NITI Aayog's Recommendations for the Mining Sector

The NITI Aayog emphasizes the importance of maintaining social and environmental safeguards in the mining sector while rebalancing exploration regimes. This includes implementing conditional first-come, first-served (FCFS) mechanisms for early-stage exploration of priority critical minerals necessary for the energy transition.

Current Mining Framework and Challenges

• India's existing mining framework exempts critical mineral projects from public consultation during the exploration phase.
• Exploration licenses (ELs) are allocated through auctions, but only 66 out of 554 auctioned mineral blocks have reached production as of August 9, 2025.
• There are concerns about aggressive bidding and cost inflation in downstream industries, with some bids exceeding 100% of the mineral value.

Recommendations for Governance and Transparency

The NITI Aayog stresses retaining public consultation as a mechanism for identifying social, environmental, and legal risks early, which can prevent litigation and project delays.

Exploration and Licensing Regime Reforms

• The need for reforms in the exploration and licensing regimes is highlighted, with a focus on encouraging private participation and reducing discovery-stage constraints.
• Exploration companies currently receive revenue only once a discovered resource is auctioned and developed, a process that can take years.
• India's ELs do not grant mining rights, unlike in other jurisdictions, which discourages private exploration activities.

Introduction of Conditional FCFS Access

NITI Aayog recommends the introduction of conditional FCFS access for early-stage exploration with clear milestones, data disclosure, and rights-based progression, while retaining auctions for downstream mining allocation.

Conclusion

The report positions both public consultation and exploration design as central to building a resilient critical mineral ecosystem, ensuring environmental and social accountability alongside economic growth.