Union Budget 2026–27 Puts Manufacturing at the Core, Unveils Biopharma SHAKTI, Semiconductor Mission 2.0 and ₹40,000 Crore Electronics Push

New Delhi: Union Budget 2026–27 places a strong emphasis on scaling up manufacturing across seven strategic and frontier sectors, positioning industrial depth as a key pillar under the Budget’s First Kartavya—accelerating and sustaining economic growth.

Presenting the Budget in Parliament on Sunday, finance and corporate affairs minister Nirmala Sitharaman said the proposed interventions aim to enhance productivity, reduce import dependence, and strengthen India’s global manufacturing competitiveness.

Biopharma SHAKTI to build global manufacturing capability

To develop India as a global biopharma manufacturing hub, the Budget announced Biopharma SHAKTI, with an outlay of ₹10,000 crore over five years. The initiative will build an ecosystem for domestic production of biologics and biosimilars.

The strategy includes setting up three new National Institutes of Pharmaceutical Education and Research (NIPERs), upgrading seven existing institutes, and creating a network of over 1,000 accredited clinical trial sites. The Central Drugs Standard Control Organisation will be strengthened through a dedicated scientific review cadre to align approvals with global standards.

Semiconductor Mission 2.0 and electronics expansion

Building on the India Semiconductor Mission 1.0, the Budget announced India Semiconductor Mission 2.0, focused on producing semiconductor equipment and materials, designing full-stack Indian intellectual property, and fortifying supply chains. The emphasis will be on industry-led research and specialised training centres to develop technology and skilled manpower.

To capitalise on manufacturing momentum, the outlay for the Electronics Components Manufacturing Scheme has been proposed to be increased from ₹22,919 crore to ₹40,000 crore.

Rare earths, chemicals and capital goods

To support mineral-rich states including Odisha, Kerala, Andhra Pradesh and Tamil Nadu, the Budget proposed dedicated Rare Earth Corridors to promote mining, processing, research and manufacturing, particularly for permanent magnets and advanced materials.

A scheme has also been proposed to establish three dedicated Chemical Parks through a challenge-based, cluster-driven plug-and-play model, aimed at strengthening domestic chemical production and reducing import dependency.

To enhance capital goods capability, the Budget announced:

• Hi-tech tool rooms to be set up by CPSEs at two locations
• A Construction and Infrastructure Equipment (CIE) enhancement scheme for high-value, advanced equipment
• A ₹10,000 crore Container Manufacturing Scheme over five years to build a globally competitive ecosystem

Textiles, khadi and sports goods

For the labour-intensive textile sector, the Budget announced an integrated programme with five components, covering fibre self-reliance, cluster modernisation, handloom and handicraft integration, sustainable textiles, and upgraded skilling through Samarth 2.0. Mega Textile Parks will be set up in challenge mode with a focus on value addition in technical textiles.

The Budget also proposed the Mahatma Gandhi Gram Swaraj initiative to strengthen khadi, handloom and handicrafts through training, quality improvement, branding and global market linkages, benefiting rural youth and artisans under the One District One Product framework.

Recognising India’s potential in sports manufacturing, a dedicated initiative for sports goods was announced to promote manufacturing, research and innovation in equipment design and material sciences.