Boost to metals & mining sector in FY27 budget signals self-reliant India: Experts

Finance Minister Nirmala Sitharaman, while presenting her 9th straight budget, proposed the setting up of dedicated corridors in mineral-rich states like Odisha and Tamil Nadu and import duty exemption on capital goods needed for processing critical minerals to boost mining and processing activities.

The Union Budget for FY27, presented on Sunday, charts a clear path to strengthen India's industrial and manufacturing ecosystem with a strong focus on developing the metals and mining sector, MSMEs, and exports, industry leaders said. Finance Minister Nirmala Sitharaman, while presenting her 9th straight budget, proposed the setting up of dedicated corridors in mineral-rich states like Odisha and Tamil Nadu and import duty exemption on capital goods needed for processing critical minerals to boost mining and processing activities. According to experts, the measures are expected to generate millions of skilled and semi-skilled jobs across the country. They said that the latest annual budget reflects continuity, stability and long-term strategic thinking at a time when global geopolitical and economic uncertainties are reshaping supply chains. The budget's emphasis on metals, mining, electric vehicles and textiles is expected to accelerate capacity creation, boost domestic manufacturing, and support sustainable industrial practices. Expansion in metals and mining is also expected to create downstream opportunities across heavy engineering, they said. ''Growth in metals and mining will drive demand for large industrial machinery. This will create skilled and semi-skilled jobs in rural areas, ensuring that industrial growth translates into inclusive development,'' said GEC Group Director Gurucharan Matharu. According to Malu Kamble, Managing Director of KEP Engineering, ''The boost to sectors like metals, mining, EVs and textiles is encouraging. However, these are highly water-intensive industries, and managing liquid industrial waste is critical. Creating value from wastewater through reuse and recovery will be essential for environmental protection and long-term sustainability.'' The focus on manufacturing and exports of finished goods is expected to benefit specialised engineering segments, said Dhirendra Sankhla, Director of Mother India Forming. ''India has the technology, engineering talent and manufacturing capabilities to lead globally in sheet metal cold-roll formed components. The Budget's export-oriented approach will help India move up the value chain and increase exports of high-value finished products,'' Sankhla said. The government's focus on MSMEs was described as a long-term structural reform. ''Scaling SMEs strengthens India's industrial backbone. It will create jobs, promote micro enterprises at the village level, and improve economic outcomes at the grassroots,'' Pavan Kaushik, Director and co-founder of Gurukshetra Consultancy, said. Overall, industry leaders said, the Budget, guided by the prime minister's vision and articulated by the finance minister, provides a strong direction for a 'New India' in a changing global order, with economic independence, diversified consumption, domestic manufacturing, job creation, and sustainability emerging as key national strengths. Besides proposing dedicated corridors in mineral-rich states like Odisha and Tamil Nadu, the annual budget for the coming financial year has also provided for an import duty exemption on capital goods needed for processing critical minerals with an aim to boost mining and processing activities. The announcement comes in the backdrop of the government's focus on domestic production of rare-earth and other critical minerals to reduce dependence on imports, as these resources are critical for electric vehicles, renewable energy, electronics, aerospace, and defence applications. In her budget speech, the finance minister said, ''It is proposed to provide basic customs duty exemption to the import of capital goods required for processing of critical minerals in India.'' She noted that a 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,'' she added. The finance minister also proposed a reduction in the customs duty on monazite under the critical mineral section to zero from the existing 2.5 per cent. Monazite, a phosphate mineral, serves as a primary ore for rare earth elements (cerium, lanthanum, neodymium) and radioactive thorium. In November 2025, the Union Cabinet had approved the 'Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets' with a financial outlay of Rs 7,280 crore.

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