Finance Minister Nirmala Sitharaman proposed establishing dedicated rare earth corridors in Odisha, Andhra Pradesh, Tamil Nadu, and Kerala during her Union Budget 2026-27 presentation. This initiative supports mining, processing, research, and manufacturing of rare earth elements and permanent magnets in mineral-rich states.
Reducing Critical Mineral Import Dependence
Rare earth minerals—17 elements essential for clean energy, electronics, defense, EVs, wind turbines, and semiconductors—are predominantly imported, with China controlling global refining. These corridors develop full value chains from extraction to advanced manufacturing, insulating Indian industries from supply disruptions and export restrictions.
Building on November 2025 Momentum
The proposal expands the rare earth permanent magnets scheme launched in November 2025, scaling infrastructure for strategic self-reliance. Coastal states like Tamil Nadu and Kerala, rich in monazite sands, gain focused development, creating jobs and attracting investments ahead of assembly polls.
Broader Industrial Ecosystem Support
Complementing this, the Electronics Components Manufacturing Scheme outlay rises from ₹22,999 crore to ₹40,000 crore, alongside ISM 2.0 and three challenge-based chemical parks. These clusters follow plug-and-play models to boost domestic chemical production and secure supply chains for high-tech sectors.
