Presenting the Union Budget 2026–27, Union Finance Minister Nirmala Sitharaman announced a major push to strengthen India’s strategic minerals and chemical manufacturing ecosystem, with focused support for mineral-rich states and reduced import dependence.
She said the government will build on the Rare Earth Permanent Magnet Scheme, launched in November 2025, by creating dedicated rare earth corridors across key states.
Rare earth corridors in mineral-rich states
The Finance Minister said Odisha, Kerala, Andhra Pradesh and Tamil Nadu will be supported to establish dedicated rare earth corridors to promote mining, processing, research and manufacturing. These corridors aim to create an integrated value chain for rare earth elements, which are critical for electronics, clean energy technologies, electric vehicles and defence applications.
She noted that the initiative will help India secure critical mineral supplies, reduce reliance on imports and position the country as a competitive global player in advanced materials and manufacturing.
Boost to domestic chemical production
To further cut import dependency, Sitharaman announced a new scheme to support states in setting up three dedicated chemical parks. These will be developed through a challenge route on a cluster-based, plug-and-play model.
The proposed chemical parks are expected to lower entry barriers for investors, improve logistics efficiency and encourage innovation in chemicals and allied sectors. Industry experts say this approach could significantly enhance domestic capacity while ensuring environmental and regulatory compliance.
Strategic and regional impact
Together, the rare earth corridors and chemical parks are expected to generate skilled employment, attract long-term investment and strengthen regional economies, particularly in coastal and mineral-rich states. The initiatives also align with India’s broader push for Aatmanirbharta in critical sectors.
Economists view these measures as timely, given global supply chain disruptions and growing competition for critical minerals and chemicals. As Budget 2026–27 unfolds, implementation and coordination with states will be key to realising the full potential of these strategic initiatives.