India says mining tax curbs for states needed to prevent market fragmentation

India's government on Friday said uneven taxes ​on mineral rights ​and mineral-bearing lands raise domestic costs and ​fragment the national market, a day after it passed a bill to curb new state taxes on mining amid ‌protests.

Opposition parties ⁠argue ⁠that the curbs will hurt finances of mineral-rich states.

Here ​are some key details:


The federal government said that unconstrained ​and uneven state taxes make domestic minerals less competitive and encourage unnecessary imports.

On Thursday, India's parliament ​passed the Mines and Minerals (Development ⁠and Regulation) ‌Amendment Bill, which restricts state governments ​from ​imposing new taxes, cesses or other ⁠levies on mineral rights and mineral-bearing lands unless ​permitted under conditions set by the ​federal government.

Late on Thursday, Hemant Soren, chief minister of the eastern Indian state of Jharkhand, urged Prime Minister Narendra Modi to reconsider the bill.

Soren said in a letter posted ‌on X that mining revenue accounted for 84.9% of Jharkhand's non-tax revenue in fiscal ​year ​2024-25.

"Any substantial restriction ⁠on this revenue would directly affect Jharkhand's ability to sustain development, welfare and social-security interventions," he said.

The ​federal government said the bill will not reduce states' rights over land, minerals or mineral taxes, with states continuing to receive about 90% of mining-related taxes and payments.