The offshore mineral industry in India is going into a phase of stricter regulation and increased responsibility. As the activity of exploration and the development of commercial interest in offshore resources increase, the Government has developed a holistic approach for the prevention of illegal mining and unauthorised transportation of materials, and strengthened monitoring mechanisms.

The Offshore Areas Mineral (Prevention of Illegal Mining and Transportation) Rules, 2026, which are notified by the Offshore Areas Mineral (Development and Regulation) Act, 2002, provide a comprehensive compliance framework governing the extraction, storage, dispatch, transportation, and enforcement of offshore minerals.

These Rules bring in technology-based surveillance, electronic transport permits, well-established stakeholder responsibilities, and strict punishments.

Scope and Applicability of the Offshore Areas Mineral Rules, 2026

The scope provisions also specify the area and to whom the Offshore Areas Mineral Rules, 2026, apply so that commercial offshore mineral activities are fully regulated, while limited scientific and notified governmental activities stay outside routine compliance requirements.

• Coverage of Offshore Minerals: The Rules cover all minerals found in offshore regions, except mineral oils and hydrocarbons, which are regulated under separate statutory provisions.
• Commercial Activity Focus: Any offshore mineral activity that is done to extract, transport, store, sell, or process minerals falls directly within the regulatory scope of these Rules.
• Scientific Research Exemption: The Central Government can exempt individuals who are only involved in scientific testing or research, as long as such engagements do not have any commercial motive or purpose.
• Governmental Exemptions: The Exemptions Government departments or institutions that are notified under the Offshore Areas Mineral Act may be exempted, under the conditions stipulated by the Central Government.
• Uniform Compliance Objective: The scope framework will provide a uniform regulatory control and avoid the misuse of exemptions to avoid offshore mining compliance requirements.

Key Definitions That Shape Compliance Obligations

The Rules present some of the most important definitions that define the extent of liability and responsibility in the offshore mineral operations.

• “Illegal mining” includes any reconnaissance, exploration, or production activity carried out without a valid operating right or beyond the authorised offshore area. Importantly, procedural violations under other mining rules within a valid licence area do not automatically amount to illegal mining under these Rules.
• “Illegal transportation” and “illegal storage” cover any movement or storage of minerals that violates the Act or the Rules, whether undertaken by operating right holders, traders, or carriers.
• The term “carrier” is broadly defined to include vessels, pipelines, or any conveyance used to transport offshore minerals. In contrast, “trader” includes buyers, sellers, processors, exporters, importers, and even entities using minerals as raw material or operating under mineral-sharing agreements.
• A key compliance pillar is the “electronic monitoring system,” which enables real-time tracking of vessels, measurement of mineral quantity and density, recording of displacement data, and continuous image or video capture of offshore operations.

Role of the Atomic Minerals Directorate for Specified Minerals

In the case of atomic minerals that meet or surpass the recommended threshold grades, the Rules give regulatory functions to the Atomic Minerals Directorate for Exploration and Research.

In such cases, references to the Indian Bureau of Mines are deemed to refer to the Atomic Minerals Directorate, and the respective officers take the place of the enforcement and supervisory functions. This gives specialized control of sensitive minerals while maintaining regulatory consistency in offshore operations.

Prohibition on Unauthorised Offshore Mineral Activities

The Rules provide an explicit restriction of conducting production activities, excavation, storage, sale, transportation, or processing of offshore minerals unless done in a strictly regulated manner in accordance with the Act and other applicable rules.

This restriction is forms the legal foundation for inspection, enforcement measures, property seizure, and penalties. Any action that is pursued beyond the legitimate structure is considered illegal, regardless of scale or intent.

Monitoring System: Mandatory Electronic Monitoring and Registration

The Rules present a technology- led compliance framework to provide ongoing monitoring of offshore mining operations, minimize manual intervention, and allow real-time identification of unauthorised mining, movement, or operation deviations in offshore regions

• Mandatory Electronic Monitoring System: All operating rights holders or carrier owners should install a real-time electronic monitoring system that is able to trace vessels, record mineral information, and provide visual evidence continuously.
• Real-Time Vessel Tracking: The system should monitor vessel location, movement, displacement, and operational activity on a real-time basis to avoid route deviation, illegal diversion, or unauthorised offshore operations.
• Registration on Regulatory Portal: Before any offshore mineral activity, all carriers, mechanised machinery, mine developers, and identified individuals must be registered on the offshore mining regulation web portal.
• Restriction on Unregistered Equipment: No mechanised equipment or carrier shall be used unless it is duly registered so that only authorised and traceable equipment is used in offshore operations.
• Regulatory Oversight and Data Access: The government can access monitoring data to check compliance, detect anomalies, and impose accountability without physically interfering.

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Export Clearance Requirements for Offshore Minerals

In cases where offshore minerals are to be exported directly from offshore fields, the holders of operating rights or traders must seek clearance from the Central Board of Indirect Taxes and Customs, where necessary.

Clearance of such should be obtained at least seven days before export, and there should be proper coordination between offshore mining regulations and the customs and trade compliance requirements.

