India’s Mining Bill Promises States 90%. Here’s The Catch

By Dev Chandrasekhar

Two years ago, a nine-judge bench of the Supreme Court closed a fight over mining taxes that had run since 1989. States, it ruled, can tax mineral rights and mineral-bearing land. Delhi cannot take that power away except by saying so expressly in law.

Towards that, last week, Parliament passed the MMDR Amendment Bill, 2026, set to become law after the President's assent.

Who Gets To Tax?

The old fight was about royalty, the fee a miner pays a state for the right to dig. 

In 1989, the Supreme Court's India Cement ruling treated royalty as a tax, which meant only Parliament could touch it. States spent three decades arguing they had a separate, older power to tax mineral-bearing land itself, not the royalty on it.

In July 2024, a nine-judge bench settled it by an eight-to-one majority. Royalty, it ruled, is not a tax but a contractual payment. 

States can therefore tax mineral rights and mineral-bearing land under their own constitutional powers, unless Parliament has explicitly stepped in to restrict them. The mining law in force, the court noted, had imposed no such restriction.

A follow-up order let states chase the money retrospectively, back to April 2005, paid out over twelve years starting this April.

For Odisha, Jharkhand and Chhattisgarh, it amounted to a windfall, albeit one arriving nearly two decades late.

The dispute comes down to three competing powers, all set out in the Constitution’s Seventh Schedule, which divides legislative powers between the Centre and the states.

Entry 50, in the State List, is titled "taxes on mineral rights". It lets a state tax the right to mine, the licence, subject to any limits Parliament sets by law. Entry 49, also in the State List, is titled "taxes on lands and buildings”.  

It lets a state tax land, any land, mineral-bearing land included. Entry 54, in the Union List, is titled "regulation of mines and mineral development”. It lets Parliament regulate mining itself and, if it says so clearly, cap what states can do under Entry 50.

The 2024 judgment accepted that all three could coexist. What it rejected was the idea that the Centre could use its power to regulate mining under Entry 54 to effectively erase the states’ separate power to tax land under Entry 49. Delhi, in other words, could not create a fourth constitutional power for itself simply by legislating under one it already had.

​​The Bill That Talks Back

The Mines and Minerals (Development and Regulation) Amendment Bill, 2026, cleared both Houses on 13 August and now awaits the President's signature.  

The bill would extend the Centre’s control beyond mines to “mineral-bearing land,” a term whose parameters Delhi will define later. More consequentially, it inserts a new Section 9D that bars states from taxing mineral rights or mineral-bearing land — whatever form the levy takes — unless the Centre’s rules permit it.

That has an immediate consequence. Any state levy not collected before the law takes effect would become void. Money already collected stays with the state. Money that has been assessed but not collected could disappear.

States are already pushing back. 

Chief Minister Hemant Soren has written to the Prime Minister, flagging that mining brought in 84.9% of the state's non-tax revenue in FY25, and that its Mineral Bearing Land Cess, just two years old, was on track to raise Rs 11,000 crore a year.

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5.4%

That's how much India's core infrastructure output expanded year-on-year in July, slowing slightly from a revised 6% growth in June, government data showed. For April-July, cumulative infrastructure output grew 4.3%, up from 1.5% a year earlier.

Context: The figures mark the second release under a revised series that shifts the base year to 2022-23 from 2011-12 and expands the sector basket to nine industries, adding iron ore, as growth in iron ore and electricity output moderated.

Catch Up Quick: Among the sectors, cement output rose sharply by 13.1%, up from 9.9% in June, while coal production accelerated to 7.6% growth from 1.4%. Iron ore output climbed 29.5%, though slower than June's 44.5% rise.

Steel (2.9%) and electricity (9%) generation growth eased, while crude oil (-5.3%), natural gas (-3.7%) and fertiliser (-8%) output all contracted. Refinery products rebounded 2.7% after a June decline.

Venezuela To The Rescue

India imported 4,44,000 barrels of crude oil per day from Venezuela in August, making the South American country its fourth-largest supplier. Venezuela’s position in India’s supply mix has risen rapidly since the country resumed imports in April.

Russia remains India’s largest supplier, with shipments at close to 2 million barrels per day in August. But Indian refiners are increasingly turning to Venezuela, Brazil and African producers as disruptions in West Asia threaten traditional supply routes.

