New Delhi: In a bid to reduce India’s reliance on China and strengthen its strategic autonomy in critical minerals, Finance Minister Nirmala Sitharaman on Sunday proposed the creation of dedicated rare earth corridors across four mineral-rich states in her Union Budget 2026-27 speech in Parliament.
The initiative, aimed at bolstering domestic capabilities in mining, processing, research and manufacturing of rare earth elements (REEs), will focus on Odisha, Kerala, Andhra Pradesh and Tamil Nadu, regions endowed with significant mineral reserves.
Rare earths — a group of 17 elements essential for high-end technologies such as electric vehicles, renewable energy systems, defence equipment and electronics — have long been dominated by China, which controls a large share of global output, particularly in refining and magnet production. This heavy concentration has left India and other nations vulnerable to supply disruptions, especially after Beijing tightened export controls in recent years.
In her address, Sitharaman noted that while the government launched a scheme for rare earth permanent magnets in November 2025, the latest proposal seeks to expand support by enabling states to develop corridors that integrate exploration with downstream technologies.
This marks a strategic shift from simply exporting raw materials to building a full domestic value chain for critical minerals.
The corridors are expected to attract investment in processing plants and research facilities, enhance the role of state and private players, and create jobs in the chosen states, which also happen to be key in the run-up to state elections later this year.
The move aligns with broader government efforts — including the National Critical Mineral Mission — to nurture self-reliance in sectors long dominated by China, which currently has a stranglehold over rare earth processing and output.