The Indian Mining Sector was opened up in stages, to private, including foreign investment, as part of the liberalisation programme of the Indian economy. This has been done in tune with the general economic liberalisation and reforms introduced by the Government in various sectors. The National Mineral Policy, 1993, enunciated this policy of encouraging private, including foreign investment in the mineral sector. The Mines & Minerals (Development & Regulation) 1957, the basic statute, was attended in 1994, by which foreign direct investment in the mineral sector was welcomed for the first time. In January, 2000, it has been further amended to grant greater security of tenure, and to simplify procedures, etc. so that the mining regime in India today is on par with global standards in this regard. 

As you probably know, our country has significant deposits of mineral wealth. However, most of the reserves remain unutilized because of the very high levels of capital and technology required to explore and exploit these deposits. Most of the exploration done in India followed the conventional route of geological mapping, exploratory drilling, trenching and exploratory mining which are appropriate for exploring surfacial and relatively shallow deposits. More recently, we have introduced remote sensing technology, too in this search. But major discoveries have so far been lacking due to financial constraints to utilize more sophisticated technologies in exploration. Other than the east coast bauxites, and the Rampur Agucha zinc deposit in Rajasthan, there has not been any major discoveries of Gold, Diamond and base metal deposits, even though the geological settings are considered to be comparable with those of Australia, South Africa and Canada. Therefore, sustained inflow of private including foreign investment is desirable to bring in state-of-the technology, coupled with foreign capital for the exploration, and exploitation of mineral resources and in country value addition.

With this in mind, the Ministry of Mines has been effectively utilising various international fora like this one, to highlight the Policy and legislative initiatives undertaken by us to project India as an attractive investment destination. Fortunately, the response has been good. So far the Foreign Investment Promotion Board (FIPB) has cleared 68 proposals relating to mining, which together envisage an initial investment of over Rs. 3,700 crores.

The FDI policy has now been further liberalised, as I mentioned, in the year 2000, to remove any hindrances the foreign investors may face. The salient features of the revised sectoral guidelines aimed for further liberalisation in the mining sector effective from 11th, February 2000 are as follows: 
 

• There will henceforth be no difference in the caps on foreign equity holdings to be allowed at the stages of exploration and that of mining.
• For all minerals with which the Department of Mines is concerned other than diamonds & precious stones, foreign equity holding upto 100% will be allowed on the automatic rotate, for both exploration and mining
• In case of diamonds & precious stones, foreign equity upto 74% will be allowed on the automatic route for both exploration and mining operations. For proposals seeking higher than 74% foreign equity, the cases will have to come to the. FIPB for clearance.
• Foreign equity upto 100% will be allowed on the automatic route for processing of minerals and metallurgy. There will be no requirement of 'No objection Certificate’ existing joint venture partner for fresh investments by through FDI. The prospective investor will only have to give a declaration that he has no existing joint venture for the same area and/or the particular minerals. 

Mining has been classified as a manufacturing activity under the Export Promotion Capital Goods (EPCG) Scheme. Capital goods imported for mining would now qualify for concessional rates of customs duty subject to certain export obligations. This policy will lead to a large reduction in project costs.

Government of India has made arrangements for furnishing necessary geological, geophysical, mineral inventory and other related data by concerned agencies such as Geological Survey of India, Indian Bureau of Mines, etc. to entrepreneurs on payment of reasonable charges.

This recent liberalisation of policy has provided a conducive scenario for the international mining companies to invest in the country and bring with this investment, world class mining technology. The policy of the Government of India has been to actively encourage foreign investors to participate in the exploration and production of minerals and mineral based industries. The Indian economy is one of the largest emerging markets in the world with a well diversified industrial base and having a large reservoir of skilled manpower. Mining industry is an important segment of the Indian economy which contributes more than 2% in the Gross Domestic Product (GDP).

As a part of our policy to actively . encourage such investment, in order to give a further push for the FIPB approved projects to get off the ground quickly, we have set up a monitoring system. This involves a periodic review by the Foreign Investment Implementation Authority (FIlA), which looks at the progress made in implementing the major projects. Also, within each Ministry, there is a Fast Track Committee (FTC) which closely monitors the projects in that particular sector. As a consequence of these efforts, I am happy to state that as many as 114 prospecting licences reconnaissance permits for aerial survey over large areas covering more than 150,000 square kilometers have been granted in the States of Rajasthan, Andhra Pradesh, Karnataka, Uttar Pradesh, Gujarat, Haryana, Bihar (now Jharkhand), Maharashtra and Madhya Pradesh for high value minerals like gold, diamond, base metals etc.

You will also be happy to learn of one more initiative that we are taking. As you know, India is a peninsula. and the new limits of Exclusive Economic Zones (EEZ) going upto 200 nautical miles from the shore, give us a very large area for marine survey. We are hoping to introduce a bill in the coming session of Parliament titled of The Offshore Areas Mineral (Development and Regulation) Bill, 2001". This will provide an opportunity to undertake survey of the ocean bed in our Exclusive Economic Zone (EEZ) to assess its potential mineral wealth. Again, we look for appropriate technical expertise to undertake the survey and to exploit this wealth. 

We just concluded a Conference of the State Ministers of Mining and Geology at New Delhi on 14th July, 2001. Mining Ministers and senior Government officials attended the Conference in which the need for pursuing an investor friendly policy was deliberated at length.

To conclude, may I emphasise that the Indian mining statute is comparable to the best in the world. The FDI policy is liberal and conducive for investment. Therefore conditions in the Indian mining sector are quite favourable for investment and we are confident that the stage is set for attracting substantial! investment in the mineral sector.