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Foreign investments in the Indian mining sector: perspectives and opportunities
🌍Liberalization and policy📜
Since the economic liberalization in India in 1991, sectors such as mining and metallurgy have been opened to private investments, both domestic and foreign. The National Mineral Policy of 1993 aims to align the Indian mining sector with international standards and competitiveness, encouraging the introduction of foreign technology and participation in the exploration and mining of high-value and rare minerals.
💼Foreign capital participation💵
In 1994, restrictions on foreign capital participation were removed, allowing even 100% foreign capital. An "automatic route" for foreign capital participation up to 50% is available for mining companies of certain minerals, such as iron ore, manganese ore, or chromite. Foreign participation up to 74% is permitted in mining-related services, and participation above 50/74% up to 100% is possible subject to FIPB approval.
🔨Challenges and reforms⚙️
Current challenges in the sector include limited exploration (only about 10% of the Obvious Geological Potential area) and modest investments in mineral exploration. The new Mines and Minerals Bill of 2023 aims to attract the private sector to greater involvement in exploration by introducing significant changes such as expanding the scope of reconnaissance work, introducing exploration licenses, and declassifying certain atomic minerals.
🤔Industry concerns and perspectives💡
Although there are concerns about certain aspects of the new law, they highlight the potential and opportunities that could open up for foreign investors, including from Poland, which expresses interest in participating in the development of the mining sector in India. Polish companies, known for their rich history and experience in mining, may find valuable opportunities in the Indian mining sector.
🌟Conclusions🛣️
The dynamically changing landscape of the Indian mining sector, increasingly open to foreign investment and the private sector, presents promising opportunities for international investors. With new regulations and market practices, this sector is becoming increasingly attractive to global players, including Poland, opening new horizons for cooperation and growth.