Congress-ruled states are mounting a coordinated legal challenge to the MMDR Amendment Act, 2026, with Karnataka, Kerala and Telangana planning to approach the Supreme Court within 10 days. As per Business Standard, Congress general secretary Jairam Ramesh confirmed that a petition has been prepared and the three chief ministers were in New Delhi for a Congress Working Committee meeting where party leadership discussed the implications of the amended mining law. The Congress also plans to bring Jharkhand on board for the legal challenge, potentially turning the Centre-state dispute into a coordinated constitutional challenge.
State-run miner NMDC has disclosed a ₹15,786 crore contingent liability related to potential retrospective mineral tax obligations in Karnataka. According to the company's stock-exchange filing, NMDC stated that should the amended mining law be enacted as currently drafted, the company may be liable to pay ₹15,785.72 crores as of the reporting date. The company emphasized that this amount has been considered a contingent liability given the pending legislative process and ongoing stakeholder discussions.
NMDC CMD Amitava Mukherjee has welcomed the government's structural reforms in the mining sector, stating that the MMDR Amendment Act, 2026 directly resolves long-standing operational bottlenecks by curbing non-uniform state taxes and unexpected cesses that burdened mineral extraction. As the Ficci Mining Committee Chair, Mukherjee emphasized that the amendments will address long-standing operational bottlenecks in the mining sector by bringing greater uniformity and predictability. He noted that greater certainty in the taxation and levy framework could encourage fresh capital investments in the mining sector and accelerate exploration and development of mineral resources.
The MMDR Amendment Bill, 2026, passed by both Houses of Parliament on August 13, aims to bring greater certainty and stability to India's major minerals sector by creating a more predictable fiscal regime. As per the Ministry of Mines, the amendment does not take away any rights of states over land and minerals or their power to levy taxes on minerals. Around 90% of taxes and statutory payments from mining currently accrue to states, and this arrangement will continue under the amended framework. The President of India has officially assented to the Mines and Minerals (Development and Regulation) Amendment Act, 2026, ushering in a landmark reform for the mining sector. The government emphasized that the changes are intended to provide certainty and predictability in the fiscal regime, which could give a boost to investment in mining and support the objectives of Aatmanirbhar Bharat and the vision of Viksit Bharat 2047.
The amendment has revived constitutional disputes over taxing powers and fiscal federalism, curbing state mineral levies while bringing mineral-bearing lands under Union control. The MMDR Amendment Bill, 2026, amends the Mines and Minerals (Development and Regulation) Act, 1957, and proposes a new Section 9D that restricts state governments from imposing taxes, cess or similar levies on mineral rights or mineral-bearing land except within conditions prescribed by the Centre. The Bill invalidates earlier dues that had neither been recovered nor deposited before the amendment takes effect, while amounts already collected will not be refunded. Union Mines Minister G Kishan Reddy clarified that the amendment concerns major minerals and leaves states' powers over 49 minor minerals intact.
Between FY16 and FY26, major mining states received more than ₹5 lakh crore from mining operations, while the Centre's revenue stood at ₹82,000 crore, according to the Ministry of Mines. The ministry highlighted that minerals are critical for infrastructure, manufacturing, energy security and broader economic development, noting that India imported minerals worth ₹10.12 lakh crore in FY26. States currently impose around 14 types of taxes, charges, fees and other levies on mining operations, including royalty, auction premium, dead rent, contributions to the District Mineral Foundation, GST and transit fees. The ministry argued that uneven state-level taxation can raise domestic costs, weaken the competitiveness of locally available minerals and encourage imports despite availability of domestic resources.
