India Introduces Bill to Limit State Mining Taxes

The Government of India introduced a bill in Parliament to limit the power of state governments to regulate or tax mineral rights and ore-bearing land. The legislation seeks to establish uniform rules across the country and grant the central government authority to set conditions and limits on levies imposed by regional authorities.

New Delhi argues that disproportionate regional taxes hinder investment and increase operational costs. Officials warned that such taxes create a risk of an increase in imports of minerals despite having sufficient local mineral resources as domestic mineral supply becomes expensive.

This legislative move follows a 2024 Supreme Court of India ruling that upheld the rights of states to impose levies on mining in addition to royalties. The proposal is expected to increase friction between the central government and mineral-rich states, following previous tensions caused by a federal cut in consumption taxes last year.