A group of ministers on Friday cleared a new mining policy, which will now be sent to the union cabinet for final approval, Minister of State for mines T Subbarami Reddy said.
"The group of ministers has cleared the mining policy, now it will come up before the cabinet," Reddy said.
Only 10 per cent of India's land mass has been explored for its mineral wealth, and industry officials say this is largely due to the mounds of paperwork involved and bureaucratic delays.
Last July, a committee recommended changes to make it easier to grant permits for surveying, prospecting and leasing of mines, including to foreign firms.
Overseas prospecting companies rarely come to India because they cannot sell the data they map, and can only utilise the information if they mine themselves.
The new policy is also expected to outline a policy on iron ore exports, following demands by domestic steel makers to ban overseas sales to preserve supplies for local firms.