The NITI Aayog has said social and environmental safeguards must be retained and exploration regimes rebalanced in the mining sector, including through conditional first-come, first-served (FCFS) mechanisms for early-stage exploration of priority critical minerals required for the energy transition.
This, the think tank said, must be done through clearly defined milestones, data disclosure and rights-based progression.
India’s current mining framework exempts critical mineral projects from public consultation at the exploration stage, while exploration licences (ELs) are awarded through auctions.
In its report, Scenarios towards Viksit Bharat and Net Zero: Critical Mineral Assessment — Demand and Supply, the Aayog warns that accelerating the supply of critical minerals for India’s energy transition must not come at the cost of environmental and social accountability. Weak governance, it cautions, could ultimately delay projects and disrupt supply chains.
Under the existing regulatory framework, mining projects involving critical, strategic, and atomic minerals are exempt from public consultation under the environmental impact assessment process. The exemption, notified by the Ministry of Environment, Forest and Climate Change in September 2025, allows such projects to be appraised directly at the central level without public hearings, citing strategic and national interest considerations.
Against this backdrop, the Aayog explicitly calls for retaining public consultation while fast-tracking critical mineral projects. The report frames public consultation as a risk-screening mechanism, arguing that early identification of social, environmental, and legal risks can help prevent litigation, community opposition, and project delays.
Alongside governance safeguards, the report devotes considerable attention to reforming exploration and licensing regimes.
India’s mineral allocation framework was overhauled in 2015, when amendments to the Mines and Minerals (Development and Regulation) Act, 1957, replaced the FCFS system with competitive auctions to improve transparency and curb discretion.
Between 2015 and 2024, 554 mineral blocks were auctioned, but only 66 mines had reached production as of August 9, 2025. The report observes that the auction system has also led to aggressive bidding in some cases, with bids exceeding 100 per cent of the assessed mineral value, raising concerns about cost inflation in downstream industries.
In 2023, further amendments introduced a new concession — the EL — to promote exploration of deepsea and critical minerals. ELs are awarded through auctions. However, the report flags structural issues that disincentivise participation. Under current rules, exploration companies receive revenue only after a discovered resource is auctioned and developed — an outcome that can take years, if it materialises at all.
Explorers are entitled only to a share of the final auction premium, the value of which is unknown at the exploration stage. Unlike in several other jurisdictions, ELs in India do not confer mining rights, weakening incentives for private participation.
The impact is reflected in auction outcomes. Since their introduction, several states have failed to successfully auction ELs, prompting the Centre to take over the process in late 2024. Of the 13 EL blocks auctioned in the first tranche in March 2025, only seven were successfully concluded. “These outcomes underline the persistence of discovery-stage constraints and the limited appetite for exploration under current risk/reward structures,” the report notes.
In light of this, the Aayog has recommended introducing conditional FCFS access for early-stage exploration, with milestones, data disclosure, and rights-based progression, while retaining auctions for downstream mining allocation. The report positions both public consultation and exploration design as central to building a resilient critical mineral ecosystem.
 "Rethink auctions, retain safeguards: NITI Aayog on critical minerals")
