Seeking to strengthen India’s self-reliance in the supply of strategic minerals, the Union Cabinet on Wednesday (November 13, 2025) approved the rationalisation of royalty rates for four key critical minerals — graphite, caesium, rubidium and zirconium. The move is aimed at encouraging domestic exploration, reducing import dependency, and attracting investments into India’s critical minerals sector.

Shift to ad valorem royalty structure for graphite

Under the new royalty structure, graphite, which was previously charged on a per tonne basis, will now be subject to an ad valorem royalty—a percentage of the mineral’s average sale price.

  • Graphite with less than 80% fixed carbon content will attract a 4% royalty, while that with 80% or more carbon content will attract 2%.

The Ministry of Mines said this change would ensure that royalty payments are aligned with the actual market value of minerals and would proportionately reflect changes in prices across grades.

India currently imports nearly 60% of its graphite requirements, primarily used in electric vehicle batteries as an anode material, crucial for ensuring high conductivity and energy efficiency.

Royalty rates for caesium, rubidium and zirconium

The Cabinet also approved uniform ad valorem royalty rates for three other critical minerals:

  • Caesium and rubidium: 2% of the average sale price based on the metal content in the ore produced.
  • Zirconium: 1% of the average sale price.

These minerals have strategic industrial and defence applications. Caesium is used in atomic clocks, GPS systems and medical equipment for cancer therapy, while rubidium is vital for manufacturing speciality glass used in fibre optics, telecommunication and night-vision systems. Zirconium serves as a cladding material for nuclear fuel rods, besides applications in the aerospace and healthcare sectors.

Boost to critical mineral auctions

The government expects the rationalisation to promote auctions of mineral blocks containing these elements, thereby increasing domestic availability and reducing reliance on imports.

According to an official statement, the Cabinet emphasised that the revised structure will “help bidders to rationally submit their financial bids during auctions” and foster greater participation in the ongoing sixth tranche of critical mineral block auctions.

This auction round, launched in September 2025, includes five blocks of graphite, two blocks of rubidium, and one block each of caesium and zirconium. Officials noted that rationalised rates would also help trace associated minerals such as lithium, tungsten, rare earths, and niobium within these deposits.

Strategic importance and policy alignment

The decision aligns with India’s broader Critical Minerals Mission, which seeks to build secure, diversified, and resilient supply chains for essential raw materials used in emerging technologies, green energy, and defence manufacturing.

By offering clearer pricing and lower entry barriers, the new royalty regime is expected to make India more attractive to domestic and foreign investors, particularly in the context of rising global competition for mineral resources.

Conclusion

The Cabinet’s move to rationalise royalty rates is a strategic step toward achieving mineral self-reliance, supporting the government’s larger vision of Aatmanirbhar Bharat. The policy is expected to enhance domestic exploration, stimulate private participation, and ultimately reduce India’s vulnerability to supply disruptions in critical mineral value chains