India wants to build EVs, missiles, and solar parks without constantly leaning on China for raw materials. But this month, that ambition ran into a much more local fight, who actually gets to tax the iron ore, bauxite, and chromite sitting under Indian soil.
On August 13, Parliament passed the Mines and Minerals (Development and Regulation) Amendment Bill-2026. The most notable change is a new Section 9D, which strips states of the power to tax mineral rights or mineral-bearing land unless the Centre specifically permits it. The part causing real anger, though, is quieter: any state levy that had been assessed but not yet actually collected is now treated as if it never existed.
That collides head-on with a landmark 2024 Supreme Court ruling. A nine-judge bench, in an 8:1 verdict, said royalty isn’t a tax at all but a contractual payment, and that states clearly have the right to tax mineral rights since the original 1957 mining law never blocked it. Justice Nagarathna’s lone dissent warned that letting every state set its own cess could spiral into a messy, inconsistent patchwork, and ironically, that’s almost exactly the argument the Centre is now pushing through Parliament after losing it in court. Odisha has the most riding on this. It produces over 40% of India’s minerals and stands to lose around ₹12,000 crore a year, plus more than ₹1 trillion in dues tied to the 2024 verdict’s recovery window, a window that wasn’t even due to open until next April. Add to that a curative petition still pending before the Supreme Court, and this law effectively arrived while the underlying question was still legally unresolved.
There’s a genuine strategic case behind the push, though. China controls the lion’s share of global refining for lithium, nickel, cobalt, and rare earths, and India’s critical mineral import bill has more than doubled in just a few years. Fragmented, unpredictable state taxes are exactly the kind of thing that scares off the investment India needs to close that gap.
So both sides have a real point. India does need one predictable, national tax regime if it wants to compete with China on critical minerals. But erasing court-affirmed dues through a legislative technicality, right before states were set to collect them, isn’t just an inconvenience, it tells every investor that today’s rules could vanish tomorrow too. The fix isn’t complicated, a genuine transition period for dues already earned, an audit both sides trust, and lasting institutions instead of annual favors for the states carrying mining’s real costs.
Delhi gets to set the rules for the mine. It shouldn’t also get to walk away with what states were already owed. India’s gains should not mean Odisha’s loss.
The full article is available in Chapter One Mag.
