The Union Budget 2026–27 places manufacturing at the centre of its growth strategy, announcing measures across seven strategic and frontier sectors under the ‘First Kartavya’ framework.
To expand biopharmaceutical manufacturing, the Budget proposes Biopharma SHAKTI with an outlay of ₹10,000 crore over five years. The programme aims to strengthen domestic production of biologics and biosimilars through three new National Institutes of Pharmaceutical Education and Research, upgrades to seven existing institutes, a network of over 1,000 accredited clinical trial sites, and capacity enhancement of the Central Drugs Standard Control Organisation through dedicated scientific review cadres.
For semiconductors, the Budget announces India Semiconductor Mission 2.0, building on ISM 1.0. The new phase will focus on producing equipment and materials, developing full-stack Indian intellectual property, strengthening supply chains, and setting up industry-led research and training centres to build skilled manpower.
The Electronics Components Manufacturing Scheme, launched in April 2025 with an outlay of ₹22,919 crore, will see its allocation increased to ₹40,000 crore to support expansion in component manufacturing.
To support domestic availability of critical minerals, the Budget proposes Rare Earth Corridors in Odisha, Kerala, Andhra Pradesh and Tamil Nadu to promote mining, processing, research and manufacturing of rare earth materials, including permanent magnets.
In chemicals, a new scheme will support states in setting up three dedicated chemical parks through a challenge-based, cluster-driven, plug-and-play model to reduce import dependence.
The Budget also proposes setting up Hi-Tech Tool Rooms by central public sector enterprises at two locations as digitally enabled service bureaus for design, testing and manufacturing of high-precision components. A Scheme for Enhancement of Construction and Infrastructure Equipment will be introduced to boost domestic manufacturing of high-value equipment such as lifts, fire-fighting systems and tunnel-boring machines.
Also Read: Budget 2026–27 outlines three kartavyas for growth, capacity building and inclusion
A Container Manufacturing Scheme with a budgetary allocation of ₹10,000 crore over five years has been proposed to build a domestic, globally competitive container manufacturing ecosystem.
For textiles, an Integrated Programme with five components has been announced: a National Fibre Scheme covering natural, man-made and new-age fibres; a Textile Expansion and Employment Scheme for modernising clusters; a consolidated National Handloom and Handicraft Programme; the Tex-Eco Initiative for sustainable textiles and apparel; and Samarth 2.0 to upgrade skilling through industry and academic partnerships. The Budget also proposes setting up Mega Textile Parks in challenge mode to support technical textiles.
The Mahatma Gandhi Gram Swaraj initiative will be launched to strengthen khadi, handloom and handicrafts through streamlined training, skilling, quality support and global market linkages, benefiting village industries, the One District One Product programme and rural youth.
In sports manufacturing, the Budget proposes a dedicated initiative for sports goods to support domestic production, research and innovation in equipment design and material sciences.
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