New Delhi [India], February 1 (ANI): Finance Minister Nirmala Sitharaman on Saturday announced that the Centre will support mineral-rich states—Odisha, Kerala, Andhra Pradesh and Tamil Nadu—to establish dedicated Rare Earth Corridors, as part of the Union Budget 2026–27.
Presenting the Budget, Sitharaman said the corridors will promote mining, processing, research and manufacturing of rare earth elements and permanent magnets, which are critical for advanced manufacturing sectors. “We now propose to support the mineral-rich states of Odisha, Kerala, Andhra Pradesh and Tamil Nadu to establish dedicated rare earth corridors,” she said.
The announcement builds on the Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnet (REPM), approved by the Union Cabinet in November 2025 with a financial outlay of Rs 7,280 crore. The scheme aims to establish 6,000 metric tonnes per annum (MTPA) of integrated REPM manufacturing capacity in India, covering the full value chain from rare-earth oxides to finished magnets.
To strengthen domestic capability, the Finance Minister also proposed setting up high-tech tool rooms by central public sector enterprises at two locations. These will function as digitally enabled automation service bureaus to locally design, test and manufacture high-precision components at scale and at lower cost. Additionally, a scheme to enhance construction and infrastructure equipment manufacturing will be introduced to boost domestic production of high-value and technologically advanced equipment.
In her speech, Sitharaman further announced an outlay of Rs 40,000 crore for electronics components manufacturing, citing strong momentum under the existing Electronics Components Manufacturing Scheme launched in April 2025.
She also said that India Semiconductor Mission (ISM) 1.0 has expanded the country’s semiconductor capabilities, and the government will now roll out ISM 2.0 to produce semiconductor equipment and materials, develop full-stack Indian intellectual property, and strengthen supply chains.
Union Minister for Electronics and Information Technology Ashwini Vaishnaw welcomed the Budget announcement, calling rare earths, critical minerals and permanent magnets “a very important part of the manufacturing sector today.” He said the establishment of rare earth corridors would help India develop a robust rare-earth permanent magnet manufacturing industry and drive sustained economic growth.
“Establishing a rare-earth permanent magnet corridor across coastal areas will help us develop a rare-earth permanent magnet manufacturing industry, which will drive sustained growth for our country,” Vaishnaw told ANI, adding that boosting capacity for critical minerals is a prime national focus.
The government has also clarified that India is not dependent on China for rare earths found in Beach Sand Minerals (BSM), the principal source of rare earths in the country. Monazite, a key mineral in BSM, contains rare earth elements along with uranium and thorium.
IREL (India) Limited, a PSU under the Department of Atomic Energy, produces high-purity rare earth oxides from monazite and operates integrated mining and processing facilities at three locations. IREL has also operationalised a Rare Earth Permanent Magnet plant at Visakhapatnam for producing Samarium Cobalt magnets and established mini plants at the Rare Earth & Titanium Theme Park in Bhopal for Lanthanum, Cerium and Neodymium metals.
In addition, IREL has set up a Rare Earth Element recycling plant at Bhopal to recover magnetic rare earths from end-of-life magnets, strengthening India’s rare earth value chain.
The REPM manufacturing scheme envisages five beneficiaries selected through global competitive bidding, using a transparent Least Cost System. The incentive structure includes a Sales-Linked Incentive of Rs 6,450 crore and a Capital Subsidy of Rs 750 crore.
Union Minister of State for Science and Technology Jitendra Singh told the Rajya Sabha that the scheme will reduce import dependence in strategic sectors such as electric mobility, renewable energy, electronics and defence, while also generating employment and strengthening domestic supply chains.
Finance Minister Sitharaman presented her ninth consecutive Union Budget in Parliament on Saturday, a day after tabling the Economic Survey 2025–26, which projected India’s real GDP growth for 2026–27 at 6.8–7.2 per cent and reported the lowest average CPI inflation since the series began, at 1.7 per cent during April–December 2025. (ANI)
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