Budget 2026 Unveils Targeted Manufacturing Push Across Seven Strategic Sectors
The government has unveiled a comprehensive manufacturing strategy centered on seven strategic and frontier sectors, positioning them as key drivers for job creation, domestic value addition, and long-term industrial competitiveness. Presenting the proposals, Finance Minister Nirmala Sitharaman emphasized that the strategy is anchored in accelerating economic growth through focused industrial interventions.
"Under our first kartavya to accelerate and sustain economic growth, I propose interventions in six areas, including scaling up manufacturing in seven strategic and frontier sectors," she stated during her Budget speech.
Seven Key Sectors Identified for Focused Scaling
The government has identified the following seven sectors for targeted manufacturing expansion:
- Biopharmaceuticals
- Semiconductors
- Electronics components
- Rare earth magnets
- Chemicals
- Capital goods manufacturing
- Textiles
Biopharma SHAKTI Programme with Rs 10,000 Crore Outlay
Announcing a major healthcare manufacturing push, the finance minister revealed the Biopharma SHAKTI initiative with an outlay of Rs 10,000 crores over the next five years. "To develop India as a global Biopharma manufacturing hub, I propose the Biopharma SHAKTI programme," she said.
The programme will focus on:
- Building domestic biologics and biosimilars manufacturing capacity
- Expanding pharmaceutical education infrastructure
- Creating a network of over 1,000 accredited clinical trial sites
Semiconductors: Expanding Mission to Full Supply Chain
Building on existing semiconductor initiatives, the government will launch ISM 2.0 to strengthen the complete supply chain. "We will launch ISM 2.0 to produce equipment and materials, design full-stack Indian IP, and fortify supply chains," Sitharaman announced.
The plan includes establishing industry-led research and training centres to build both technological capabilities and workforce expertise in this critical sector.
Electronics Components Manufacturing Gets Boost
The government will significantly expand support for electronics component manufacturing. "The Electronics Components Manufacturing Scheme already has investment commitments at double the target. We propose to increase the outlay to Rs 40,000 crore to capitalise on the momentum," the finance minister noted.
Rare Earth Magnets: Dedicated Corridors Planned
To develop domestic rare earth ecosystems, the government will support mineral-rich states through dedicated Rare Earth Corridors. "We propose to support dedicated Rare Earth Corridors to promote mining, processing, research and manufacturing," she explained.
Chemical Parks Through Cluster Model
To reduce import dependence in industrial inputs, the government will launch a new chemical manufacturing initiative. "We will launch a Scheme to support States in establishing three dedicated Chemical Parks on a cluster-based plug-and-play model," Sitharaman stated.
Capital Goods Manufacturing Support
The Budget outlines multiple measures to deepen industrial equipment manufacturing capabilities. "Strong capital goods capability is a determinant of productivity and quality across different sectors," the finance minister emphasized.
The plan includes:
- Establishing hi-tech tool rooms
- Providing construction and infrastructure equipment manufacturing support
- Creating a container manufacturing ecosystem with Rs 10,000 crore outlay over five years
Textiles: Integrated Programme for Job Creation
For labour-intensive job creation, the government has proposed a comprehensive textile push covering:
- Fibre self-reliance initiatives
- Cluster modernisation programmes
- Sustainability measures
- Skilling through Samarth 2.0 and Mega Textile Parks
Champion MSMEs: Growth Fund and Risk Capital Support
The government announced a targeted MSME growth financing strategy, recognizing MSMEs as "a vital engine of growth." The finance minister proposed a three-pronged approach to help them grow as 'Champions'.
Key initiatives include:
- Launching a Rs 10,000 crore SME Growth Fund to support high-potential MSMEs
- Incentivizing enterprises based on defined performance and scale criteria
- Topping up the Self-Reliant India Fund with Rs 2,000 crore to maintain micro enterprise access to risk capital
The overall manufacturing strategy reflects the government's broader reform direction. "The Reform Express is well on its way and will maintain its momentum to help us fulfil our kartavya," Sitharaman concluded, emphasizing the government's commitment to sustained economic transformation through strategic industrial development.
