Union Budget 2026–27

Context:

The Union Budget 2026–27, presented by Nirmala Sitharaman, announced a decisive push to scale up manufacturing in seven strategic and frontier sectors under the First Kartavya—accelerating and sustaining economic growth.
This marks a shift from assembly-led growth to deep manufacturing, emphasising technology depth, supply-chain resilience, and global competitiveness.

What is the Manufacturing Strategy in Budget 2026–27?

The Budget outlines a comprehensive industrial strategy to strengthen India’s manufacturing ecosystem across seven high-impact sectors, chosen for their role in:

• National and economic security
• Export competitiveness
• Employment generation
• Technological self-reliance

The seven sectors are:

1. Biopharma
2. Semiconductors
3. Electronics Components
4. Rare Earths
5. Chemicals
6. Capital Goods & Containers
7. Textiles and Sports Goods

Sector-Wise Budget Announcements and Analysis

1. Biopharma – Biopharma SHAKTI

Budget Provision

• Biopharma SHAKTI with an outlay of ₹10,000 crore over 5 years
• Objective: Position India as a global hub for biologics and biosimilars
• Key components:
  • 3 new and 7 upgraded NIPERs
  • Network of 1,000+ accredited clinical trial sites
  • Strengthening of Central Drugs Standard Control Organisation (CDSCO) with a dedicated scientific review cadre

2. Semiconductors – India Semiconductor Mission (ISM) 2.0

Budget Provision

• Launch of ISM 2.0
• Focus areas:
  • Semiconductor equipment and materials
  • Full-stack Indian intellectual property (IP)
  • Resilient and diversified supply chains

3. Electronics Components Manufacturing

Budget Provision

• Outlay increased from ₹22,919 crore to ₹40,000 crore
• Focus on:
  • Passive and active components
  • Sub-assemblies
  • Domestic value addition

4. Rare Earth Corridors

Budget Provision

• Development of Rare Earth Corridors in:
  • Odisha
  • Kerala
  • Andhra Pradesh
  • Tamil Nadu
• Covers:
  • Mining
  • Processing
  • R&D
  • Advanced manufacturing

5. Chemicals – Plug-and-Play Chemical Parks

Budget Provision

• 3 chemical parks through a challenge-based cluster model
• Features:
  • Plug-and-play infrastructure
  • Common effluent treatment
  • Shared logistics and utilities

6. Capital Goods & Containers

Budget Provision

• Hi-Tech Tool Rooms for precision manufacturing
• Capital Goods (CIE) Manufacturing Scheme
• ₹10,000 crore Container Manufacturing Scheme

7. Textiles & Sports Goods

Budget Provision

• Integrated Textile Programme with five components:
  1. National Fibre Scheme
  2. Textile Expansion & Employment Scheme
  3. National Handloom & Handicraft Programme
  4. Tex-Eco Initiative (sustainable textiles)
  5. Samarth 2.0 (skilling)
• Expansion of Mega Textile Parks
• Mahatma Gandhi Gram Swaraj Initiative
• Dedicated push for sports goods manufacturing and R&D