Human Rights Watch (HRW) says this lack of enforcement has led to “pervasive lawlessness” in the mining industry.
In a new report, the group alleges that irresponsible mining operations have damaged the health, water, environment and livelihoods of local communities.
In a 70-page report report “Out of Control: Mining, Regulatory Failure and Human Rights in India, which was released on Thursday, HRW says poor policies have meant little supervision of mining operations.
“Mining operations often cause immense destruction when government doesn’t exercise proper oversight,” Meenakshi Ganguly, South Asia director of Human Rights Watch, said.
“The government has encouraged lawlessness by failing to enforce the law or even monitor whether mine operators are complying with it,” she added.
The report says that India has laws on the books to protect mining-affected communities from harm, but “their enforcement has essentially collapsed”.
Mining scandals have grabbed headlines in India recently.
Last August, BS Yeddyurappa had to quit as Karnataka chief minister after he was implicated in an illegal mining scandal. The state ombudsman said it had cost Karnataka $400m (£250m). Mr Yeddyurappa denies the charges.
In November, a report alleged that nearly half the iron ore exported from the western state of Goa was illegally mined.
India is the largest producer of sheet mica, the third largest producer of iron ore and the fifth largest producer of bauxite in the world.