Rare earths and data centres: India pushes local industry as global tensions rise

BBC News - WorldEN 4 min read 100% complete February 1, 2026 at 10:15 AM

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India's Finance Minister presented the annual budget for 2026-27, prioritizing fiscal restraint and increased infrastructure spending to support domestic manufacturing amid global uncertainties. The budget, announced on Sunday, projects a slight slowdown in GDP growth due to increased tariffs. Key initiatives include record infrastructure spending, higher defense outlays, and a push for manufacturing in strategic sectors like semiconductors, data centers, and rare earths. Dedicated corridors for rare earth minerals will be established in Tamil Nadu, Kerala, Andhra Pradesh, and Odisha, supported by a previously approved 73bn-rupee scheme. A second semiconductor mission was launched with a $436m outlay, and a tax holiday is proposed until 2047 for foreign cloud companies investing in Indian data centers.

Key Entities & Roles

Key Player Opposition Context

Tamil Nadu 40% Kerala 40% Andhra Pradesh 40% Odisha 40% Narendra Modi 50% United States 50% Donald Trump 60% Nirmala Sitharaman ×280% India ×6100%

Keywords

rare earths 90% indian budget 90% infrastructure spending 80% domestic manufacturing 70% fiscal restraint 70% data centres 70% semiconductors 70% strategic sectors 60% economic growth 60% geopolitical tensions 50%

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Positive

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BBC News - World

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90%

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India

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rare earths indian budget infrastructure spending domestic manufacturing fiscal restraint data centres semiconductors strategic sectors economic growth geopolitical tensions

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