State Mining Readiness Index (SMRI) 2025

The Ministry of Mines has recently released the State Mining Readiness Index (SMRI), a tool designed to assess and benchmark the performance of Indian states in the mining sector. The index aims to foster healthy competition among states, accelerate the pace of mining reforms, and promote sustainable resource management. The SMRI 2025 evaluates states based on key parameters related to auction performance, early mine operationalization, exploration focus, and sustainable mining practices, particularly for non-coal minerals.

Objectives of the SMRI

• Benchmarking State Performance: The index serves as a tool for measuring how effectively each state is managing its mining resources.

• Encouraging Competition: The rankings aim to encourage states to adopt best practices and improve their mining policies, thus boosting overall mining efficiency and sustainability.

• Accelerating Reforms: The SMRI is designed to promote the faster implementation of mining reforms and better resource management practices across the country.

• Sustainable Mining: The focus is on not only increasing the mining output but also ensuring that environmentally sustainable mining practices are implemented in the sector.

Key Parameters of the State Mining Readiness Index

The SMRI assesses the following key factors to gauge the mining readiness of each state:

1. Auction Performance: The effectiveness of states in conducting mining auctions, ensuring transparency and efficiency in the allocation of mining leases.

2. Early Mine Operationalisation: The speed and efficiency with which states operationalize mines after auctioning.

3. Exploration Focus: The commitment of states to promote mineral exploration, identifying new resources to boost mining activity.

4. Sustainable Mining Practices: The emphasis on ensuring environmental sustainability in the extraction and processing of minerals.

These indicators aim to capture the overall readiness and efficiency of states in facilitating mining activity and implementing reforms.

Categorised Evaluation

The SMRI divides states into three distinct categories based on their mineral endowment, ensuring a fair comparison and tailored approach to improving mining governance:

• Category A: Mineral-rich States
  States with abundant mineral resources that can fuel large-scale mining activities.

• Category B: Moderately Endowed States
  States with a moderate concentration of minerals, having the potential for further exploration and development.

• Category C: Low-endowment States
  States with limited mineral resources but opportunities for efficient mining management and exploration.

2. Focus on Non-Coal Minerals

One of the key differentiators of SMRI is its emphasis on non-coal minerals, encouraging states to diversify their mining activities beyond coal. This is critical for India’s resource diversification, where minerals like lithium, rare earth elements, and precious metals are gaining importance due to their relevance in sectors like electronics, renewable energy, and electric vehicles.

By focusing on critical and strategic minerals, the SMRI helps promote:

• Sustainable resource extraction: Prioritizing minerals that are vital for the green economy, and ensuring the responsible use of India’s mineral wealth.

• Global competitiveness: Aligning with global supply chains, where demand for non-coal minerals is rising rapidly.

3. Reform Benchmarking Tool

The SMRI acts as a reform benchmarking tool, setting the stage for states to implement policy alignment with key national priorities such as:

• Ease of doing business: Encouraging states to make the mining process more transparent, simpler, and faster.

• Investment promotion: Enhancing the attractiveness of states for both domestic and foreign investments.

• Sustainable resource management: Prioritizing practices that reduce environmental degradation and increase resource efficiency.

This index drives states to align their mining policies with national-level objectives, leading to the modernization and transformation of India’s mining sector.

4. Supports Federal Reform Model

The SMRI is an essential tool for promoting cooperative federalism in India. It encourages states to collaborate and learn from each other’s best practices, while motivating the lagging states to improve their mining ecosystem.

Category A (States Rich in Mineral Resources)

1. Madhya Pradesh

2. Rajasthan

3. Gujarat

Category B (States with Moderate Mineral Resources)

1. Goa

2. Uttar Pradesh

3. Assam

Category C (States with Limited Mineral Resources)

1. Punjab

2. Uttarakhand

3. Tripura

Significance of SMRI for India’s Mining Sector

1. Encouraging Reform and Investment: The SMRI will help drive reforms in the mining sector by providing clear benchmarks for states to compete against each other. States that are lagging can look at the best practices of top-performing states to boost their own performance and attract more investment into the mining sector.

2. Sustainability and Responsible Mining: The focus on sustainable mining is crucial, as it ensures that mining activities do not lead to environmental degradation and that resources are managed responsibly for long-term economic benefits.

3. Attracting Investments: By promoting better auction performance and faster operationalization of mines, the index will help India attract both domestic and international investments into the mining sector, which is essential for economic growth and job creation.

4. Enhancing Resource Utilization: The SMRI encourages states to focus on exploration of non-coal minerals, enhancing the utilization of India’s vast mineral resources, which remain under-exploited in some regions.