New Delhi: Dedicated rare earth corridors in Odisha, Andhra Pradesh, Tamil Nadu and Kerala were proposed by Union finance minister Nirmala Sitharaman in her budget speech on Sunday.
This will reduce India’s dependence on imports and strengthen domestic capabilities in critical minerals.
The Centre would “support mineral-rich states to promote mining, processing, research and manufacturing of rare earth elements and permanent magnets”, which are crucial for clean energy, electronics, defence and electric mobility, Sitharaman said while presenting the Budget in Parliament.
“The budget proposes raising the Electronics Components Manufacturing Scheme outlay from 22,999 crores to 40,000 crores, alongside new initiatives such as ISM 2.0, rare earth corridors, and dedicated chemical parks,” she said.
The scheme for rare earth permanent magnets that was launched in November 2025 and the budget announcement builds up on that. Sitharaman said that the government now proposes to scale up support for states to establish dedicated corridors focused on the full value chain – from extraction to advanced manufacturing.
Rare earth minerals are a group of 17 elements used in high-tech products such as electric vehicle motors, wind turbines, smartphones, semiconductors, defence systems and precision electronics. India currently imports a significant share of its rare earth requirements, with China dominating global production and processing.
A large portion of the world’s rare earth refining capacity is controlled by China which has, in recent years, tightened export controls, raising concerns over supply disruptions for manufacturing economies like India.
The proposed corridors are aimed at building domestic capacity and insulating Indian industry from global supply shocks.
Both Kerala and Tamil Nadu have significant coastal mineral reserves, including monazite-rich sands that contain rare earth elements, making them central to India’s critical minerals strategy.
