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The Union government is preparing a confidential fast-track framework to compress approvals and crowd in private capital for critical minerals, even as it scales up publicly funded exploration and deepens talks with partners such as Canada, top officials and industry executives said on February 19.
At a critical minerals conference organised by FICCI, G Kishan Reddy, union minister of mines and coal, said the Centre has moved to de-risk early-stage exploration by providing 100 per cent government funding to 41 notified private exploration agencies through the National Mineral Exploration Trust (NMET). “For the first time, 41 private agencies have been given full funding to undertake exploration. We are also supporting start-ups with 100 per cent funding to begin exploration activities,” he said.
More than 200 projects have already been financed, he added, while calling for cost incentives to reduce high exploration risk and long gestation periods.
Reddy informed that the government is working on a single-window clearance mechanism for critical mineral blocks, along with a pre-approved environmental baseline data bank to cut permitting time. A proposal to create a Strategic Minerals Project Monitoring Group, modelled on fast-track infrastructure mechanisms, is also under discussion, one senior official said on condition of anonymity.
In parallel, the mines ministry is examining a framework to mandate time-bound conversion of G3/G4 reconnaissance data into G1/G2 categories, backed by viability-linked incentives for private explorers. Industry executives say this is crucial to make auctioned blocks bankable.
“Access to high-quality geological data remains a bottleneck. Most of our data is still at G3 and G4 level; we need extensive exploration to upgrade it,” said Kishore S, senior member FICCI Taskforce on critical minerals and COO of Hindustan Zinc Limited at the conference, adding that exploration globally requires billions of dollars annually and India must “catch up in the next decade.”
While the Centre has granted 100 per cent import duty exemption on 24 critical minerals, officials acknowledged this is a short-term measure. “Domestic processing and refining capacity must be strengthened so India does not remain a raw material exporter,” Reddy said.
The government has earmarked Rs 7,280 crore under a production-linked incentive scheme for mineral processing and is supporting rare earth processing facilities in Odisha, Andhra Pradesh and Tamil Nadu. Research institutions have been tasked with assessing recovery of rare earth elements from mine tailings and even coal ash. “We are seeing positive results from testing mine waste and ash for rare earth content,” the minister said.
At the same event, Ed Jager, responsible for Canada’s trade and investment programme across India, said Ottawa is updating its 2022 critical minerals strategy to expand domestic production, protect economic sovereignty and build resilient value chains with allies.
Canada has allocated $2 billion to a Critical Minerals Sovereign Fund and is willing to match Indian investment in Canadian projects, Jager said. “If there was Indian investment in Canada, our Natural Resources Minister indicated a willingness to match that from the sovereign fund,” he noted.
Canadian mining companies hold over $336 billion in global exploration and mining assets, and Canada exported more than $2 billion worth of minerals and metals to India in 2024, led by potash and copper.
Despite policy momentum, structural hurdles remain: high capital intensity, long gestation periods, complex geology compared to bulk minerals, limited domestic refining capacity and fragile global supply chains.
Industry executives warn that without assured downstream demand, particularly from battery, electronics and defence manufacturing, investors may remain cautious. Financing remains another choke point, with banks wary of early-stage geological risk.
“Critical minerals cannot succeed through isolated effort. It requires collaboration between government, industry, financiers and global partners,” Hindustan Zinc’s Kishore said.
With geopolitical competition intensifying and demand for lithium, cobalt, nickel and rare earths surging, India’s next move, shifting from policy announcements to time-bound execution, will determine whether it can secure resilient supply chains for its clean energy and industrial ambitions.