Budget 2026: Tamil Nadu, AP, Kerala, Odisha to Get Rare Earth Corridor

Finance Minister Nirmala Sitharaman on Sunday announced a dedicated rare earth corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu.

Building upon the rare earth permanent magnet scheme launched in November 2025, Sitharaman announced a strategic move to support the states of Odisha, Kerala, Andhra Pradesh, and Tamil Nadu in creating integrated rare-earth ecosystems. These dedicated corridors will encompass the entire value chain-from mining and processing to research, development, and manufacturing of high-tech products.

This initiative is a decisive step towards reducing India's critical import dependence, particularly on China, and securing the raw materials essential for future industries like electric vehicles, defense systems, renewable energy, and consumer electronics.

The budget's industrial focus extends beyond rare earths. Sitharaman introduced a new scheme for the enhancement of Construction and Infrastructure Equipment (CIE), targeting the domestic manufacturing of high-value, technology-advanced machinery. This push is designed to indigenize production across a wide spectrum, from tunnel boring machines and lifts to sophisticated firefighting equipment, thereby strengthening the backbone of the nation's infrastructure development.

In a major boost to the healthcare and pharmaceuticals sector, the Finance Minister proposed 'Bio Pharma Shakti', a scheme with an ambitious outlay of ₹10,000 crores over the next five years. This initiative aims to develop India into a global bio-pharma manufacturing hub by creating a robust ecosystem for the domestic production of complex biologics and biosimilars, moving up the value chain from generic pharmaceuticals.

Sitharaman anchored her proposals in three core kartavyas (duties): accelerating and sustaining economic growth by enhancing productivity and competitiveness; fulfilling public aspirations and building citizen capacity; and ensuring equitable access to resources and opportunities for all communities and sectors, in line with the vision of 'Sabka Saath, Sabka Vikas'.

To achieve these goals, she outlined interventions in six critical areas: scaling up manufacturing in seven strategic sectors; rejuvenating legacy industries; creating champion MSMEs; delivering a renewed infrastructure push; ensuring long-term economic security; and developing city economic regions. These measures are built on the foundation of 'Aatmanirbharta' (self-reliance), which, she noted, has already helped build domestic manufacturing capacity, ensure energy security, and reduce critical import dependencies.

Acknowledging a challenging global environment where trade multilateralism is under strain and supply chains are disrupted, Sitharaman asserted that India would continue to take confident steps forward.

"As a growing economy with expanding trade and capital needs, India must also remain deeply integrated with global markets, exporting more and attracting stable long-term investment," she stated. The budget, she emphasized, builds on reforms that have delivered a high growth rate of around 7%, contributed to substantial poverty reduction, and improved the lives of citizens, aiming to make them "strong partners in India's path to prosperity."