The Union Budget 2026-27 places strong emphasis on scaling up manufacturing across seven strategic and frontier sectors, as the government seeks to strengthen India’s industrial base, reduce import dependence and position the country as a global manufacturing hub.
Presenting the Budget in Parliament on Sunday, Union Minister for Finance and Corporate Affairs Nirmala Sitharaman said the proposed manufacturing initiatives form part of the six focus areas under the “First Kartavya” outlined in the Budget framework.
Biopharma SHAKTI to Position India as Global Hub
To develop India as a global biopharma manufacturing centre, the Budget proposes Biopharma SHAKTI, with an outlay of ₹10,000 crore over the next five years. The initiative aims to build a comprehensive ecosystem for domestic production of biologics and biosimilars.
The programme includes setting up three new National Institutes of Pharmaceutical Education and Research (NIPERs) and upgrading seven existing institutes. It will also create a network of more than 1,000 accredited clinical trial sites across the country. The Central Drugs Standard Control Organisation (CDSCO) will be strengthened to meet global regulatory standards and approval timelines through a dedicated scientific review cadre.
India Semiconductor Mission 2.0 Announced
Building on the momentum of India Semiconductor Mission (ISM) 1.0, the Budget announces ISM 2.0, aimed at producing semiconductor equipment and materials, designing full-stack Indian intellectual property, and strengthening supply chains.
The focus will be on industry-led research and training centres to support technological development and create a skilled workforce in the semiconductor sector.
Electronics Components Manufacturing Gets Boost
The Budget proposes a major expansion of the Electronics Components Manufacturing Scheme, increasing its outlay from ₹22,919 crore to ₹40,000 crore, to capitalise on the growing momentum in electronics manufacturing and strengthen domestic value chains.
Rare Earth Corridors and Chemical Parks
To support mineral-rich states such as Odisha, Kerala, Andhra Pradesh and Tamil Nadu, the Budget proposes dedicated Rare Earth Corridors to promote mining, processing, research and manufacturing of rare earth permanent magnets.
In addition, a new scheme will support states in establishing three dedicated Chemical Parks through a challenge-based, cluster-driven, plug-and-play model, aimed at enhancing domestic chemical production and reducing import dependence.
Capital Goods and Container Manufacturing Push
Highlighting the importance of capital goods capability for productivity and quality, the Finance Minister announced the establishment of Hi-Tech Tool Rooms by CPSEs at two locations. These digitally enabled facilities will design, test and manufacture high-precision components at scale.
A Scheme for Enhancement of Construction and Infrastructure Equipment (CIE) will be introduced to strengthen domestic manufacturing of technologically advanced equipment, including lifts, firefighting equipment and tunnel-boring machines.
The Budget also proposes a Container Manufacturing Scheme with an allocation of ₹10,000 crore over five years, aimed at creating a globally competitive container manufacturing ecosystem.
Integrated Push for Textile Sector
For the labour-intensive textile sector, the Budget announces an Integrated Programme comprising five components:
* National Fibre Scheme for self-reliance in natural, man-made and new-age fibres
* Textile Expansion and Employment Scheme to modernise traditional clusters
* National Handloom and Handicraft Programme to strengthen artisan support
* Tex-Eco Initiative to promote sustainable and globally competitive textiles
* Samarth 2.0 to modernise textile skilling in partnership with industry and academia
To boost technical textiles and value addition, the Budget also proposes setting up Mega Textile Parks in challenge mode.
Mahatma Gandhi Gram Swaraj and Sports Goods Initiative
The Budget announces the Mahatma Gandhi Gram Swaraj initiative to strengthen khadi, handloom and handicrafts, with a focus on training, skilling, quality improvement, global market linkage and branding. The initiative is expected to benefit weavers, village industries, rural youth and the One District One Product (ODOP) programme.
Recognising India’s potential in sports manufacturing, the Budget proposes a dedicated sports goods initiative to promote manufacturing, research and innovation in equipment design and material sciences, with the aim of positioning India as a global hub for high-quality and affordable sports goods.
