Union Budget 2026 key highlights | Rare earth corridors, semiconductor mission, high-speed rail links

Basic customs duty exemptions and tariff cuts announced in the Budget are aimed at easing costs in sectors ranging from defence aviation and healthcare to nuclear power and clean energy

Union Finance Minister Nirmala Sitharaman in her Union Budget speech on Sunday announced a series of basic customs duty exemptions and tariff cuts. This is aimed at easing costs in sectors ranging from defence aviation and healthcare to nuclear power and clean energy.

Sitharaman said the government will provide basic customs duty exemptions on raw material imported for making aircraft parts used in maintenance, repair, or overhaul in the defence sector.

The Budget also proposes a duty exemption for parts of civilian training aircraft.

Track all the Union Budget 2026-27 updates here

Basic customs duty will be exempted on the import of sodium antimonate for use in the manufacture of solar glass, supporting clean energy and storage infrastructure.

She announced an extension of basic customs duty exemption on capital goods used for manufacturing lithium-ion cells for battery storage.

"I propose to extend the basic customs duty exemption given to capital goods used for manufacturing lithium-ion cells for batteries. Also, I propose to exempt basic customs duty on import of sodium anti Monet, for use in manufacturing of solar glass," she said in her Budget speech.

It is proposed to provide basic customs duty exemption to the import of capital goods required for the processing of critical minerals in India.

Customs duty on TV equipment, cameras and other instruments imported by a foreign film unit or TV team for shooting films to be removed from April 1.

Customs duty exemption removed

Government removes customs duty exemption on naphtha for use in fertilizers and metal parts used in manufacture of electrical insulators.

The Budget proposes to remove customs duty exemptions on coffee roasting/brewing/vending machines, CD-ROMs containing books or newspaper from February 2, Sitharaman said.

The government will also exempt duty on fish catch by Indian fishing vessels in exclusive economic zones or high seas.

Budget proposes to remove exemptions on customs duties on items manufactured in India or have negligible import, she added.

Three new All India Institute of Ayurveda

The Union Budget has proposed to set up three new All India Institute of Ayurveda.

The proposal was announced by Union Finance Minister Nirmala Sitharaman in her Budget speech on Sunday.

These institutions are aimed at boosting research, education, and healthcare capacity across the country.

Sitharaman also announced that the government will support five university townships in the vicinity of major industrial logistics centres.

In a series of announcements for the education sector in the budget, the Finance Minister said the Centre would upgrade Ayush pharmacies and drug testing labs, WHO (World Health Organization) Traditional Medicine Centre at Jamanagar, Gujarat.

She also proposed a loan-linked capital subsidy support scheme for veterinary colleges, hospitals, and diagnostics laboratories.

The Budget proposed that 50 per cent capacity will be increased in district hospitals by establishing emergency and trauma care centres.

She proposed loan-linked capital subsidy support scheme for veterinary collages, hospitals, diagnostics laboratories.

The Budget proposed to support of Indian Institute of Creative Technologies Mumbai for setting up content labs in 15,000 secondary schools.

Girls' hostel in every district

The Finance Minister said the government will set up of one girls' hostel in every district of the country. There are over 700 districts in the country.

Seven high-speed corridors

The Union Budget 2026-27 has proposed developing seven high-speed corridors between cities as growth connectors.

"In order to promote environmentally sustainable passenger systems, we will develop seven high-speed rail corridors between cities as growth connectors: Mumbai to Pune, Pune to Hyderabad, Hyderabad to Bengaluru, Hyderabad to Chennai, Chennai to Bengaluru, Delhi to Varanasi, Varanasi to Siliguri," she said.

According to the Finance Minister, the corridors are designed to strengthen connectivity across western, southern, and eastern India, while also linking technology hubs with manufacturing centres and major population clusters.

She announced a new dedicated freight corridor from Dankuni in East to Surat in West to promote environmentally sustainable movement of cargo.

20 new national waterways

The budget proposes to operationalise 20 new national waterways over the next five years.

Starting with National Waterways 5 in Odisha to connect mineral rich areas of Talcher and Angul and industrial centers like Kalinganagar to the ports of Paradip and Dhamra.

Training institutes will be set up as regional centers of excellence for development of required manpower for these waterways.

"This will benefit youth in the entire stretch of the waterways to train and acquire skills. Further, a ship repair ecosystem catering to inland waterways will also be set up at Varanasi and Patna," Sitharaman said.

Rs 10,000 crore investment in biopharma

The Union Budget 2026-27 proposes Rs 10,000 crore investment in biopharma over the next five years.

The Budget announced Semiconductor Mission 2.0 with a focus on producing equipment and materials designed for full-stack Indian IP.

The Budget proposes to set up Rs 10,000 crore to create champion SMEs.

Sitharaman proposed to top up Self Reliance India Fund with Rs 4,000 crore in FY27 to support MSMEs.

Chemical parks

She proposed setting up of three dedicated chemical parks to enhance domestic production, reduce import dependency.

The Finance Minister proposed to increase outlay on electronic manufacturing to Rs 40,000 crore in the FY27 budget.

Rare earth corridors

Sitharaman announced establishing critical mineral facilities to support mineral-rich States of Odisha, Kerala, Andhra Pradesh and Tamil Nadu.

"The scheme for rare earth permanent magnets was launched in November 2025. We now propose to support the mineral-rich states of Odisha, Kerala, Andhra Pradesh and Tamil Nadu to establish dedicated rare earth corridors to promote mining, processing, research and manufacturing," the finance minister said in her Budget speech on Sunday. 

High-tech tool rooms will be established at two locations to give push to capital goods manufacturing, said Sitharaman.

The Union Budget proposes interventions in six sectors, including manufacturing, strategic and frontier sectors, healthcare and advanced technology.