Finance Minister Nirmala Sitharaman’s Union Budget 2026 placed a clear spotlight on southern India, with targeted initiatives for poll-bound Kerala and Tamil Nadu, alongside Andhra Pradesh and Odisha. Presented on a Sunday for the first time in India’s fiscal history, the Budget also marked a personal milestone for Sitharaman as she delivered her ninth consecutive financial roadmap in Parliament.
Unveiling the Budget at 11 am in the Lok Sabha, Sitharaman outlined measures aimed at sustaining economic growth, maintaining fiscal discipline, and advancing structural reforms to cushion the economy against global trade uncertainties, including potential tariff pressures from the United States.
Budget 2026: Focus On Rare Earth Corridors In The South
One of the key announcements was a renewed push to strengthen India’s rare earth ecosystem, with a clear geographical emphasis on southern and eastern states. Sitharaman highlighted that groundwork for this initiative had already begun last year.
Nirmala Sitharaman said: “The scheme for rare earth permanent magnets was launched in November 2025. It supports Odisha, Kerala, Andhra Pradesh, and Tamil Nadu in establishing dedicated rare earth corridors.”
The move is significant as rare earth permanent magnets are critical components for electric vehicles, renewable energy systems, electronics, and defence technologies. By backing state-specific corridors, the Centre aims to reduce import dependence and position India as a competitive player in strategic mineral processing.
What Is Rare Earth Corridors?
Rare earth corridors refer to strategic supply chains and partnerships created to secure the mining, processing, transport and trade of rare earth elements. These corridors link resource-rich regions with manufacturing hubs through dedicated infrastructure, logistics routes and trade agreements. They are aimed at reducing dependence on China, which currently dominates rare earth production and processing.
Countries such as India, the US, the EU and Australia are developing rare earth corridors to ensure stable access to these minerals amid rising geopolitical and economic competition.
Big Bets On Biopharma & Semiconductors
Budget 2026 also announced major allocations for sunrise sectors. Sitharaman introduced Biopharma Shakti, a programme with an outlay of ₹10,000 crore over five years, designed to strengthen India’s pharmaceutical and biotechnology capabilities.
Alongside this, ISM 2.0, the second phase of India’s Semiconductor Mission, was launched to accelerate domestic chip manufacturing and deepen the electronics value chain. These initiatives are expected to generate high-skilled jobs, attract private investment, and enhance India’s technological self-reliance.
The focus on advanced manufacturing and innovation aligns with the government’s broader strategy to future-proof the economy amid slowing global growth and shifting supply chains.