Dispatch and Transportation of Offshore Minerals

The Rules provide a structured digital procedure to control offshore mineral dispatch and transportation, guaranteeing full traceability from extraction to onshore discharge and avoiding unlawful transportation and revenue leakages.

• Pre-Dispatch Information Disclosure: Operating right holders are required to post mineral quantity, grade, consignee, carrier, route, royalty payments, and export documents on the regulation portal before dispatch.
• Digitally Signed Transit Permit: A carrier-specific, digitally signed transit permit is issued on successful submission and permits lawful transportation to the first point of discharge.
• Route Compliance Requirement: The carriers should adhere strictly to the approved transportation route as indicated in the transit permit, avoiding authorised diversions and unlawful offloading.
• Suspension and Revocation of Permits: Transit permits can be suspended due to unpaid dues, use of unregistered carriers, or contraventions, and can only be revived after correction.
• Onshore Transit Compliance: Mineral transit outside the first point of discharge should be in compliance with the relevant State laws.

First Point of Discharge and Weighment Controls

The initial point of discharge serves as a critical verification point. Sufficient electronic or mechanical weighing systems should be installed and maintained according to the authorities.

The weight measured at discharge should be coordinated with the dispatch records, which should be converted to a dry basis by using the prescribed scientific conversion factors. Authorised officers may inspect weighment systems at any time to identify discrepancies or manipulation.

Obligations of Consignees

Consignees who take offshore minerals should check the quantity and grade of minerals against the transit permit. They must ensure that they keep good records of receipt and provide them to the authorities when needed.

This guarantees accountability not only during extraction and transportation, extending compliance to the final recipient of offshore minerals.

Obligations of the Owner and Operator of a Carrier

The Rules provide stringent operational and technological requirements on carrier owners and operators to guarantee safe, traceable, and legal transportation of offshore minerals to prevent diversion, tampering, and unauthorised transportation.

• Installation of Tracking Devices: All carriers should be provided with an effective device that will automatically track their location and report it as a part of the approved electronic monitoring system.
• Automated Identification System: The carriers should have an automated identification system that can send data on the geographical position without failure.
• Mandatory Transit Permit Carriage: A valid, carrier-specific, digitally signed transit permit is required to be carried on board at all times during transportation.
• Route Compliance Obligation: The carriers are required to follow the transportation route as indicated in the transit permit strictly unless otherwise approved.
• Additional Regulatory Conditions: The Indian Bureau of Mines can add other conditions to enhance the monitoring or to mitigate the risks of enforcement.

Storage and Disclosure Obligations

The storage of offshore minerals can only be done in line with the relevant State laws that govern storage facilities. Any storage that is not as per the legal frameworks is considered illegal storage.

The authorities might also demand disclosure of information concerning the quantity, quality, destination, storage location, carrier information, and price of the minerals to help in verifying and auditing.

Inspection, Seizure, and Enforcement Powers

The enforcement provisions will empower the authorised officers to actively patrol, inspect, and intervene in both offshore and onshore areas, so that violations are detected in time and decisive action.

• Inspection and Verification Authority: The officers may inspect mineral stocks, check accounts, scrutinize documents, and sample at any location, including during transit.
• Seizure of Property: Property that has been used in illegal activities, such as tools, equipment, carriers, machinery, or other property, can be seized and detained.
• Procedural Safeguards: Photographic documentation, property marking, and issuance of formal notices in prescribed forms are required in seizure.
• Release against Security: Seized property can be released on posting cash security or a bank guarantee, as per the statutory requirements.
• Inter-Agency Enforcement Support: The enforcement is assisted by the Indian Navy, Coast Guard, State police, and other government forces.

Also Read: Understanding the Offshore Areas Mineral (Auction) Amendment Rules, 2025: Key Insights and Implications

Appeals, Penalties, and Legal Consequences

Any individual aggrieved by the enforcement action can appeal before the Central Government within the stipulated period.

The contraventions can lead to imprisonment of up to five years, fines ranging from fifty lakh rupees to one crore rupees, or both. Continuing offenses attract more fines every day. The authorities can also suggest the cancellation of operating rights, registration of carriers or machinery registration, and asset seizure.

Record Maintenance and Regulatory Oversight

Authorised officers must keep consolidated records of offences in prescribed forms, which contain violations and enforcement measures. This enhances institutional responsibility and promotes data-driven regulatory supervision.

Conclusion

The Offshore Areas Mineral (Prevention of Illegal Mining and Transportation) Rules, 2026, provide a new system of compliance that will help to eradicate illegal mining and unauthorised transportation of offshore minerals. The Rules enhance regulatory control throughout the mineral value chain by integrating digital transit permits, electronic monitoring systems, clearly defined stakeholder roles, and powerful enforcement capabilities.

Compliance requirements have now been extended to not only mining operations but also to carriers, traders, and consignees so that the extraction can be traced to ultimate receipt. Strict fines, inspection authority, and technological control are indicative of the Government intention to protect offshore mineral resources. Stakeholders must ensure timely system integration, procedural discipline, and record maintenance to operate lawfully under the 2026 offshore mineral regulatory regime.