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Our Rich Mineral State

Investment Policy

Investment Incentives

Opportunities in India's Mining Sector



Facts & Figures
Investment Incentives

The government offers a wide range of concessions to investors in India, engaged in mining activity. The main concessions include:
    Direct Taxes:
  • Mining entities in specified backward areas are eligible for a complete tax holiday for a period of 5 years from commencement of production and a partial tax holiday thereafter.
  • Environment protection equipment, pollution control equipment, energy saving equipment and certain other equipment eligible for 100% depreciation.
  • One fifth of the expenditure on prospecting or extracting or production of certain minerals during 5 years ending with the first year of commercial production is allowed as a deduction from the total income.
  • Export profits are eligible for the concessions under the Income Tax Act.

    Indirect Taxes:
  • Minerals in their finished form exempt from excise duty.
  • Low customs duty on capital equipment used for minerals; on nickel, tin, pig iron, unwrought aluminium.
  • Capital goods imported for mining under EPCG scheme qualifies for concessional customs duty subject to certain export obligations.
  • Capital goods imported for mining under EPCG scheme qualifies for concessional customs duty subject to certain export obligations.

    Financial support for Mining:
    Innovative financing schemes like metal loans, mezzanine financing, etc. designed for foreign firms and JV companies.

    Large Area Prospecting:
    To boost exploration and detailed prospecting of high value and scarce minerals, the area for prospecting has been increased from 25sq.km to 5,000 sq.km for a single lincence, and 10,000 sq.km for aerial prospecting.

    Institutional Framework:
  • The Ministry of Mines regulates and promotes the activities of mining in the country and is responsible for:
  • Surveys and exploration of all the minerals, other than coal, natural gas, petroleum and atomic minerals.
  • Mining and metallurgy of non-ferrous metals like aluminium, copper, zinc, lead, gold, nickel.
  • Providing administration for prospecting and mining laws.
  • The MMRD Act and the Mines Act which constitute the basic laws governing the mining sector are promulgated by the Central Govt. The relevant rules in force under the MMRD Act are the Mineral Concessional Rules, 1960, outlining the procedures and conditions for obtaining a prospecting licence or a mining lease, and the Mineral Conservation and Development Rules, 1988 that lay down the guidelines for ensuring mining on a scientific basis and without environment degradation. All the major minerals come under the purview of the Central Govt.. Minor minerals are separately notified and come under the purview of State Govts. Who have formulated Mineral Concessional Rules for this purpose.
  • In the federal structure, the State Government is the owner of minerals in their respective territorial jurisdiction. In offshore areas, exclusive economic zone and the continental shelf, the rights are vested in the Central Govt.
  • High quality geological databases have been generated by national agencies like the Geological Survey of India, Mineral Exploration Corporation, National Remote Sensing Agency, National Geophysical Research Institute and Indian Bureau of Mines. This database is accessible on a commercial basis and makes investment in mining exploration in India a low-risk investment proposition. In addition to the above, there exists a Federation of Mining Industries (FIMI) which is an association of all those engaged in the business of mining. FIMI from time to time suggests to the Govt. desired changes in the prevailing mining policy that would facilitate improved activities in the sector.
Copyright © 2006 Bharat Mining Company.
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