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Budget 2026: Rare earth corridors to come up in states
01 Feb 2026

Finance Minister Nirmala Sitharaman has announced the establishment of dedicated rare earth corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu.

The announcement was made during her Union Budget 2026-27 presentation on Sunday.

The proposed corridors are part of a larger effort to strengthen domestic capabilities along the entire rare earth value chain, from extraction to processing and manufacturing activities.

Boosting domestic production and reducing import dependence
Production enhancement

The rare earth corridors initiative is aimed at boosting domestic production and reducing import dependence.

India has huge reserves of rare earth elements, which are essential for electronics, renewable energy, defense equipment, and advanced manufacturing.

The government proposes to develop these resources domestically by creating dedicated infrastructure and industrial ecosystems in mineral-rich states.

Dedicated chemical corridors to be set up
Additional initiative

In addition to the rare earth corridors, Sitharaman also announced a scheme to support states in setting up three dedicated chemical corridors.

The initiative will be implemented through a challenge-based route, focusing on cluster-based development.

The objective of this measure is also to boost domestic chemical production and reduce import dependence, further strengthening India's industrial base.

Strategic importance of critical minerals
Geopolitical significance

The establishment of a dedicated corridor for critical minerals is particularly important given the current geopolitical scenario.

The control of rare and critical elements has become a strategic chokepoint, as highlighted by the Economic Survey.

It noted that metals like lithium, cobalt, nickel, copper, and rare earth elements have become new strategic chokepoints in shaping a low-carbon economy and influencing energy security, industrial competitiveness, and geopolitical power.