Budget 2026–27: India to Create Rare Earth Corridors in Four States to Secure Critical Minerals

As India aggressively pushes toward zero-emission electric vehicles, the country aims to build its own rare-earth reserves and move toward self-reliance. The country will set up dedicated Rare-Earth corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu as part of a renewed push to secure critical minerals essential for high-technology manufacturing, Finance Minister Nirmala Sitharaman said in the Union Budget for 2026–27.

Curbs on rare earth materials from China in 2024-2025 affected supplies, disrupting local electric vehicle production. To derisk the nation in the long term, the government has announced that these corridors will span the full value chain, from mining and processing to research and manufacturing, to reduce India’s dependence on imports and build domestic capability in materials that are increasingly strategic for electronics, semiconductors, electric vehicles, and clean-energy systems.

The announcement follows the government’s rare earth permanent magnet scheme, launched in November 2025, and reflects growing concern about the global concentration of rare earth supply and rising geopolitical risks.

Sitharaman said, “The Centre will work with mineral-rich states to develop cluster-based, plug-and-play ecosystems, making it easier for private players to invest in rare earth processing and downstream manufacturing.”

Rare earth elements are critical inputs for high-performance magnets used in EV motors, wind turbines, and advanced electronics, and supply disruptions or export restrictions can have far-reaching industrial consequences.

By accelerating its push toward rare earth corridors alongside its semiconductor push, the government is ensuring that supply chain security, not just capacity creation, will be critical to India’s manufacturing strategy going forward.