In a significant move to strengthen India's mineral security, the Union Cabinet has given its approval for new royalty rates on several critical minerals. The decision, announced on November 12, 2025, aims to boost domestic production of essential minerals while reducing the country's dependence on imports.
New Royalty Structure for Critical Minerals
The cabinet has established a clear royalty framework for four crucial minerals that are vital for various high-tech industries. Caesium and rubidium will each attract a 2% royalty based on the average sale price of the respective metal contained in the ore produced. Meanwhile, zirconium will have a lower royalty rate of 1% of the average sale price, while graphite will be charged 2% of ASP.
Strategic Importance of the Decision
This policy revision comes at a crucial time when India is seeking to enhance its self-reliance in mineral resources. Critical minerals like caesium, rubidium, zirconium, and graphite play essential roles in numerous advanced technologies including electronics, aerospace, renewable energy systems, and defense applications. The new royalty structure is designed to make mineral extraction more economically viable for mining companies while ensuring fair returns for the government.
Expected Impact on Domestic Production
Industry experts believe the revised royalty rates will stimulate investment in the mining sector and encourage exploration activities. By establishing predictable and reasonable royalty charges, the government aims to create a more favorable environment for domestic mineral production. This initiative aligns with India's broader strategy to secure its supply chains for critical minerals and reduce vulnerability to international market fluctuations and geopolitical tensions.
The timing of this announcement, coming in the latter part of 2025, indicates the government's commitment to addressing mineral security as a national priority. The move is expected to have long-term positive effects on India's industrial growth and technological advancement across multiple sectors.
