Budget 2026: Odisha, Kerala, Andhra, Tamil Nadu to have dedicated rare earth corridors

NEW DELHI: Finance Minister Nirmala Sitharaman has proposed to support mineral rich states such as Odisha, Kerala, Andhra Pradesh, and Tamil Nadu to establish dedicated rare earth corridors. A scheme for rare earth permanent magnets was launched in 2025 November.

The government had approved the ‘Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnet’ with a financial outlay of Rs 7,280 crore. The scheme aims to establish 6,000 metric tonnes per annum (MTPA) of integrated REPM manufacturing capacity in India, covering the full chain from rare-earth oxides to finished magnets.

“We now propose to support the mineral-rich states of Odisha, Kerala, Andhra Pradesh and Tamil Nadu to establish dedicated rare earth corridors,” announced Nirmala Sitharaman, presenting Union Budget for 2026-27.

Watch Live: Smt @nsitharaman presents Union Budget 2026–27 in Parliament #ViksitBharatBudget @sansad_tv @PIB_India https://t.co/DieMezvgTp

— Nirmala Sitharaman Office (@nsitharamanoffc) February 1, 2026

To build the current rare earth capacity, Sitharaman proposed to establish high-tech tool rooms by central public sector enterprises at two locations as digitally enabled automation service bureaus that locally design, test and manufacture high precision components at scale and at lower cost.

She also proposed a scheme for the enhancement of construction and infrastructure equipments will be introduced to strengthen domestic manufacturing of high value and technologically advanced CIE, the FM added. The Finance Minister said that the rare earth corridors will promote mining, processing, research and manufacturing.

Sitharaman said, “A scheme for rare earth permanent magnets was launched in 2025 November. We now propose to support mineral-rich states such as Odisha, Kerala, Andhra Pradesh and Tamil Nadu to establish rare earth corridors to promote mining, processing, research and manufacturing.”

Finance Minister Nirmala Sitharaman has proposed to push India’s biopharma sector through a Biopharma Shakti programme, with an allocation of Rs 10,000 crore over the next five years.

Highlighting India’s shift towards non-communicable diseases such as diabetes, the Finance Minister proposed Biopharma Shakti, with an outlay of ₹10,000 crore over five years, to develop India as a global biopharma manufacturing hub.

Bio Pharma Shakti is aimed at building at making ecosystem for biopharma and biosimilars, she said, presenting the Budget in the Parliament on Sunday.

Among other announcements, she proposed scaling up manufacturing in strategic and frontier sectors and developing city economic regions.

In her initial remarks, Finance Minister Nirmala Sitharaman said that since her government assumed office, the Indian economic trajectory has been marked by fiscal discipline and sustained growth.

She stressed that the government led by Prime Minister Narendra Modi has chosen action over ambivalence, and reform over rhetoric, keeping Atmanirbharta or self-reliance as a lodestar.

“Since we assumed office 12 years ago, India’s economic trajectory has been marked by stability, fiscal discipline, sustained growth and moderate inflation,” she said. She continued that India will balance ambition with inclusion going ahead.

In her budget speech, the FM also proposed to spend Rs 40,000 crore for electronics components manufacturing. The Finance Minister said India’s Semiconductor Mission 1.0 expanded the country’s semiconductor capabilities. Building on this, the government will now launch semiconductor mission 2.0 to produce equipment and materials, develop full-stack Indian IP, and strengthen supply chains.

She asserted that the “reform express” of the Narendra Modi-led National Democratic Alliance (NDA) government is well on its way and will continue to maintain momentum to fulfil its duties.

Highlighting the economic performance of the NDA government, Sitharaman said India’s economic trajectory since 2014 has been marked by stability, fiscal discipline and sustained growth.

“The reform express is well on its way and will maintain its momentum to help us fulfill our duties. Since we assumed office 12 years ago, the country’s economic trajectory has been marked by stability, fiscal discipline, sustained growth and moderate inflation. This is the result of conscious choices we have made even in times of uncertainty and disruptions,” said Sitharaman.

She asserted that keeping Aatmanirbharta as a guiding principle, the government has strengthened domestic manufacturing capacity, ensured energy security and reduced critical import dependencies. She added that these measures have delivered a high growth rate of around 7 per cent and enabled substantial strides in poverty reduction and improvement in the lives of the people.

“Keeping Aatmanirbharta as a lodestar, we have built domestic manufacturing capacity, energy security and reduced critical import dependencies. Simultaneously, we have ensured that citizens benefit from every action of the Government, undertaking reforms to support employment generation, agricultural productivity, household purchasing power and universal services to people. These measures have delivered a high growth rate of around 7% and helped us make susbstantial strides in poverty reduction and improvement in the lives of our people,” said Sitharaman.

She further stated that the NDA government has decisively and consistently chosen action over ambivalence and pursued far-reaching structural reforms, fiscal prudence and monetary stability, while maintaining a strong thrust on public investment.

“Our government has decisively and consistently chosen action over ambivalence, and we have pursued far-reaching structural reforms, fiscal prudence and monetary stability, while maintaining a strong thrust on public investment,” Sitharaman added.

Referring to global challenges, Sitharaman said India is facing an external environment in which trade and multilateralism are under strain. She emphasised that India will continue to take confident steps towards Viksit Bharat by balancing ambition with inclusion.

“Today, we face an external environment in which trade and multilateralism are imperiled. And access to resources and supply chains are disrupted. New technologies are transforming production systems while sharply increasing demand on water, energy and critical minerals. India will continue to take confident steps towards Vikasit Bharat by balancing ambition with inclusion,” said Sitharaman. (ANI)