11. Frontier Manufacturing and Strategic Sovereignty: Union Budget 2026-27

Union Budget 2026-27 centers on \'First Kartavya\' (Duty)—accelerating economic growth by scaling manufacturing in seven strategic and frontier sectors. The strategy emphasizes reducing import dependencies, fostering indigenous Intellectual Property (IP), and integrating India into high-value Global Value Chains (GVCs). • Biopharma SHAKTI: Launched with a ₹10,000 crore outlay over five years, this mission aims to establish India as a global hub for biologics and biosimilars. It includes setting up three new National Institutes of Pharmaceutical Education and Research (NIPERs) and creating a network of 1,000+ accredited clinical trial sites to meet global approval standards. • India Semiconductor Mission (ISM) 2.0: Moving beyond the foundations of ISM 1.0, this phase focuses on producing semiconductor equipment and materials domestically. The goal is to design \'full-stack Indian IP\' and build industry-led research centers, ensuring long-term strategic autonomy in the chip ecosystem. • Rare Earth Corridors: To break the global monopoly on critical minerals, dedicated corridors will be established in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu. These will promote the mining and processing of Rare Earth Elements (REEs), vital for permanent magnets used in Electric Vehicles (EVs) and defense technologies. • Chemicals and Container Manufacturing: The budget introduces a challenge-route scheme for three dedicated Chemical Parks on a plug-and-play model. Furthermore, a ₹10,000 crore scheme for Container Manufacturing aims to build a domestic fleet of 1 million TEUs (Twenty-foot Equivalent Units) to insulate Indian trade from global shipping disruptions. • Textile Sector Integration: A comprehensive 5-component Integrated Programme has been announced, featuring the National Fibre Scheme for self-reliance and Samarth 2.0 for industry-aligned skilling. To boost high-value technical textiles, Mega Textile Parks will be developed in a competitive \'challenge mode.\' • Mahatma Gandhi Gram Swaraj: This initiative targets the rejuvenation of Khadi, handlooms, and handicrafts. It focuses on global branding, market linkages, and streamlining quality processes to benefit rural artisans and the One District One Product (ODOP) initiative. Key Definitions • Biologics: Medicines made from living organisms (e.g., vaccines, gene therapies) which are more complex than traditional chemical drugs. • Sintered Rare Earth Permanent Magnets (REPMs): High-strength magnets essential for EV motors and wind turbines; currently a major import dependency. • Challenge Mode: A competitive funding mechanism where states or cities submit proposals, and the best-performing ones receive central support. • Plug-and-Play Model: Industrial infrastructure where basic utilities (water, power, connectivity) are pre-installed, allowing businesses to start operations immediately. Constitutional and Legal Provisions • Article 246 (Union List): The Union has exclusive power over \'Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest\' (Entry 52). • Atomic Energy Act, 1962: Currently regulates the mining of monazite-rich sands (for Rare Earths); REE corridors may necessitate regulatory updates to this Act. • NIPER Act, 1998: Provides the statutory framework for the National Institutes of Pharmaceutical Education and Research being expanded under Biopharma SHAKTI. • National Policy on Electronics (NPE) 2019: The guiding framework for the Electronics Components Manufacturing Scheme (ECMS), which saw its outlay hiked to ₹40,000 crore. Additional Keypoints for Analysis • Hi-Tech Tool Rooms: Proposed at two locations under CPSEs to serve as automated bureaus for designing and testing high-precision components locally. • CIE Scheme: Enhancement of Construction and Infrastructure Equipment (CIE) manufacturing to support indigenization of high-value machinery like tunnel-boring machines. • Sports Goods Hub: A dedicated initiative to utilize material sciences and innovation to capture the global high-quality sports equipment market. Conclusion The Budget 2026-27 represents a decisive pivot from \'low-value assembly\' to \'high-value innovation-led manufacturing.\' By targeting deep-tech sectors like Biopharma and Semiconductors alongside labor-intensive Textiles and Khadi, the government seeks to balance high-growth ambitions with mass employment. The success of these initiatives will hinge on the timely execution of the proposed \'Rare Earth Corridors\' and \'Chemical Parks.\'UPSC Relevance • GS Paper III: Indian Economy (Changes in industrial policy and their effects on growth); Science & Technology (Semiconductors, Biopharma); Infrastructure (Maritime and Textiles). • GS Paper II: Government policies and interventions (NIPER expansion, Mahatma Gandhi Gram Swaraj). • Prelims: Outlays of Biopharma SHAKTI and Container Manufacturing; locations of REE corridors; components of the Integrated Textile Programme.