After coal block auctions, the government now plans to auction about 20 major iron ore mines this year as it tries to leave behind all past controversies regarding over-mining and illegal exploitation of iron ore.
The sale through auction will be the first such sale ever, reports quoting a top government official said.
India's mining industry has been mired in controversies over illegal exploitation and overexploitation. This had led to cancellation of mining licences by the Supreme Court.
India, once the third-largest iron ore exporter, has now been reduced to a net importer of the steel-making raw material.
The controversies, however, has resulted in the government abandoning an ad hoc policy for mine allocation and instead going for auction sale of mining assets.
The new policy is intended both to weed out corruption and to help the government realise the maximum returns on sale of natural resources.
The allocation of mines, however, is unlikely to lead to an immediate boost in iron ore output at a time when there is a global glut, but will help the country increase steel production and possibly move closer to its target of tripling steel capacity to 300 million tonnes by 2025 while also reducing imports of both steel and ore.
Reports said the auctions are likely to start by October-November, with nearly 80 mines, including iron ore, lime stone and gold, being auctioned in the first phase.
India produced 136 million tonnes of iron ore last fiscal year ended 31 March. About 1.5 tonnes of ore are needed to make 1 tonne of steel, which would mean that India needs to triple output to locally supply iron ore to steel companies.