Budget 2026: India Strikes Back at China’s Pressure, Rare Earth Corridor Announced in Budget

New Delhi: Union Finance Minister Nirmala Sitharaman, while presenting Budget 2026, made an important announcement for the mineral and industrial sector of the country. The government has decided to set up special corridors for rare earth minerals in Odisha, Kerala, Tamil Nadu and Andhra Pradesh. Its objective is to make better use of the resources available in these states and to create a complete supply chain in the country. The government believes that this will strengthen India's position in the field of strategic minerals.

What is its purpose?

Its objective is to reduce the dependence of other countries on rare earth elements. Especially on China, which has the world's largest reserves. This step will promote mining, processing, research and manufacturing. The Rare Earth Permanent Magnet scheme, started in November 2025, will be taken forward.

What is the Rare Earth Corridor, and why is it important?

Rare earth elements are rare minerals. These are used in electronics, defence, electric vehicles and green energy. India imports most of its requirements. China has dominance. This creates risk in the supply chain. The corridor will increase domestic production. 

On which scheme is this announcement based?

The Rare Earth Permanent Magnet Scheme launched in November 2025. Now it is being taken forward. Research and production will be strengthened through the corridor. There will be self-reliance in strategic sectors. China's bullying will be curbed.

What does the Rare Earth Corridor mean?

Rare Earth Corridors will be industrial areas where facilities ranging from mining to processing and further manufacturing will be developed simultaneously. Instead of sending raw minerals out through these corridors, their processing and use within the country will be promoted. This will result in value addition in India itself and domestic industries will get a stable supply.

Why is the government putting so much emphasis on this initiative?

Rare earth minerals are an important part of modern technology. Their need is continuously increasing in sectors like electronics, electric vehicles, wind energy, defense equipment and semiconductors. At present, the global supply of these minerals is in the hands of a few selected countries. India is largely dependent on imports for its needs. The government wants to reduce this dependence and that is why domestic production and processing is being given priority.

Which states have been included in it?

The government has selected four states where availability of rare earth minerals is already known. Odisha has a large base of mineral resources. Monazite-like sand is found in the coastal areas of Kerala. Mineral belts exist in Andhra Pradesh while mineral processing and industrial infrastructure are already developed in Tamil Nadu. The construction of corridors in these states will also strengthen the regional economy.

What will be its impact in terms of industry and investment?

This decision will open new opportunities for companies related to mining and manufacturing. The confidence of domestic and foreign investors is expected to increase. The government's focus will be on infrastructure, research and technology so that industries can get long-term benefits. Along with this, new employment opportunities will also be created at the local level.

How does this announcement connect with other plans of the budget?

The government has already launched a scheme for rare earth permanent magnets. The new corridors will help in getting that plan off the ground. Budget 2026 also emphasizes semiconductors, green energy and advanced manufacturing. Rare earth corridors are considered to be the cornerstone of all these areas.

What will be the way forward?

The government has indicated that in the coming times, this sector will be supported at all three levels, policy, investment and technology. Corridors will be developed in a phased manner in collaboration with the states. It is believed that this step can make India a stronger and more reliable partner in the global supply chain.