Transforming India's Future: Major boosts for Biopharma, Semiconductors, and Textiles in Budget 2026-27

The Union Budget 2026–27 emphasises scaling up manufacturing across seven strategic and frontier sectors. While presenting the Union Budget 2026–27 in Parliament today, Union Minister of Finance & Corporate Affairs Nirmala Sitharaman said that the proposed interventions fall under six focus areas under the ‘First Kartavya’ in the Budget.

To develop India as a global biopharma manufacturing hub, the Budget proposes Biopharma Shakti with an outlay of ₹10,000 crore over the next five years. This will build the ecosystem for domestic biologics and biosimilars production. The strategy, as envisaged in the Budget, will include a biopharma-focused network comprising three new National Institutes of Pharmaceutical Education and Research (NIPERs) and the upgrading of seven existing institutes.

It will also create a network of over 1,000 accredited India Clinical Trials sites. The Union Budget further proposes to strengthen the Central Drugs Standard Control Organisation (CDSCO) to meet global standards and faster approval timelines through a dedicated scientific review cadre and specialists.

To expand India’s semiconductor sector capabilities and build on India Semiconductor Mission (ISM) 1.0, the Budget proposes launching ISM 2.0 to produce equipment and materials, design full-stack Indian IP, and fortify supply chains. Sitharaman said the focus will be on industry-led research and training centres to develop technology and a skilled semiconductor workforce.

The Electronics Components Manufacturing Scheme, launched in April 2025 with an outlay of ₹22,919 crore, will see a significant expansion. The Union Budget 2026–27 proposes to increase the outlay to ₹40,000 crore, aiming to capitalise on rising investment momentum.

Under the Scheme for Rare Earth Permanent Magnets, the Budget proposes to support the mineral-rich states of Odisha, Kerala, Andhra Pradesh and Tamil Nadu in establishing dedicated Rare Earth Corridors to promote mining, processing, research and manufacturing.

To enhance domestic chemical production and reduce import dependency, the Finance Minister proposed launching a scheme to support states in establishing three dedicated Chemical Parks through the challenge route, based on a cluster-led, plug-and-play model.

In her Budget speech, Sitharaman stated that strong capital goods capabilities are a determinant of productivity and quality across sectors. 

Towards building this capacity, the Union Budget proposes Hi-Tech Tool Rooms to be established by CPSEs at two locations as digitally enabled automated service bureaus that locally design, test and manufacture high-precision components at scale and lower cost. A Scheme for Enhancement of Construction and Infrastructure Equipment (CIE) will also be introduced to strengthen domestic manufacturing of high-value, technologically advanced equipment.

This will cover a wide spectrum—from lifts in multi-storey apartments and fire-fighting equipment to tunnel-boring machines for metros and high-altitude roads. The Budget also proposes a Scheme for Container Manufacturing, with a budgetary allocation of ₹10,000 crore over five years, to build a globally competitive container manufacturing ecosystem.

For the labour-intensive textile sector, the Budget proposes an integrated programme with five components. These include the National Fibre Scheme for self-reliance in natural, man-made and new-age fibres; a Textile Expansion and Employment Scheme to modernise traditional clusters; a National Handloom and Handicraft Programme to strengthen artisan livelihoods; the Tex-Eco Initiative to promote sustainable and globally competitive textiles; and Samarth 2.0 to modernise the textile skilling ecosystem through industry–academia collaboration.

With a focus on value addition in technical textiles, the Union Budget also proposes setting up Mega Textile Parks through a challenge-based approach.

Further, the Budget proposes launching the Mahatma Gandhi Gram Swaraj initiative to strengthen khadi, handloom and handicrafts, improve global market linkages and branding, and streamline training, skilling and quality processes. This initiative is expected to benefit weavers, village industries, the One-District–One-Product initiative and rural youth.

During the Budget presentation, Sitharaman said India has the potential to emerge as a global hub for high-quality, affordable sports goods. To support this ambition, the Budget proposes a dedicated initiative for sports goods that will promote manufacturing, research and innovation in equipment design and material sciences.