Royalty reform of cabinet needs to be supplemented by setting up of domestic processing units: GTRI

New Delhi [India] November 13 (ANI): The Union Cabinet's decision to amend royalty rates for key critical minerals may help attract more bidders in upcoming auctions, but the move will not deliver strategic gains unless India simultaneously builds domestic processing capacity, the Global Trade Research Initiative (GTRI) has cautioned.
According to the think tank, the shift to a low 1-4 per cent ad-valorem royalty structure for minerals such as graphite, zirconium, rubidium and caesium is a welcome step aimed at boosting exploration and production. The earlier per-tonne royalty regime had been viewed as a deterrent for miners.

However, GTRI notes that India's challenge extends far beyond mining. Even with increased extraction, the country lacks the ability to refine these minerals into the high-purity inputs required for batteries, electronics, optics and advanced manufacturing.
While India has some graphite-upgrading capability, thanks to firms like Epsilon Advanced Materials and Graphite India, the country is still heavily import-dependent for higher-grade graphite used in battery anodes. For zirconium, domestic output is limited to beach-sand zircon, with virtually no capacity to convert it into the refined compounds needed by electronics and specialty alloy manufacturers.
The gaps are even wider in the case of rubidium and caesium, exploration is still in early stages, and India has no processing infrastructure for producing high-purity salts or metals used in a range of strategic technologies.
GTRI stresses that without a comprehensive ecosystem, including refining, purification and advanced material processing, India's downstream industries will continue relying on imports, especially from China, which dominates the global value chain for these minerals.
The think tank argues that true self-reliance in electric vehicles, semiconductors and other high-tech sectors will require the government to pair royalty reforms with a parallel push for building domestic processing plants, incentivising private investment, and creating integrated value chains rather than just expanding mining activities.
The Cabinet's announcement is a step forward, GTRI says, but its impact will depend on swift rollout, inter-agency coordination and substantial investment to close India's critical-mineral processing gap. (ANI)