MC EXCLUSIVE Budget 2026 likely to unveil mining policy to cut imports, boost silver, copper production

There have been discussions about giving a real push to metals.

• India may announce a mining policy to cut metal imports and boost manufacturing
• Policy to focus on silver, copper, zinc; boost private mining participation
• Rare earth mining viewed as long-term goal for electronics, battery industries

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The budget for the financial year 2026-27 is likely to build on the previous year’s mining reforms through a formal policy aimed at reducing dependence on imports and stepping up silver, copper and zinc production, people aware of policy discussions have said.

The policy is expected to offer a larger role for private players in mining and processing of the three metals to meet growing industrial demand, as global supply chains come under strain, they said.

“There have been discussions about giving a real push to metals. The focus is on silver, copper and zinc because these are critical for manufacturing and also where India has some resource base,” one of the sources cited above said.

“Silver and copper, zinc are immediate priorities. The idea is to use domestic resources better, improve recovery from existing mines and bring in private players to expand capacity.”

The policy is also expected to look at improving recovery and refining of silver, largely produced as a by-product of copper and zinc mining.

India is one of the world’s largest consumers of silver but remains heavily dependent on imports, especially from China, which recently imposed curbs on some metal exports.

“There is a clear view that India cannot keep importing critical metals if it wants to scale up manufacturing,” the source said.

The previous budget unveiled a string of reforms which eased exploration for critical minerals, streamlined auctions and encouraged greater private participation.

Focus on silver, copper and zinc

Silver will be a key focus because of its rising use in electronics, solar panels and electric vehicles.

“India is already a significant producer of zinc, and there is capacity that can be expanded,” the person, familiar with the discussions, said. “If you improve zinc and copper mining, you automatically improve silver output. The thinking is to start by giving more mining leases to private players in silver-linked projects.”

The government policy may also open up copper mining. India imports a large share of its copper needs even though it has known reserves. With demand rising from power, construction, electronics and electric vehicles, sources said domestic production must be scaled up.

Rare earths: long-term but unavoidable

Rare earth mining is seen as a longer-term goal and India has little choice but to start laying the groundwork now if it wants to move beyond assembly-led manufacturing.

“Rare earths are not an overnight story,” a person familiar with the sector said. “First you need detailed geological surveys. Then you have to deal with land issues, because many potential areas are on farm land. From prospecting to actual mining can take five to six years.”

Rare earth processing is also highly polluting, especially at the smelting and refining stage. This makes environmental clearances and local opposition major hurdles.

“But if India wants to make electronics, batteries and advanced cars, it cannot just import everything,” the sources said. “You cannot make batteries, catalytic converters or most electronics without rare earth metals. Today we import almost all of this.”

Prospecting for rare earths has technically been opened, but private participation is still limited and refining capacity is almost absent, sources said.

“There is hardly any large-scale refining of rare earths in India,” the person said. “Battery making is also very limited. Except for a few projects, often in collaboration with foreign players, there is no strong domestic ecosystem yet.”

Why it matters?

A mining policy will fit into the government’s broader plan to strengthen domestic manufacturing and reduce dependence on imports for critical inputs.

With global supply chains becoming more uncertain and China tightening controls on some metals, India is increasingly vulnerable.

“The manufacturing push will fail if inputs are all imported,” the sources said. “Mining is messy, slow and politically difficult but without it you cannot build a serious industrial base.”

By starting with silver, copper and zinc, and gradually preparing the ground for rare earths, the government hopes to move India from an assembly-led model to one that is more integrated, from raw material to finished product.

Rare earths metals are needed to make super-strong magnets that are used in military applications such as drone and fighter jets and also to power motors in EVs and wind turbines.