(Reuters) - The Rajya Sabha passed a bill on Friday to auction mines that supply minerals like iron ore and bauxite for the first time, in a thumbs up for Prime Minister Narendra Modi's bid to kickstart an industry that has languished for years.
The passage of the Mines and Minerals Development and Regulation bill by the Rajya Sabha was crucial for Modi because the ruling Bharatiya Janata Party (BJP) lacks a majority in the second chamber.
The bill will now be taken up by the Lok Sabha, where BJP enjoys an overwhelming majority. A bill to auction coal mines is also likely to be passed later on Friday by both houses.
The mining sector in Asia's third largest economy has been mired in controversy over the illegal allocation of resources, causing a near standstill in granting permits to open new mines for firms including South Korean steel giant POSCO.
India was once the world's third-largest exporter of iron ore but is importing heavily now due to court action on illegal mining. India's top court has eased some of the curbs, but state bureaucrats have dithered over renewing mining licenses, fearing charges of corruption.
The government hopes auctions will reduce the risk of wrongdoing, helping to put the mining industry back on track. But it is unlikely to lead to a sudden surge in iron ore output at a time when there is a global glut and prices have crashed.
(Reporting by Krishna N. Das and Nigam Prusty; Editing by Douglas Busvine and Joseph Radford)