In a bold step to strengthen India’s strategic mineral supply chain, Finance Minister Nirmala Sitharaman announced in the Union Budget 2026-27 the creation of dedicated rare earth corridors across four mineral-rich states — Tamil Nadu, Kerala, Odisha, and Andhra Pradesh. Rare earth elements are crucial for modern technology, powering electric vehicles, consumer electronics, renewable energy systems, and defence equipment. Currently, China dominates global production, making India vulnerable to supply disruptions.
Budget 2026: Rare Earth Corridors in 4 States Announced
During her Budget speech, the Finance Minister said, “The scheme for rare earth permanent magnets was launched in November 2025. We now propose to support the mineral-rich states of Odisha, Kerala, Andhra Pradesh and Tamil Nadu to establish dedicated rare earth corridors to promote mining, processing, research and manufacturing.”
The initiative is designed to reduce India’s reliance on imported rare earth minerals and establish a domestic ecosystem for extraction, processing, and downstream manufacturing. With China controlling nearly 60% of global mine production and over 90% of refined rare earths, this move is expected to boost India’s self-reliance in high-tech and strategic sectors.
Budget 2026: How the Rare Earth Corridors Will Support Indian Industry?
The corridors aim to integrate mining, processing, manufacturing, and research infrastructure to make India globally competitive in critical minerals. Key features include:
- Mining & Exploration: Unlocking domestic deposits and ramping up extraction across the four states.
- Processing & Refining: Establishing plants to convert raw minerals into high-purity rare earth oxides and metals.
- Magnet & Component Production: Manufacturing permanent magnets and other components for EVs, renewable energy systems, and defence equipment.
- Research & Innovation Hubs: Enhancing R&D capabilities in extraction, sustainable processing, and advanced material development.
Industry analysts believe that these corridors will attract both domestic and foreign investment, strengthen supply chains, and create employment in mining, research, and manufacturing. They will also support India’s transition to a knowledge-based economy and reduce vulnerabilities in sectors dependent on rare earth materials.
Budget 2026 Pushes Strategic Self-Reliance Through Rare Earth Corridors
The corridors, part of the broader budgetary push, will integrate mining, refining, R&D and manufacturing for rare earths, reducing import dependence and ensuring stable supply chains. Sitharaman highlighted, “The scheme for rare earth permanent magnets was launched in November 2025.
We now propose to support the mineral-rich states of Odisha, Kerala, Andhra Pradesh and Tamil Nadu to establish dedicated rare earth corridors to promote mining, processing, research and manufacturing.” This allocation underlines the government’s focus on high-tech, future-ready industries while boosting economic resilience.
