India Approves New Royalty Rates for Critical Minerals

On November 12, 2025, the Union Cabinet of India, chaired by Prime Minister Narendra Modi, approved the rationalization of royalty rates for four critical minerals: graphite, caesium, rubidium, and zirconium. This decision aims to enhance domestic production, reduce import dependence, and promote the auction of mineral blocks containing these essential resources, which are vital for advanced technological applications and the global energy transition.

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The revised royalty rates are as follows:

Cabinet Approves New Royalty Rates for 4 Critical Minerals

• Graphite: 2% of the average sale price (ASP) for ore with 80% or more fixed carbon content, and 4% for lower-grade graphite.

Cabinet Approves Rationalisation of Royalty Rates for four Critical Minerals

• Caesium: 2% of ASP.

Cabinet Approves Rationalisation of Royalty Rates for four Critical Minerals

• Rubidium: 2% of ASP.

Cabinet Approves Rationalisation of Royalty Rates for four Critical Minerals

• Zirconium: 1% of ASP.

Cabinet Approves Rationalisation of Royalty Rates for four Critical Minerals

This shift from a per-tonne basis to an ad valorem basis for graphite is intended to better reflect market price variations across different grades, aligning India's royalty structure with international norms.

Cabinet Approves Rationalisation of Royalty Rates for four Critical Minerals

Graphite, caesium, rubidium, and zirconium are classified as critical minerals due to their essential roles in high-tech applications and energy transformation. Graphite is particularly significant as it serves as an anode material in electric vehicle (EV) batteries, with India currently importing about 60% of its graphite needs. Zirconium is utilized in various industries, including nuclear energy and aerospace, due to its corrosion resistance and high-temperature stability. Caesium is primarily used in advanced electronics, while rubidium finds applications in fiber optics and telecommunications.

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The Cabinet's decision is anticipated to incentivize the auction and production of mineral blocks, thereby unlocking associated critical minerals such as lithium, tungsten, and rare earth elements. The government expects this move to generate employment opportunities, strengthen local supply chains, and enhance India's energy security.

Cabinet Approves Lower Royalties on Critical Minerals to Boost Domestic Production and Jobs

While the government promotes this initiative as a means to boost domestic production and reduce imports, some critics argue that the effectiveness of these measures remains to be seen. Concerns have been raised regarding the actual implementation of the auction process and whether it will attract sufficient investment to meet India's growing demand for these minerals.

India Takes Steps to Enhance Critical Minerals Production as Cabinet Approves Royalty Rate Adjustments

Information and Broadcasting Minister Ashwini Vaishnaw stated that high royalty rates previously discouraged domestic production. He emphasized that the new rates are designed to encourage exploration and mining, thereby supporting strategic sectors such as electric vehicles and electronics.

Cabinet Approves Lower Royalties on Critical Minerals to Boost Domestic Production and Jobs

The government has announced the Sixth Tranche auction of critical mineral blocks, which includes five graphite blocks, two rubidium blocks, and one block each of caesium and zirconium. This auction is expected to facilitate a competitive bidding process, allowing for reasonable financial offers from potential bidders. The Geological Survey of India (GSI) and the Mineral Exploration Corporation Limited (MECL) are preparing additional blocks for future auctions, indicating a proactive approach to enhancing mineral production in India.

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• “The decision of the Union Cabinet will promote auction of mineral blocks containing caesium, rubidium and zirconium, thereby not only unlocking these minerals but also associated critical minerals found with them, such as lithium, tungsten, REES, niobium etc,” — Official Statement

Cabinet okays royalty rate rationalisation for 4 critical minerals

• “These minerals are crucial for high-tech applications and strategic sectors, especially electric vehicles (EVs), electronic manufacturing, and energy transition,” — Ashwini Vaishnaw, Information and Broadcasting Minister

Cabinet Approves Lower Royalties on Critical Minerals to Boost Domestic Production and Jobs

This strategic move by the Indian government reflects its commitment to enhancing self-reliance in critical minerals, crucial for the country's economic growth and technological advancement.

Cabinet Approves Lower Royalties on Critical Minerals to Boost Domestic Production and Jobs