It’s a strategic move towards the Global Manufacturing hub.
The Union Budget 2026-27, presented by Finance Minister Nirmala Sitharaman on February 1, 2026, aims to transform India into a global manufacturing hub by emphasising seven strategic sectors, ramping up infrastructure, and strengthening MSMEs. The Budget focuses on moving from policy intent to capacity creation, supporting the “Make in India” initiative through a record ₹12.2 lakh crore capital expenditure (CapEx) push.
Here is a detailed breakdown of the key initiatives driving this new horizon in manufacturing:
Strategic and Frontier Sectors (Scaling Up)
The budget focuses on high-growth areas to build self-reliance and reduce import dependence, including:
- Biopharma SHAKTI: An outlay of ₹10,000 crore over 5 years to develop India as a global biopharma hub, including setting up and upgrading NIPERs.
- Electronics Component Manufacturing: Increased outlay to ₹40,000 crore.
- Semiconductors (ISM 2.0): Focusing on manufacturing equipment, materials, and full-stack Indian IP.
- Rare Earth Corridors: Dedicated corridors in specific states to promote mining and processing.
- Container Manufacturing: A 5-year, ₹10,000 crore scheme.
- Chemical Parks: Support for 3 dedicated Chemical Parks.
- Sports Goods Initiative: A new initiative to manufacture high-quality, affordable sports goods.
Of these, Biopharma, Electronics Component, Semiconductor and Chemicals parks are primarily aimed at Global Manufacturing to move to India.
MSME Support and “Champion” Creation
Support for MSMEs, recognised as the “backbone of employment,” includes:
- ₹10,000 Crore SME Growth Fund: To help high-potential MSMEs scale.
- Self-Reliant India Fund Top-up: An additional ₹2,000 crore for equity support.
- TReDS & Liquidity: Strengthening TReDS by mandating CPSE participation to address cash-flow issues.
- Corporate Mitras: A new cadre to assist MSMEs with regulatory compliance.
Key Infrastructure & Structural Reforms
Key initiatives include:
- Reviving industrial clusters and creating new freight corridors.
- A ₹20,000 crore outlay over 5 years for Carbon Capture, Utilisation, and Storage (CCUS).
- Simplifying customs tariff structures.
- Support for the textile sector through an integrated program.
Summary of Key Outlays (2026-27)
- Total CapEx: ₹12.2 Lakh Crore
- Electronics Manufacturing: ₹40,000 Crore
- Biopharma SHAKTI: ₹10,000 Crore (over 5 years)
- Container Manufacturing: ₹10,000 Crore (over 5 years)
- SME Growth Fund: ₹10,000 Crore
- Carbon Capture (CCUS): ₹20,000 Crore (over 5 years)
