Sitharaman Announces Rare Earth Corridors In 4 States, Including Tamil Nadu

Taking a big step to reduce India's dependence on China for rare earths, Finance Minister Nirmala Sitharaman announced that dedicated corridors will be set up for the minerals in four states - Tamil Nadu, Kerala, Odisha and Andhra Pradesh. 

"The scheme for rare earth permanent magnets was launched in November 2025. We now propose to support the mineral-rich states of Odisha, Kerala, Andhra Pradesh and Tamil Nadu to establish dedicated rare earth corridors to promote mining, processing, research and manufacturing," the finance minister said in her Budget speech on Sunday. 

Rare earths are a group of 17 elements that are crucial in everything from consumer electronics, like smartphones, to electric vehicles and even fighter jets. China has been dominating the industry and accounts for about 60% of global mine production and nearly 90% of refined production and rare earth magnet output. 

Countries across the world are, thus, dependent on China and have to deal with shortages when Beijing tweaks its export control policies. 

Apart from boosting India's production of rare earths, the decision carries political weight because Tamil Nadu and Kerala, two of the four states chosen for the dedicated corridors, will see elections later this year. 

The announcement is also part of the push to make India 'atmanirbhar', or self-reliant, which was stated by the finance minister as one of the key objectives of the Union Budget for 2026-27. 

Towards this end, Sitharaman also announced a Rs 40,000-crore outlay for semiconductors as part of the 'India Semiconductor Mission 2.0'. 

Apart from industry-led research and training centres for semiconductors, the minister said the mission "will focus on producing equipment and materials designed for full-stack Indian IP", or intellectual property.