Unearth gold to lighten its import burden—there’s plenty of this metal waiting to be dug up in India

Local production is conspicuously tiny, given our vast geological potential. We have over 700 documented ancient gold sites and host Archaean greenstone belts, comparable to the Australia’s Yilgarn Craton, but have explored less than 10% of the obvious potential.

With global gold prices above $4,400 per ounce and global exploration spending at $7.6 billion, capital is going elsewhere. India’s share is negligible, even as we spend nearly $59 billion annually on gold imports.

Endowment without an ecosystem: India is not short of gold. It is short of what translates a geological endowment into economic value. The Geological Survey of India (GSI) estimates the country’s ‘obvious geological potential’ at over 0.52 million sq km. When broader prospective terrain is included, this number climbs to nearly 2 million sq km.

Yet, fewer than 10% of India’s documented ancient gold sites have seen a modern drill. This is odd. Global mining leaders like Canada, Australia and the US built their strength through trusted resource reporting, exploration-focused capital markets and incentive-driven fiscal regimes. India must catch up.

India’s mining policy can be judged by exits. Rio Tinto exited after investing over $500 million, citing delays and uncertainty, while BHP and AngloGold Ashanti redeployed capital to more predictable markets. Newmont and Barrick never entered.

The pattern is consistent: early interest followed by departure. For this, we should blame regulatory friction, uncertain post-discovery rights, long approval times and limited large deposits. Miners seek top-tier assets with sizeable reserves, 10-20 year mine lifespans, policy stability and time-bound clearances; these are conditions offered by many competing jurisdictions but not India.

The missing junior miner problem: The global gold industry runs on junior miners. These are small, nimble, high-risk exploration companies that do the hard work of discovering new deposits; this is work that large miners, with their institutional risk aversion and shareholder reporting obligations, cannot do. Canada has about 373 active gold exploration companies; Australia about 322. India has effectively none.

This gap is structural. Canada’s TSX Venture Exchange and flow-through share model enable early-stage firms to raise risk capital by offering tax incentives to investors, mobilizing $1-2 billion annually. Australia’s ASX plays a similar role. These are not subsidies, but smart fiscal frameworks that channel private capital into exploration. India lacks such mechanisms, limiting its ability to raise exploration risk capital.

The 2023 reform was necessary but not sufficient: To be fair to the government, its 2023 amendments to the Mines and Minerals (Development and Regulation) Act represent the most significant structural mining reform in decades.

The introduction of an Exploration License (EL), which for the first time gives a discovering company preferential rights over a block it found, directly addresses the single biggest structural flaw that was in the way of private exploration economics for 70 years.

While an EL-holder does not automatically get a mining lease, it is entitled to a share of the auction premium from a future miner. This reform deserves credit.

But investor confidence does not follow policy notifications automatically. It follows track records, bankable data and an ecosystem of support institutions. What is still missing is urgency and a package of bold measures to signal India’s seriousness about becoming a top-tier gold jurisdiction.

What pragmatic policy could look like: The policy ask is not complicated. It is merely politically underappreciated.

India needs, first, a dedicated junior mining capital market mechanism that works through a standalone exchange, a flow-through equivalent regulated by the Securities and Exchange Board of India, or a state-backed exploration fund to help pre-revenue exploration companies raise equity from domestic investors with meaningful tax incentives.

Second, India must fully digitize and open up the GSI’s exploration data, and expand drilling through either the GSI or a new technical agency. In countries like Canada and Australia, free access to national geoscience databases lowers exploration costs. India’s National Geoscience Data Repository is a strong start, but it needs a clear mandate and a supportive budget.

Third, India must streamline its environmental clearance pathways. Exploration is not mining. Treating it as an equivalent is economically destructive. A fast-track, time-bound clearance window for exploration-only activities would transform the risk calculus for junior miners overnight. Reporting frameworks determine investment interest, so India should align with JORC or NI 43-101 standards.

Each year of delay costs India nearly $59 billion in gold imports while global exploration capital flows elsewhere. The broader cost includes lost jobs, technology and revenues. At current gold prices, these are far harder to justify.

The authors are, respectively, former chairman, Sebi, and a member of a Self-Regulatory Organization (SRO) of the World Gold Council; and a fellow at Pahlé India Foundation.