MMDR Amendment Bill 2026 Passed for Mineral Sector Stability
The Mines and Minerals (Development and Regulation) Amendment Bill, 2026 was passed by both Houses of Parliament on 13th August 2026, amending the MMDR Act of 1957 to bring long-term stability to the major minerals sector. The amendment specifically preserves all state rights concerning land and minerals, including their authority to collect taxes on minerals, with approximately 90% of total taxes and statutory payments in mining continuing to accrue to states. This fiscal arrangement remains unchanged post-amendment, and states retain their power to regulate and impose taxes on minor minerals.
The amendment aims to provide certainty, stability, and predictability in the mineral sector's fiscal regime to stimulate increased mining investment, supporting the objectives of Atmanirbhar Bharat and the Viksit Bharat 2047 vision. Minerals are critical for infrastructure, manufacturing, energy security, and economic development, with India importing minerals worth ₹10,12,529 crores in FY 2025-26. The government notes that unbalanced imposition of steep taxes could prompt industry reliance on imported minerals, burdening the exchequer.
States currently levy around 14 types of taxes, charges, fees, and other levies on mining operations, including royalty, auction premium, dead rent, contributions to the District Mineral Foundation (DMF), Goods and Service Tax (GST), and transit fees. From FY 2015-16 to FY 2025-26, major mining states received over ₹5 lakh crores in total revenue, while the Centre received only ₹82,000 crores during the same period. Since the introduction of the auction regime in 2015, states have gained an additional revenue source through auction premiums, with major mining states collecting more than ₹96 thousand crores in premiums from 2020-21 to 2025-26, alongside other revenue streams like royalty, DMF, and GST.
The amendment addresses the need for a cohesive national strategy for mineral management, as resources are finite and geographically concentrated in few states. Unchecked regional disparities in state-level taxation could disrupt economic growth by inflating domestic costs, making domestic minerals uncompetitive, incentivizing unnecessary foreign imports despite abundant local reserves, and fragmenting the national market.