Manufacturing momentum: Encouraging signs emerge in Uttar Pradesh

Looking forward, there are clear opportunities for further strengthening the manufacturing ecosystem in Uttar Pradesh

Once known predominantly for its agrarian economy and high population density, Uttar Pradesh seems to be making a strong push to foster industrial growth and secure investment in infrastructure, technology, and key industries. Foxconn’s reported proposal to set up a sprawling 300-acre manufacturing facility in Greater Noida would be a significant milestone in the state’s industrial expansion. This move — by one of the world’s largest electronics manufacturers, which is operating in South Indian states — in a way signals growing confidence in UP as an investment destination. GautamBuddha Nagar is now emerging as a hub for hi-tech manufacturing, bolstered by its proximity to Delhi and infrastructural support. Manufacturing is also expanding in other industries such as toys, automobiles, and cement. Encouragingly, investment is not confined to western UP. For instance, India’s first biopolymer manufacturing unit is being set up in Lakhimpur Kheri district. Recognising the overall potential, a defence industrial corridor is also being set up along the Bundelkhand-Rewa expressway and is estimated to attract investment worth ₹9,500 crore.

 

In 2023-24, the manufacturing sector in the state witnessed a growth rate of 13 per cent, exceeding the 7.5 per cent expansion in the state’s own gross domestic product. During the same year, manufacturing contributed 27 per cent to the state’s economy at current prices. Given UP’s abundant supply of affordable labour, a large rural population, and heavy dependence on agriculture, rapid industrialisation has the power to uplift millions. Job creation through manufacturing can absorb underemployed rural workers, reduce migration pressures on other states, drive inclusive growth, and help balance regional disparities in development. Small-scale manufacturing is also turning out to be an area of strength for the state. Not only does UP rank first in terms of the number of operational micro, small, and medium enterprise units, but the One District One Product (ODOP) scheme, introduced in 2018, has also played an important role in improving their market access and export competitiveness. Additionally, the state has the second-highest number of Geographical Indication (GI) tags in the country, which remains critical to revitalising traditional industries and artisan-based economies.

 

Looking forward, there are clear opportunities for further strengthening the manufacturing ecosystem in the state. Infrastructure upgrades, improvement in the ease of doing business, streamlined land acquisition, and quick clearances can bolster investor confidence. For sustained growth, it is also important for industrial expansion to integrate with the state’s large agrarian economy. The food-processing industry, in particular, stands out. According to the state’s Food Processing Industrial Policy 2022-27, of the 24,000 food-processing units in the state, only 6 per cent have an annual revenue exceeding ₹20 crore. With large agricultural output, UP can unlock enormous value by investing in agri-based industries and food-processing units, which would boost farmer incomes and reduce post-harvest losses.

 

From a broader policy perspective, a much-needed expansion in the industrial base in the country’s most populated state, which has been a laggard for decades, can help attain several policy objectives. If the trend continues, it will help substantially improve living standards in North India and balance growth and development in the country.