The Union Cabinet has approved a landmark rationalisation of royalty rates for graphite, caesium, rubidium, and zirconium, marking a strategic step to strengthen India's critical mineral sector.

The decision aligns with the government’s broader National Critical Mineral Mission, which seeks to ensure supply chain security and self-reliance in minerals essential to the green and high-tech economy.

Under the revised framework, royalty rates are now pegged to the average sale price (ASP) on an ad valorem basis, replacing the earlier fixed “per tonne” approach. This change makes valuations more reflective of market conditions and mineral grades, creating a fair and predictable environment for investors.

The new ad valorem rates are set at 2% for graphite with 80% or higher fixed carbon and 4% for lower grades, 2% each for caesium and rubidium, and 1% for zirconium, consistent with the rates for other critical minerals.

The shift is expected to unlock new opportunities in domestic mining and attract greater investor participation in ongoing and upcoming auction rounds. The move comes ahead of major mineral block auctions under the sixth tranche announced in September 2025. By offering more transparent and investor-friendly royalty structures, the government aims to catalyse exploration and production, especially in resource-rich states.

Graphite, being crucial to battery anodes, holds immense significance for India’s burgeoning electric vehicle (EV) ecosystem. India currently imports nearly 60% of its graphite requirements, with most supply dependent on fluctuating international markets. Rationalised royalties are seen as a catalyst for scaling local production and reducing dependence on imports.

Caesium and rubidium, though lesser-known, are strategic to high-precision electronics, including atomic clocks, GPS systems, and advanced communication devices. Zirconium, another critical mineral, serves a vital function in nuclear reactor cladding and other advanced applications. Enhancing domestic production capacities of these minerals will directly support national priorities in energy security, space research, and defence technologies.

A further benefit lies in the potential co-extraction of associated critical minerals. Geological deposits containing graphite, caesium, or zirconium often occur alongside lithium, tungsten, rare earth elements (REEs), and niobium. Rationalising royalties for the primary minerals will thus facilitate the exploitation of these associated resources, expanding India’s critical mineral base for the EV and renewable sectors.

The government’s decision also aims to improve resilience against global supply chain disruptions, a vulnerability highlighted by international trade restrictions on key minerals. By encouraging exploration and sustainable mining within its borders, India moves toward securing vital mineral inputs for its strategic industries under the Atmanirbhar Bharat vision.

This rationalisation aligns with global best practices, ensuring that resource pricing reflects market dynamics while maintaining fiscal stability for both states and investors. It is expected to create a predictable framework that stimulates long-term investments in exploration, refining, and downstream value additions for high-tech and green energy applications.

Through this policy, the government underscores its intent to build a future-ready critical mineral ecosystem — one that supports the transition to clean energy, strengthens strategic autonomy, and positions India as a competitive hub in the global critical minerals value chain.

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