New Delhi: India’s newly implemented Mines and Minerals (Development and Regulation) Amendment Act, 2026 aims to bring greater uniformity and predictability to taxation in the mining sector, addressing concerns over multiple state-level levies and uncertainty surrounding mineral-related taxes.
The legislation comes after the Supreme Court’s 2024 ruling that recognised the power of states to impose taxes on mineral rights and mineral-bearing lands. The subsequent move by some states to introduce additional levies raised concerns among mining companies and industry bodies about rising costs and the financial viability of mining projects.
Focus on Tax Certainty
The new framework seeks to standardise the taxation structure and limit uncertainty arising from different levies imposed by individual states. Industry experts believe greater predictability could make it easier for mining companies to assess project costs, plan investments and secure financing for long-term projects.
The reform is particularly significant for capital-intensive mining operations, where unexpected taxes or retrospective financial liabilities can substantially affect project economics. Greater fiscal clarity could also support investment in critical minerals and other resources needed for India’s manufacturing and energy-transition ambitions.
States Raise Federalism Concerns
While the mining industry has welcomed greater clarity, the legislation has also triggered opposition from several states. Critics argue that restricting states’ ability to tax mineral resources could reduce their revenue and weaken their fiscal autonomy.
Congress-ruled states have indicated that they may challenge the amended mining law in the Supreme Court, arguing that it affects the constitutional powers of states over mineral taxation.
Impact on Mining Industry
The new law is expected to provide mining companies with a more predictable regulatory and taxation environment. This could be particularly important for new investments in iron ore, coal, bauxite, critical minerals and other strategic resources.
However, the debate over the distribution of mining revenues between the Centre and states is likely to continue. The legislation therefore represents not only a change in mining taxation but also a significant development in India’s broader Centre-state fiscal relationship.