Untapped mines could save India $100 bn in imports annually: CSEP study

Policy hurdles, high royalties and red tape keeping global explorers away, warns report

India could save over $100 billion every year in import bills if it develops its domestic mineral resources instead of relying on foreign supplies, according to a new report by the Centre for Social and Economic Progress (CSEP).

 

The discussion paper, “India’s Mineral Requirements in a World of Economic and Geopolitical Transition,” argues that “sourcing more minerals within the country can save over $100 billion in imports every year,” while also creating large-scale employment and boosting industrial growth.

 

Despite its rich geology, India has explored only 30 per cent of its known potential, the report notes. The mining sector contributes just 2 per cent to the GDP, compared to 7.5–12 per cent in countries such as Australia and South Africa. The report points out that India’s policy environment has discouraged exploration companies from investing.

 

Exploration firms are unwilling to risk capital because they cannot commercially exploit discoveries, as India only allows allocation of mining leases through auctions. The system, the report says, “does not adequately attract explorers.”

 

Further, high taxes and royalties, permitting delays, land acquisition problems, and duplication of environmental clearances, coupled with anti-mining activism by organised groups, have added to investor reluctance. “These challenges have made mining giants hesitant to work in India,” the paper notes.

 

Imports of minerals and metals had cost India $157 billion in 2022, forming nearly a quarter of the country's total imports. For four critical minerals – copper, nickel, lithium, and cobalt – needed for renewable energy, India is 93–100 per cent dependent on imports, amounting to $4 billion annually.

 

To reverse this, the report recommends establishing a National Critical Mineral Stockpile to safeguard against global supply shocks, and reforming exploration policies through an Exploration and Production (E&P) licensing model to attract private investment.

 

On the external front, the report warns that “exchanging dependence on OPEC for oil with China for critical minerals is a recipe for disaster.” It calls for empowering Khanij Bidesh India Ltd (KABIL) to proactively acquire and develop strategic mineral assets abroad and for India to use its membership in the Mineral Security Partnership (MSP) to strengthen global supply chains.