Budget 2026: FM Sitharaman Announces Major Semiconductor Push & Rare Earth Corridors To Boost Self-Reliance

Union Finance Minister Nirmala Sitharaman on Sunday began her ninth consecutive Union Budget speech in the Lok Sabha, marking another milestone in her political career. This is also the first Union Budget to be prepared at Kartavya Bhavan.

At the start of her speech, Sitharaman praised the Government of India's focus on "Yuva Shakti" and people-driven development. She outlined three key priorities of Budget 2026-27 - accelerating sustainable economic growth, fulfilling the aspirations of citizens by building their capacities, and ensuring inclusive development under the principle of Sabka Saath, Sabka Vikas.

Focus on Growth, Inclusion and Self-Reliance

The Finance Minister said the government remains committed to strengthening India's economic foundation while ensuring that growth benefits reach all sections of society. She highlighted efforts to boost domestic manufacturing, energy security and reduce dependence on critical imports, keeping Aatmanirbharta as the guiding principle.

According to Sitharaman, these measures have helped India maintain a growth rate of around 7 per cent and achieve meaningful progress in poverty reduction, employment generation and improvement in living standards.

'Biopharma Shakti' Announced With ₹10,000 Crore Outlay

A major announcement in the Budget was the launch of Biopharma Shakti, with an outlay of ₹10,000 crore over the next five years. Sitharaman said India is witnessing a shift towards non-communicable diseases such as diabetes, cancer and auto-immune disorders, increasing the need for advanced biological medicines.

She said the initiative aims to make India a global hub for bio-pharma manufacturing by supporting innovation, improving longevity-focused treatments and developing affordable medicines. Following the announcement, pharma stocks reacted positively, with Nifty Pharma and the BSE Healthcare Index rising between 1.7 and 2 per cent.

Semiconductor Push and Rare Earth Corridors

Sitharaman announced a fresh push for the semiconductor sector, proposing an additional ₹40,000 crore to strengthen capital support. She also unveiled plans for India Semiconductor Mission 2.0, with a focus on industry-led research and training centres to build a skilled workforce.

The Finance Minister also stressed the importance of rare earth permanent magnets. She said the government will support mineral-rich states such as Odisha, Kerala, Andhra Pradesh, Uttar Pradesh and Tamil Nadu by setting up dedicated rare earth corridors to promote mining, processing and research.

In talks woth Oneindia - Vinod Babu Bollikonda, Chief Executive Officer, Blue Cloud Softech Solution Ltd said, "The launch of India Semiconductor Mission (ISM) 2.0 and the ₹40,000 crore allocation under ECMS mark a decisive inflection point in India's journey from a semiconductor consumer to a global technology producer. These initiatives signal the government's clear intent to build deep, strategic capabilities across the semiconductor value chain.At Blue Cloud Softech, this vision strongly reinforces our long-term commitment to building sovereign, high-performance technology platforms from India, for the world. The mission's expanded focus on semiconductor equipment, advanced materials, and indigenous IP creation aligns directly with our core strategy.
This Budget provides the right policy momentum and economic tailwinds to accelerate our domestic fabrication and advanced packaging roadmap, and to help build a globally competitive semiconductor ecosystem anchored in India."

Support for MSMEs, Textiles and Rural Economy

To strengthen small businesses, Sitharaman proposed reviving 2,000 industrial clusters and announced a ₹10,000 crore MSME Growth Fund. She also proposed the setting up of mega textile parks to boost employment and exports in the textile sector.

In a move aimed at rural development, the Finance Minister introduced the Mahatma Gandhi Gram Swaraj initiative to strengthen Khadi and handloom activities. She said the initiative would help promote local crafts and create sustainable livelihoods in villages.

In an exclusive discussion with - Anuj Mundhra, Founder, Chairman & Managing Director, Nandani Creation Limited (Brand Jaipur Kurti) said, "FM Sitharaman's textile blueprint brings revolutionary changes to the textile industry."

Mundhra added, "The outdated clusters need modernization through the Textile Expansion Scheme which will create competitive hubs for Indian textile operations because the country operates machinery that exceeds 25 years of age. The implementation of Samarth 2.0 will solve our 15 million skilled worker shortage problem. The mega textile parks will generate investments exceeding ₹50,000 crore while they will achieve a 25-30% reduction in logistics expenses. The Mahatma Gandhi Gram Swaraj Initiative offers support to 8 million khadi and handicraft artisans because their work plays a vital role in driving our economic development. India holds only 5% of global textile trade despite being the world's largest cotton producer. The implementation of these strategies will enable us to achieve a 10% market share increase which will create 10 million new employment opportunities within the next five years. This unified strategy enables India to emerge as a legitimate competitor in the international marketplace."

New Push for Container Manufacturing

Sitharaman also proposed a new scheme for container manufacturing, with a capital outlay of ₹10,000 crore over the next five years. The move is expected to reduce dependence on imports and support India's logistics and manufacturing ecosystem.

As Budget 2026-27 unfolds, the government's focus remains on growth-led development, self-reliance, and inclusive progress, with several sectors receiving targeted support to drive India's long-term economic journey.