Officials said Minister of State for Mines, T Subbarami Reddy has asked the apex Geological Survey of India to explore additional reserves of gold and diamonds in states of Andhra, Karnataka, Madhya Pradesh, West Bengal, Rajasthan, Bihar and Chattisgarh.
Reddy's instructions come in the wake of plans that India is chalking to reduce the country's dependence on imported bullion, particularly when estimated reserves are expected in the identified states.
Officials said the ministry has given a minimum time limit of 3 years to GSI.
Currently, India is estimated to have 14,000 of gold and diamond reserves, which Reddy said should be accelerated by 20,000 tonnes in next 3 years.
The mines ministry has also allopwed the public sector company Hindustan Copper Ltd to diversify into gold and diamond minings in collaboration with leading foreign companies through setting up of joint ventures with equal equity stake.
The overseas firms that are in talks with government for gold and mining exploration include Indogold, Anglo-American Gold Mining, Monarach Gold Mining, De Beers India Ltd., ACC Rio Tinto Exploration Ltd. and BHP Minerals.
Abundant gold reserves are found in India and that is why these companies are being roped in so that minimum 20,000 tonnes of gold and diamond is explored by 2010.
The Indian government is taking all initiatives to channelise efforts in unearthing high value minerals like gold and diamonds. Despite abundant reserves of gold and other minerals, India imports Rs.65000 crore (Rs 650 billion) of gold per annum as against Rs.75000 crore (Rs 750 billion) of diamond imports.
India currently produces hardly 0.4% of its gold consumption despite having 9% of global gold reserves under the country's land mass. Though private entrepreneurs have come forward for reconnaissance, hardly less than 1% of them have come up to mining stage. This is mainly for want of latest technology, high risk capital etc.
Analysts have predicted that the demand for gold was likely to rise further. The trend analysis indicates a consumption of 980 tonnes by 2010 and 1152 tonnes by 2015 from the current demand of 800 tonnes annually.