India’s federal budget for 2026–27 set out a wide-ranging package of measures aimed at expanding domestic manufacturing across strategic and frontier sectors, with new schemes, higher outlays and cluster-based interventions, Finance Minister Nirmala Sitharaman said in her budget speech to parliament on Saturday.
Presenting the proposals, Sitharaman said the government would scale up manufacturing in seven strategic and frontier sectors as part of its efforts to enhance productivity, competitiveness and supply-chain resilience. The manufacturing initiatives form part of the government’s broader economic growth strategy outlined in the budget speech.
Among the major announcements, the finance minister proposed Biopharma SHAKTI, with an outlay of ₹10,000 crore over five years, to develop India as a global manufacturing hub for biologics and biosimilars. The programme includes the establishment of three new National Institutes of Pharmaceutical Education and Research, the upgrading of seven existing institutes, and the creation of a network of more than 1,000 accredited clinical trial sites. The government also plans to strengthen the Central Drugs Standard Control Organisation through a dedicated scientific review cadre.
Building on the first phase of the India Semiconductor Mission, the budget proposed the launch of India Semiconductor Mission 2.0 to support manufacturing of equipment and materials, development of full-stack Indian intellectual property, and strengthening of semiconductor supply chains. The initiative also includes industry-led research and training centres to support workforce development.
In electronics manufacturing, Sitharaman said the outlay for the Electronics Components Manufacturing Scheme would be increased to ₹40,000 crore, from ₹22,919 crore announced earlier, citing investment commitments that have exceeded initial targets. The scheme aims to deepen domestic value addition in electronics manufacturing.
The budget also proposed measures to support critical materials and intermediate manufacturing. The government will support mineral-rich states to establish dedicated Rare Earth Corridors to promote mining, processing, research and manufacturing of rare earth permanent magnets. In the chemicals sector, the finance minister announced a scheme to establish three chemical parks through a challenge-based, cluster-oriented model to reduce import dependence.
To strengthen capital goods manufacturing, the budget proposed the establishment of hi-tech tool rooms by central public sector enterprises at two locations, designed as digitally enabled service bureaus for high-precision component manufacturing. A separate Construction and Infrastructure Equipment manufacturing scheme was also announced to support domestic production of high-value and technologically advanced equipment.
The finance minister further proposed a container manufacturing scheme with a budgetary allocation of ₹10,000 crore over five years, aimed at creating a globally competitive container manufacturing ecosystem.
For labour-intensive manufacturing, the budget outlined an integrated programme for the textile sector, covering fibre production, cluster modernisation, skilling and sustainability initiatives. The government also proposed setting up mega textile parks through a challenge mode, alongside a new initiative to strengthen khadi, handloom and handicrafts.
In addition, Sitharaman announced a dedicated initiative for sports goods manufacturing to promote domestic production, research and innovation, and a scheme to revive 200 legacy industrial clusters through infrastructure and technology upgrades.