India's Mineral Exploration Stalled by Policy Hurdles and Financing Gaps
India's mineral exploration has hit a snag, with private sector involvement at a near standstill due to insufficient incentives, financing issues, and technological skill gaps. Despite offering seamless licensing regimes in key mining geographies, the current policy hinders progress.
The current policy allows only Non-Exclusive Reconnaissance Permits (NERPs) for exploration, without preferential treatment for mining lease allotment. This leaves exploration companies with limited financial returns, despite receiving a share of the royalty from mining lease holders. To boost mobile exploration, India must enable a seamless transition from exploration to mining for private companies and permit license sales at any stage.
The mineral industry, a critical growth driver for India's economy, contributed around 2.2 per cent of GDP in 2018-19. However, this is a decline from the 3 per cent contribution in 2011-12. With only 10 per cent of India's area explored for minerals, there's vast untapped potential. Adequate financing for exploration is crucial, and adopting international practices could help boost mobile exploration efforts.
India's mineral industry faces challenges that hinder private sector involvement and exploration. To achieve its target of a US$5 trillion economy by 2024-25, India must address these issues, promote exploration, and harness the full potential of its mineral resources.
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