India is set for a major overhaul of the mining sector following the introduction of a new Act earlier this month. NMDC Chairman and Managing Director Amitava Mukherjee dubbed the Mines and Minerals (Development and Regulation) Amendment Act of 2026 a “landmark reform”— noting that it would address long-standing operational bottlenecks and unlock investments.

But the Act, which seeks to restrict states’ powers to levy taxes on mineral rights and mineral-bearing lands, has also faced heavy pushback from Opposition parties.

A key objective of the amendment is to restrict states’ powers to levy taxes on mineral rights and mineral-bearing lands. Over the years, mining companies have faced a patchwork of state-level levies, including non-uniform taxes and unexpected cesses, which increased the cost of mineral extraction and created uncertainty for project planning and investment.

Mukherjee, who also chairs the Federation of Indian Chambers of Commerce and Industry (FICCI) Mining Committee, said the amendments “directly resolve long-standing operational bottlenecks by curbing non-uniform state taxes and unexpected cesses that burdened mineral extraction”.

He noted that these charges had increased the financial burden on mining operations and made it difficult for companies to forecast costs and returns over the life of a mine.

By bringing greater uniformity to the taxation and levy framework, the Act aims to reduce arbitrary or divergent state-level demands and create a more stable fiscal environment for miners. This is expected to lower compliance complexity and reduce the risk of sudden changes in levies that can disrupt ongoing operations.

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Greater certainty to attract fresh capital

According to the NMDC chief, greater certainty in the taxation and levy framework could encourage fresh capital investments in the mining sector. Mining projects are capital-intensive and have long gestation periods, so investors require a predictable policy regime to commit large sums over decades.

“This will unlock capital investments, accelerate exploration of minerals, and make domestic mineral production globally competitive,” Mukherjee said. He added that a more predictable policy environment would help mining companies plan exploration programmes, expand existing mines and develop new deposits with greater confidence.

The reform is particularly important as India seeks to expand domestic mineral production to meet rising demand from sectors such as steel, infrastructure, manufacturing, energy and emerging technologies. Secure and competitive supply of minerals is critical for industries ranging from construction and automotive to renewable energy, defence and advanced electronics.

Structural reforms for a more predictable policy environment

Mukherjee welcomed the government’s efforts to undertake structural reforms in the mining sector, saying the industry would benefit from a more predictable policy environment. He emphasised that the MMDR Amendment Act, 2026 would bring “greater uniformity and predictability” to the sector, which had long been affected by overlapping central and state levies and inconsistent interpretation of mineral-related taxes.

The NMDC chief said the reform would help address operational bottlenecks that have slowed down project implementation and increased costs. By rationalising the levy structure and limiting the scope for ad hoc state-level charges, the Act is expected to improve the ease of doing business in mining and reduce disputes related to taxation and royalties.

“We deeply thank the Government of India for championing this transformative reform,” Mukherjee said, highlighting the significance of the amendment for the long-term health of the mining industry.

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Supporting resource security and industrial growth

The amendment comes at a time when India is focusing on strengthening resource security and reducing dependence on imported minerals. With rapid industrialisation and the push towards clean energy, electric vehicles, defence manufacturing and high-tech industries, the demand for critical minerals such as iron ore, bauxite, copper, nickel, lithium and rare earth elements is expected to rise sharply.

A more stable and uniform regulatory framework can help accelerate exploration and development of domestic mineral resources, ensuring that India’s industrial growth is supported by a reliable supply of raw materials. It can also improve the global competitiveness of Indian minerals by lowering the overall cost burden and reducing regulatory uncertainty.

Industry sees reform as transformative

The mining industry has broadly welcomed the MMDR Amendment Act, 2026 as a transformative reform that addresses core structural issues. By curbing non-uniform state taxes and unexpected cesses, the law seeks to remove one of the major sources of cost volatility and policy risk in the sector.

Mukherjee said the reform would not only benefit large mining companies but also support smaller players who have found it difficult to navigate a complex and inconsistent levy regime. A more predictable environment can also encourage technology adoption, better mine planning and higher productivity, which are essential for making India’s mineral sector globally competitive.

Why the Opposition objects MMDR Act 2026

The Opposition parties and mineral-rich states argue that the MMDR Amendment Act, 2026 curbs their financial and constitutional authority by preventing them from imposing taxes or cesses on mineral rights and mineral-bearing land. They say this weakens the benefit of the Supreme Court’s 2024 ruling that affirmed States’ taxation powers, potentially reducing revenues used for welfare and development.

In Jharkhand, Left parties—including CPI, CPI-M, CPI-ML Liberation, SUCI-C and Forward Bloc—have announced a week-long statewide protest from August 25 to 31, including burning copies of the law and awareness campaigns in villages, blocks and districts. The JMM has also opposed the amendments, with Chief Minister Hemant Soren saying the State will fight them on every democratic and legal forum, arguing that Parliament cannot restrict States’ constitutional taxing powers over land.

Bharatiya Janata Party (BJP) and All Jharkhand Students Union (AJSU) party leaders, however, have dismissed the agitation as political drama. In Odisha, Congress has threatened an economic blockade in mineral-bearing districts, while Biju Janata Dal (BJD) and Congress accuse the Centre of weakening the State’s revenue rights; the BJP counters that the reforms will protect, rather than reduce, Odisha’s mining revenues. Meanwhile,

Congress-ruled Karnataka, Kerala and Telangana are preparing a joint Supreme Court challenge, alleging that the law infringes States’ fiscal autonomy and violates the federal spirit; Congress party is also attempting to bring Jharkhand into the legal challenge.