India's Mineral Wealth: US$5 Trillion Economy Barrier
India's mineral wealth remains largely untapped, with only 10% of the country's area explored for minerals. This under-exploration is a barrier to achieving the goal of a US$5 trillion economy by 2024-25, as the minerals and mining industry plays a crucial role in economic growth.
Vedanta Resources and Sterlite Industries have paused mineral exploration in India due to environmental concerns, regulatory hurdles, and local resistance. To boost exploration, India must allow a smooth transition from exploration to mining for private companies and permit license sales at any stage. Currently, private companies can only explore through a Non-Exclusive Reconnaissance Permit (NERP), with no preferential mining lease allotment.
The mineral industry's contribution to GDP has decreased from 3% in 2011-12 to 2.2% in 2018-19. Reducing mineral imports, which were around Rs 1.3 trillion in 2016-17, could help lower the trade deficit. India's rich mineral reserves hold significant growth potential for the mining industry.
To unlock India's mineral wealth, the government should address the challenges faced by private companies in exploration, such as inadequate incentives, financing, and technology. Key mining geographies with seamless licensing regimes can attract 'junior explorers' and facilitate the sale of exploration data and mining rights to larger companies. This could help increase the mineral industry's contribution to GDP and reduce the trade deficit.
