FM Proposes Rare Earth Corridor to Support Odisha, Kerala, Andhra Pradesh and Tamil Nadu to Promote Mining 

Delhi, February 1, 2026: Union Finance Minister Nirmala Sitharaman, while presenting the Union Budget 2026-27, announced the government’s proposal to establish dedicated rare earth corridors. This connects states like Odisha, Kerala, Andhra Pradesh, and Tamil Nadu. This move is aimed at strengthening India’s domestic capabilities in critical minerals. This would also help in reducing import dependence. 

The proposal builds on the rare-earth permanent magnets scheme launched in November 2025. It is intended to support mineral-rich states. This would be done through focused infrastructure and ecosystem development.

Budget Announcement And Policy Trigger 

In her Budget speech, Sitharaman said the government will extend targeted support. This would be done in states with rare earth mineral deposits to create organised corridors across the value chain. 

“A 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,” the Finance Minister said. 

The announcement comes amid rising global demand for critical minerals. This was driven by clean energy, advanced manufacturing, and new technologies. 

What The Rare Earth Corridors Aim To Achieve 

According to the Budget statement, the proposed corridors are intended to create an integrated network. This would cover mining, processing, research, and manufacturing of rare earth elements within the country. 

Rare earth elements are essential inputs for multiple sectors. These include electric vehicles, renewable energy systems, electronics, and defence equipment. Permanent magnets made from these minerals play a key role. This is specifically in high-efficiency applications and clean energy technologies. 

Why Odisha, Kerala, Andhra Pradesh And Tamil Nadu 

The four states identified for the corridors are known to have rare earth mineral deposits. This is particularly along coastal and mineral belts. They also have port infrastructure, industrial clusters, and existing logistics networks. These are considered supportive for the processing and movement of minerals. 

The corridors are expected to complement the rare earth magnet manufacturing initiative announced in 2025. This would be done by ensuring a more reliable domestic supply of raw materials. 

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