Published: 3 February 2026PIB / Business Standard / IndiaTodayEconomy
Rare Earth Corridors Announced in Union Budget 2026-27; REPM Scheme Was Approved in November 2025
The Union Budget 2026-27, presented on February 1, 2026, announced Dedicated Rare Earth Corridors in Odisha, Kerala, Andhra Pradesh and Tamil Nadu for mining, processing, research and manufacturing to build secure critical mineral supply chains in India. Separately, the government had approved the ₹7,280 crore REPM (Rare Earth Permanent Magnets) Scheme in November 2025, targeting 6,000 MTPA production capacity, offering ₹6,450 crore in sales-linked incentives and ₹750 crore in capital subsidy to promote integrated value chains from rare earth oxides to finished magnets used in EVs, wind turbines, and defence equipment.
Official PIB material separately notes hard-rock rare-earth oxide resources in Gujarat and Rajasthan, but the Budget corridors are for Odisha, Kerala, Andhra Pradesh and Tamil Nadu. The Geological Survey of India (GSI) and RSMML (Rajasthan State Mines and Minerals Limited) are active in mineral prospecting in the state. RSMML is already India's largest producer of rock phosphate (Jhamarkotra mines, Udaipur).
India currently imports over 95% of its rare earth requirements from China. These initiatives aim to build domestic processing capacity and reduce strategic dependency — directly relevant to India's Make in India and Atmanirbhar Bharat goals.
0Mains angle
Q: Evaluate how the Union Budget 2026-27's Rare Earth Corridors and REPM Scheme, combined with Rajasthan's Aravalli rare-earth deposits, can reduce India's strategic import dependency on critical minerals.
Answer (50 words):
Union Budget 2026-27 announced Dedicated Rare Earth Corridors across Odisha, Andhra Pradesh, Tamil Nadu and Kerala plus a ₹7,280 crore REPM Scheme (₹6,450 crore incentives + ₹750 crore capital subsidy) targeting 6,000 MTPA magnets — directly relevant to Rajasthan's Aravalli monazite-bastnäsite deposits at Alwar, Sikar and Udaipur.
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Practice MCQ from this story
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Linked questionHard
What does REPM stand for in the context of the rare earth scheme announced in Budget 2026-27?
Explanation · Correct answer CREPM stands for Rare Earth Permanent Magnets, a critical component in electric vehicles, wind turbines, and electronics.
Frequently asked questions
What is the REPM Scheme announced in Union Budget 2026-27 and what is its allocation?
The Rare Earth Permanent Magnet (REPM) Scheme was announced in Union Budget 2026-27 with an allocation of ₹7,280 crore. It aims to build a domestic rare earth supply chain targeting 6,000 MTPA of permanent magnet production for EV, wind energy, and defence sectors.
What are Dedicated Rare Earth Corridors and why are they strategically significant?
Dedicated Rare Earth Corridors are specialized infrastructure pathways announced in Union Budget 2026-27 to facilitate the movement and processing of critical rare earth minerals. They are strategically significant because rare earths are essential for electric vehicles, wind turbines, and defence electronics — sectors where India seeks supply chain self-reliance.
Why is Rajasthan particularly relevant to the REPM Scheme and Rare Earth Corridors?
Rajasthan's Aravalli mountain range hosts significant rare earth mineral deposits, making it a direct beneficiary of the Dedicated Rare Earth Corridors and the ₹7,280 crore REPM Scheme announced in Union Budget 2026-27. The state stands to gain through mining activity, processing units, and employment generation.
What is the strategic importance of building a domestic rare earth supply chain in India?
China dominates global rare earth mining and processing, creating supply chain risks for countries dependent on imports. By building domestic supply chains through the REPM Scheme and Dedicated Corridors, India reduces its vulnerability to supply disruptions in critical sectors like EVs, renewable energy, and defence electronics.
What is the production target set under the REPM Scheme and for which industries?
The REPM Scheme targets 6,000 MTPA (metric tonnes per annum) of rare earth permanent magnet production. The primary end-use industries are electric vehicles, wind turbines, and defence electronics, all of which depend heavily on rare earth-based permanent magnets.
