Union Budget 2026: Rare earth corridors as India eyes chip circuit

The Budget proposed setting up dedicated rare earth corridors to promote mining, processing, research and manufacturing in mineral-rich states like Odisha, Kerala, Andhra Pradesh and Tamil Nadu. Rare earths are critical to India's semiconductor push, the most vital component in electronic devices. Chips are today among the most critical components in the global supply chain. The Budget also gave a push to the renewable energy sector. FM Nirmala Sitharaman in her Budget speech proposed extending existing basic customs duty exemption on imports of goods required for nuclear power projects, manufacturing lithium-ion cells for battery storage, sodium antimonate used in solar glass, and equipment for processing critical minerals. She also proposed excluding the value of biogas while calculating excise duty on blended CNG. The Budget proposals for 2026-27 assume significance against India's target of 500GW of non-fossil energy capacity by 2030. Govt has set a goal of reaching 100GW nuclear power capacity by 2047.The announcement comes on the heels of Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Bill, 2025, which opens the sector to private participation. By lowering input costs, the policy is expected to improve project economics, strengthen India's nuclear supply chain, and attract global original equipment manufacturers. Allocation for viability gap funding for battery storage projects was rai-sed five-fold to Rs 1,000 crore.