Union Budget 2025-26: Focus on Mining Sector Reforms, Recycling Industry, and Critical Mineral Recovery

New Delhi: In her Union Budget 2025-26 speech presented today, Union Minister of Finance and Corporate Affairs, Nirmala Sitharaman, identified the mining sector as one of the key areas for transformative reforms, alongside other critical domains such as taxation, power sector, urban development, financial sector, and regulatory reforms. These reforms aim to drive India’s growth potential and enhance its global competitiveness in the next five years.

As part of the mining sector reforms, Sitharaman announced a series of measures aimed at fostering growth and improving sustainability within the industry. One of the key proposals includes encouraging states to implement reforms for minor minerals and sharing best practices to improve overall mining management. To further streamline the sector, a State Mining Index will be instituted to assess and benchmark performance, incentivizing states to adopt progressive mining practices.

Additionally, the government introduced a policy for the recovery of critical minerals from tailings, which are the leftover materials from mining operations. This is expected to significantly boost the domestic availability of critical minerals, which are essential for several industries, including renewable energy, electronics, and electric vehicles. Effective tailings management will also support the growth of the domestic processing industry, reducing reliance on imports and strengthening India’s supply chain.

The budget also proposes eliminating customs duties on various scrap materials, including copper, brass, lead, and zinc scraps. This move is aimed at promoting the domestic recycling industry by lowering input costs for secondary producers. By removing these duties, India will level the playing field for its domestic manufacturers, allowing them to compete more effectively with international secondary producers, thus helping the country increase its exports of secondary and downstream products.

Furthermore, the Finance Minister announced the duty elimination on scraps of 12 critical minerals, including copper, cobalt powder, and lithium-ion battery scraps. These materials are essential feedstocks for the critical mineral recycling industry. With lower costs for raw materials, the industry will become more competitive, attracting investments for building new capacities and expanding existing ones.