Budget reforms to enhance competitiveness of critical minerals: Industry

The mining reforms introduced in the Union Budget will have a transformative impact and will enhance the competitiveness of India's critical minerals sector, industry players said.

In her Budget speech, Union Finance Minister Nirmala Sitharaman said that a policy for recovery of critical minerals from tailings or by-products of mining will be launched.

Sitharaman also said that mining sector reforms, including those for minor minerals, will be encouraged through the sharing of best practices and the institution of a State Mining Index.

Additionally, the finance minister announced the removal of import duty on 12 critical minerals, cobalt powder and waste, lithium-ion battery scrap, lead and zinc.

The sharing of best practices and institutionalising a State Mining Index for minor minerals along with a policy for recovery of critical minerals from tailings will enable circularity and innovation within the industry, Hindustan Zinc Ltd CEO Arun Misra said.

As the country transitions to a low-carbon economy, these minerals will play a pivotal role, with metals forming the foundation of this shift, he said.

"As India's largest and the world's second-largest integrated zinc-lead producer, we are optimistic about the transformative impact of these initiatives which will enhance the competitiveness of India's critical minerals sector while supporting industries such as electric vehicle manufacturing and renewable energy storage," Misra added.

The government's decision to further expand the customs duty waiver to include 12 additional critical minerals, along with the exemption on lithium scrap and cobalt waste, is a significant step in ensuring the availability of these essential resources, Rakesh Surana, Partner, Deloitte India said.

This move will provide a major boost to the MSME and manufacturing sectors, enhancing supply chains and strengthening India's path towards self-reliance.

It aligns with the broader vision of Aatmanirbhar Bharat and complements the recently announced National Critical Minerals Mission. By fostering a robust ecosystem for critical minerals, this initiative will drive long-term growth and sustainability in the sector, Surana said.

Vedanta Chairman Anil Agarwal expressed his delight over mining being identified as one six domains for transformational reforms over the next five years.

"Mining, agriculture, manufacturing (including electronics, which is a thrust area for the government) can all help increase domestic production, reduce imports and create millions of good jobs in India," he said.

In the last budget, the government had scrapped customs duty on 25 critical minerals that are not available in the domestic market.

She had also reduced basic customs duty on two other such minerals to provide a fillip to their processing, especially by MSMEs.