Odisha, Kerala, Andhra, TN to have dedicated rare earth corridors

Finance Minister Nirmala Sitharaman on Sunday proposed support for mineral-rich states including Odisha, Kerala, Andhra Pradesh and Tamil Nadu to establish dedicated rare earth corridors. Announcing the proposal while presenting the Union Budget for 2026–27 in Parliament, Sitharaman said the initiative aims to strengthen domestic capacity in rare earth processing and manufacturing. The announcement builds on a scheme launched in November 2025 for rare earth permanent magnets. The government had earlier approved the Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnet, with a financial outlay of Rs7,280 crore. The scheme aims to establish 6,000 metric tonnes per annum of integrated rare earth permanent magnet manufacturing capacity in India, covering the entire value chain from rare earth oxides to finished magnets.

VIDEO | Finance Minister Nirmala Sitharaman says, "A proposal for creating a rare earth corridor would reduce our dependency on external sources."

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To further build rare earth and advanced manufacturing capacity, Sitharaman proposed setting up high-tech tool rooms by central public sector enterprises at two locations. These facilities will function as digitally enabled automation service bureaus, locally designing, testing, and manufacturing high-precision components at scale and at lower cost. The Finance Minister also announced that a scheme to enhance construction and infrastructure equipment will be introduced to strengthen domestic manufacturing of high-value and technologically advanced equipment. In addition, Sitharaman proposed an allocation of ₹40,000 crore for electronics components manufacturing. She said India’s Semiconductor Mission 1.0 has expanded the country’s semiconductor capabilities. Building on this, the government will launch Semiconductor Mission 2.0, focusing on equipment and materials production, development of full-stack Indian intellectual property, and strengthening supply chains.