How We Got Here: West Asian suppliers accounted for about 30% of India’s crude imports between April and July, down from 43% a year earlier. Meanwhile, Latin American suppliers’ share rose to 12.7% from 3.5%.

Critical Moment: The shift away from West Asia is helping India keep its refineries supplied, but it comes at a cost. Gulf producers are much closer to India than suppliers such as Venezuela, the US and West Africa. Longer voyages can increase freight and insurance costs, potentially raising India’s oil import bill even if refiners secure enough crude.

RBI Chases Dollar Inflows

The Reserve Bank of India (RBI) expects its measures to support the rupee and attract at least $80 billion in foreign-currency inflows, Governor Sanjay Malhotra told the Financial Express. The RBI launched the measures in June to boost dollar liquidity, strengthen forex reserves and ease pressure on the rupee amid strong dollar demand and global uncertainty.

Origin: The RBI offered banks incentives to attract foreign-currency deposits from non-resident Indians (NRIs) and encouraged them to raise foreign currency through other channels. The measures have already attracted nearly $57 billion, including $52.3 billion through FCNR(B) deposits. The strong response prompted the RBI to bring forward the closure of the FCNR(B) deposit window to August 31 from September 30.

Pivot: The inflows give Indian banks greater access to dollars and strengthen the country’s external buffers. However, the rupee remains under pressure and closed at Rs 95.70 to the US dollar on Thursday, with the RBI reportedly intervening in the forex market to limit further losses.

India Curbs Sugar Stockpiling

India has capped how much sugar bulk consumers can stock at 15 days and opened the door to duty-free imports of 1 million metric tonnes, its first such move in nearly a decade, as the government tries to cool record-high prices ahead of the festival season.

Despite an earlier 30-day stock cap imposed just last month, sugar prices have still jumped 10% over the past month to a record high, Reuters reported.

Background: India is the world's biggest sugar consumer, and demand typically rises sharply between August and November as major festivals, Ganesh Chaturthi, Dussehra and Diwali, drive bulk buyers like biscuit and confectionery makers to stock up ahead of the season.

This year, patchy rains and dry weather have hit the sugarcane crop, which needs large amounts of water to grow, tightening supplies further.

Forecast: Prices are expected to stay elevated for at least the next three months as supplies remain tight and festival demand picks up.

The government's back-to-back stock limit orders signal growing urgency, but so far the measures have not been enough to cool prices.

Delhi's New Vehicle Ban

Starting January 1, 2027, Delhi will no longer allow new registrations of petrol, diesel and CNG light goods vehicles weighing up to 3.5 tonnes, the Commission for Air Quality Management (CAQM) has announced.

The order goes beyond Delhi's new Electric Vehicle Policy as it also bans non-electric LGVs of 3.5- 7.5 tonnes category from 2028. It will affect manufacturers like Tata Motors, Mahindra, Ashok Leyland, Maruti Suzuki and VE Commercial Vehicles.

The Lead: Restrictions will roll out in phases across Delhi-NCR through 2029. CNG vehicles will be allowed for a longer timeframe in areas with weaker charging infrastructure.

CAQM said these vehicles cause much more pollution than their small numbers suggest. It also questioned CNG's clean fuel credentials and criticised it as not being as clean as believed, since it still creates harmful gases.

The Shift: The Commission urged strict enforcement by Delhi and NCR state governments, backed by central EV-transition schemes.

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Will Indian Markets Hold Their Gains As US Treasury Yields Rise?

On Episode 954 of The Core Report, financial journalist Govindraj Ethiraj talks to Atul Chaturvedi, Director at Shree Renuka Sugars as well as Umesh Sharma, Chief Investment Officer - Debt at The Wealth Company Mutual Fund.

• Will Indian Markets Hold Their Gains As US Treasury Yields Rise?

• Did The Government Fail To Anticipate A Sugar Shortage, Leading To Prices Jumping And Imports Opened Up?

• The US Treasury Is Openly Intervening In Bond Markets, Even As Gross US Debt Crosses $40 Trillion

• What China’s Humanoid Robots Can And Cannot Do

• The Rise And Fall Of Asia’s Second Richest Man As Chinese Real Estate Tycoon And Founder Of Evergrande Is Sentenced To Life In Prison