Cabinet Approves New Royalty Rates for 4 Critical Minerals

14.11.2025

Cabinet Approves New Royalty Rates for 4 Critical Minerals

Context

In November 2025, the Union Cabinet rationalised royalty rates for Graphite, Caesium, Rubidium, and Zirconium to boost domestic mining, cut import dependence, and support India’s green energy and strategic sector needs.

About the News

What is Royalty Rate?

A government levy on mineral extraction, charged as a percentage of Average Sale Price (ASP) or fixed per tonne under the MMDR Act, 1957 and Mineral Concession Rules, 1960.

Key Features of the Decision

• Graphite: Shifted to ad valorem—2% for ≥80% carbon, 4% for <80% carbon, replacing the earlier flat per-tonne rate.
   
• Caesium & Rubidium: 2% royalty on metal value extracted.
   
• Zirconium: 1% royalty on metal value.
   
• Aligns India’s 1–4% rates with global standards, improving transparency, value capture, and investor confidence.
   
• Facilitates easier auctioning and exploration of mineral blocks, including associated rare earths and lithium.
   

Significance

• Reduces high import dependency, especially 60% for graphite.
   
• Supports EV batteries, nuclear components, fiber optics, and other clean-tech industries.
   
• Advances Atmanirbhar Bharat via improved resource security and supply chain stability.
   
• Helps counter global supply risks, especially China’s dominance in critical minerals.
   

Legal and Regulatory Background

The MMDR Act authorises the Centre to revise royalty rates to match market dynamics and strategic priorities, enabling a competitive, investment-friendly, and sustainable mining ecosystem.

Conclusion

The revised royalty rates strengthen domestic production, attract investment, and secure essential raw materials for India’s energy transition and advanced technologies. This policy boosts India’s long-term strategic autonomy and resilience in critical mineral supply chains.