Budget 2026: Strategic push for manufacturing across biopharma, semiconductors and rare earths

The Union Budget 2026-27, presented by Finance Minister Nirmala Sitharaman in Parliament today, unveiled a comprehensive plan to position India as a manufacturing powerhouse across seven strategic and frontier sectors, ranging from biopharma and semiconductors to textiles and sports goods. 

Among the key highlights is the launch of Biopharma SHAKTI, a ₹10,000 crore initiative over five years aimed at building India into a global hub for biologics and biosimilars. The programme includes setting up three new National Institutes of Pharmaceutical Education and Research (NIPERs), upgrading seven existing ones, and establishing a network of over 1,000 accredited clinical trial sites. It also proposes strengthening the Central Drugs Standard Control Organisation with a dedicated scientific review cadre. 

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In a significant step to reinforce India's chipmaking capabilities, the Budget introduced India Semiconductor Mission (ISM) 2.0. The mission will focus on building full-stack Indian intellectual property (IP), producing equipment and materials locally, and developing resilient supply chains. A key feature is the promotion of industry-led research and training centres to grow a skilled semiconductor workforce. 

To capitalise on momentum in electronics, the Electronics Components Manufacturing Scheme, originally launched in April 2025 with a ₹22,919 crore outlay, has now been allocated ₹40,000 crore. 

The Budget also addresses the need for rare earth minerals vital to high-tech manufacturing. A new scheme will establish Rare Earth Corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu to boost mining, processing, and manufacturing capabilities. 

To reduce chemical import dependency, a scheme to support three dedicated Chemical Parks was proposed. These parks will be developed through a challenge route using a plug-and-play cluster model. 

In a move to support logistics and infrastructure, the government proposed a ₹10,000 crore Container Manufacturing Scheme to build a competitive domestic ecosystem. This complements the proposed Hi-Tech Tool Rooms, to be set up by CPSEs, aimed at manufacturing high-precision components locally. Additionally, a new scheme will enhance the domestic production of construction and infrastructure equipment (CIE), including tunnel-boring and firefighting tools. 

The textile sector, one of India’s largest employment generators, will benefit from an Integrated Programme comprising five components: 

1. National Fibre Scheme 
2. Textile Expansion and Employment Scheme 
3. National Handloom and Handicraft Programme 
4. Tex-Eco Initiative for sustainable textiles 
5. Samarth 2.0 to revamp skill development 

Furthermore, Mega Textile Parks will be set up in challenge mode to bring value addition to technical textiles, while the Mahatma Gandhi Gram Swaraj initiative will support rural artisans, khadi, and handicrafts through training, branding, and market linkages. 

Highlighting India’s potential in sports manufacturing, the Budget proposed a dedicated initiative for sports goods, promoting R&D and innovation in equipment design and material science.