

• Regulation of mineral-bearing land: The Bill expands the Central Government’s regulatory role to mineral-bearing land, defined according to parameters prescribed by the Centre. This seeks to create a common framework for areas where mineral resources are found.
• Limits on State levies: States cannot impose specified taxes, cesses or other levies on mineral rights or mineral-bearing land except according to conditions or restrictions prescribed by the Central Government. This directly addresses the problem of widely varying State-level levies and provides greater certainty to mining investors. 
• Covers different bases of taxation: The restriction applies whether a levy is calculated on mineral quantity, mineral value, royalty or otherwise, reducing the possibility of multiple forms of taxation being imposed on the same mineral activity.
• Invalidation of unpaid past dues: Unpaid or unrecovered dues relating to specified State levies imposed before the amendment will be treated as invalid. This seeks to reduce uncertainty arising from past liabilities and ongoing disputes.
• No refund of amounts already paid: Amounts that have already been deposited or recovered will not be refunded. Thus, the Bill distinguishes between unresolved past liabilities and amounts already collected.
• Greater fiscal predictability: By placing future State levies within a Central framework, the Bill aims to reduce sudden and unpredictable changes in mining costs, thereby improving the viability of long-term mining projects.
• Investment and domestic production: More predictable costs are expected to encourage exploration, mining investment and domestic mineral production, helping reduce dependence on imports and strengthen mineral security.
• States retain a major revenue role: The government has clarified that the Bill does not take away State control over land and minerals or their taxation of minor minerals. Around 90% of mining-related taxes and statutory payments currently accrue to States, and this broad arrangement is intended to continue.

Mines and Minerals (Development and Regulation) Amendment Bill, 2026 Significance 

The amendment is important for reducing the cost of domestic minerals and strengthening India’s mineral security.

• Boosts investment: Greater fiscal certainty can encourage long-term investment in mining.
• Reduces import dependence: Lower and more predictable domestic costs can make Indian minerals more competitive with imports.
• Strengthens Atmanirbhar Bharat: Greater domestic mineral production can reduce dependence on external supplies.
• Supports Viksit Bharat 2047: Minerals are essential for infrastructure, manufacturing, energy and emerging technologies.
• Supports critical mineral security: A stronger domestic mining ecosystem can help secure minerals needed for clean energy, electronics and advanced industries.
• Promotes national market integration: Greater uniformity in mineral-related taxation can reduce regional distortions and improve the efficiency of the mineral market.

Mines and Minerals (Development and Regulation) Amendment Bill, 2026 Key Concerns

The Mines and Minerals (Development and Regulation) Amendment Bill, 2026 also raises significant constitutional and federalism concerns.

• State autonomy: Restricting State taxation powers may weaken the fiscal space available to mineral-rich States.
• Land as a State subject: Parliament’s power over mineral development may not automatically extend to regulating taxation of mineral-bearing land under Entry 49 of the State List.
• Retrospective provisions: Invalidating unpaid past dues could raise constitutional concerns, particularly where such liabilities arose under the existing legal framework.
• Judicial override concerns: The Bill may be questioned if its retrospective provisions effectively neutralise the consequences of the Supreme Court’s 2024 judgment without changing the legal basis of that judgment.
• Article 14 concern: Companies that have already paid their dues will not receive refunds, while those with unpaid dues may receive relief, potentially raising concerns of unequal treatment.
• Excessive delegation: The Bill leaves the Centre significant discretion to prescribe the conditions under which States may impose certain levies, raising questions about excessive delegation of legislative power.

Way Forward

The Mines and Minerals (Development and Regulation) Amendment Bill, 2026 can achieve its objectives if fiscal rationalisation is accompanied by constitutional clarity and cooperative federalism.

• Consult States: Major restrictions on State taxation should be implemented through sustained Centre-State consultation.
• Provide clear rules: The Central Government should prescribe transparent and predictable conditions rather than leave excessive discretion to the executive.
• Respect judicial principles: Implementation should remain consistent with constitutional limits and Supreme Court judgments.
• Protect State revenues: Any rationalisation should ensure that mineral-rich States continue to receive adequate revenues.
• Promote sustainable mining: Greater investment should be accompanied by environmental safeguards, rehabilitation and benefit-sharing with mining-affected communities.
• Strengthen domestic production: Fiscal stability should be combined with faster exploration, technology adoption and development of critical mineral resources.