Cabinet Backs Green Minerals Royalty
Export Mission Gets Rs 25,060 Cr Nod
New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, today approved three interconnected initiatives with a combined outlay exceeding Rs 45,000 crore, focusing on critical minerals for green energy, collateral-free credit for exporters, and a unified export promotion framework. These steps seek to reduce import reliance on battery materials, ease financing for micro, small, and medium enterprises in trade, and accelerate India’s $1 trillion export ambition by 2030, though the success of such schemes often hinges on execution amid bureaucratic delays and global market volatility.
The first decision rationalises royalty rates for four minerals essential to high-tech and energy transition: caesium, graphite, rubidium, and zirconium, all listed among 24 critical and strategic resources under the Mines and Minerals (Development and Regulation) Act, 1957.
Previously fixed per tonne since September 1, 2014, graphite’s rate now shifts to an ad valorem basis to better reflect price fluctuations across grades: 2% of the average sale price for 80% or more fixed carbon, 4% for less. Caesium and rubidium royalties are set at 2% of the average sale price for metal content in ore; zirconium at 1%.
This structure, aligning with 2-4% rates for most critical minerals, aims to incentivise auctions of blocks rich in these elements and associated finds like lithium, tungsten, rare earth elements, and niobium.
India imports 60% of its graphite, despite nine operational mines and 27 auctioned blocks; the Geological Survey of India and Mineral Exploration and Consultancy Limited have identified 20 more for auction, with 26 under exploration. A notice inviting tenders for the sixth tranche of critical mineral auctions, issued September 16, 2025, includes five graphite, two rubidium, one caesium, and one zirconium block.
Graphite serves as anode material in electric vehicle (EV) batteries for high conductivity; zirconium enables corrosion-resistant applications in nuclear fuel cladding and aerospace; caesium powers atomic clocks, GPS, and cancer therapy instruments; rubidium features in fibre optics and night vision devices. The rationalisation is expected to unlock domestic production, cut supply chain risks, and generate employment, particularly in mining regions like Jharkhand and Odisha.
Linking minerals to mobility, the approvals support India’s electric vehicle goals under the Faster Adoption and Manufacturing of Electric Vehicles policy and the 2024 New EV Policy, targeting 30% penetration in private cars, 70% in commercial vehicles, 40% in buses, and 80% in two- and three-wheelers by 2030—equating to 80 million EVs on roads and complete domestic production via Make in India. Production of battery-powered passenger vehicles is projected to rise 140% year-on-year to 301,400 units in 2025, capturing 6% of 5.16 million total output, with sales expected to hit 100,000 units amid a market valued at $54.41 billion this year and doubling to $110.7 billion by 2029 at 19.44% compound annual growth. Two-wheelers will dominate over 50% of sales, three-wheelers 36%, and cars 11% growth in fiscal 2025. Incentives like the E-Drive scheme, with a 114% budget surge to Rs 35,000 crore in 2024-25, and production-linked incentives up 700% for batteries and components, aim to attract $500 million investments for manufacturing plants. Foreign direct investment in automobiles reached Rs 2,59,753 crore ($39.15 billion) from April 2000 to June 2025. States like Maharashtra target 10% EV share in new registrations by December 2025, and Karnataka 100% cargo electrification by 2030.
Challenges persist: EV share at 5% in 2024, with affordability, charging infrastructure (only 12,000 public stations), and high upfront costs as barriers; government schemes like FAME II and Production Linked Incentive (PLI) have spurred 18.2% car sales growth to 100,000 units and 21.2% two-wheeler registrations to 1.15 million, but localisation mandates and subsidies favour domestic firms like Tata Motors (53% EV car market).
Complementing this, the Credit Guarantee Scheme for Exporters (CGSE) provides a 100% guarantee by the National Credit Guarantee Trustee Company Limited to member lending institutions for up to Rs 20,000 crore in additional facilities to eligible exporters, including MSMEs. The Department of Financial Services oversees implementation via a secretary-chaired committee. Exports account for 21% of GDP in FY 2024-25, employ 45 million, and sustain foreign reserves, with MSMEs contributing 45% of shipments. The scheme offers collateral-free working capital through interest subvention, export factoring, guarantees, e-commerce credit cards, and risk enhancement for new markets, addressing high collateral needs that lock 30-40% of capital. A digital portal handles applications, prioritising MSMEs; uptake in similar schemes like Interest Equalisation has favoured larger players, prompting monitoring to ensure equity.
The Export Promotion Mission (EPM), with Rs 25,060 crore from FY 2025-26 to 2030-31, unifies fragmented supports into a digital framework via the Department of Commerce, Ministry of Micro, Small and Medium Enterprises, Ministry of Finance, banks, export councils, commodity boards, industry bodies, and states. It features two sub-schemes: Niryat Protshahan for financial tools like subvention and guarantees, and Niryat Disha for non-financial aid, including compliance certification, branding, trade fairs, warehousing, logistics reimbursements, and capacity building. Absorbing the Interest Equalisation Scheme and Market Access Initiative, EPM adapts to tariff escalations in textiles, leather, gems and jewellery, engineering, and marine products, targeting MSMEs, first-time exporters, and labour-intensive sectors in non-traditional districts. The Directorate General of Foreign Trade manages it through an integrated platform, aiming to facilitate $1 trillion exports by cutting compliance costs and improving visibility—though past initiatives saw uneven regional spread, raising questions on inland producers’ access.
In a broader push, the minerals approval advances the 2023 National Critical Minerals Mission, with 24 blocks auctioned since inception but production delayed by royalties and clearances; the sixth tranche’s seven blocks could draw Rs 5,000 crore bids by March 2026. Graphite’s ad valorem rate tracks a 15% global price rise in 2024 from EV demand; caesium/rubidium from Rajasthan/Jammu & Kashmir could yield output by 2027; zirconium from Kerala/Odisha sands bolsters nuclear tech. These feed EV localisation under the 2024 policy, which cuts duties to 15% for $500 million investors building plants within three years, alongside Rs 35,000 crore for hydrogen and tech adoption in the 2024 Budget. FDI in autos hit Rs 2,59,753 crore ($39.15 billion) from 2000-2025; states like Maharashtra eye 10% EV share by late 2025, Karnataka full cargo electrification by 2030. Barriers remain: 5% EV share in 2024, 12,000 charging stations, high costs; the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India Phase-II (FAME II) and Production Linked Incentive (PLI) Scheme drove 18.2% car sales to 100,000 units, 21.2% two-wheelers to 1.15 million.
CGSE and EPM extend the Foreign Trade Policy 2023, with duty remission to 2026. CGSE’s ceiling could aid 5-7 lakh MSMEs, freeing Rs 10,000 crore capital; Niryat Disha‘s Rs 10,000 crore supports 50,000 first-timers via 1,000 fairs and 200 labs. Exports grew 14% to $778 billion in FY24 but lag $1 trillion amid European Union steel tariffs and U.S. visa reviews. Digital processes promise speed, but privacy risks persist.
These approvals align with Atmanirbhar Bharat and Viksit Bharat @2047, tying minerals to 30% EV penetration by 2030 (80 million vehicles) and export-led growth. Graphite auctions may create 50,000 jobs in mining belts; EPM warehousing in 100 districts cuts logistics by 20%. The Rs 45,000 crore package signals resolve, but Q1 FY26 launches and March 2026 auctions will test if it delivers beyond intent.
– global bihari bureau
