Uttar Pradesh has launched new incentives under the Make in UP initiative to attract manufacturers, offering tax breaks, subsidies, and streamlined processes. The policy targets key sectors like electronics, textiles, and footwear, aiming to create jobs and reduce import dependency. With plug-and-play parks and single-window clearances, UP seeks to become a manufacturing hub, driving economic growth and global competitiveness.
UP’s Bold Push to Become India’s Manufacturing Powerhouse
In a strategic move to cement its position as a manufacturing hub, Uttar Pradesh (UP) has rolled out a series of incentives under its ambitious “Make in UP” initiative, aligning with the national Make in India campaign. Announced in 2025, these measures aim to attract both domestic and foreign manufacturers by offering financial benefits, infrastructure support, and regulatory ease, particularly in high-growth sectors such as electronics, textiles, footwear, and semiconductors.
The state government has introduced a comprehensive incentive package, including capital investment subsidies of up to 40% for new manufacturing units, with a cap of ₹30 crore (US$3.4 million) for sectors like drone manufacturing, as outlined in the Drone Promotion and Utilisation Policy 2025. Additionally, manufacturers can avail of income tax exemptions for the first few years of operation, GST benefits through input tax credits, and custom duty exemptions on imported machinery and raw materials used in production. Export-oriented units are eligible for duty drawbacks and benefits under the Export Promotion Capital Goods (EPCG) scheme, designed to enhance global competitiveness.
A key feature of the initiative is the development of plug-and-play industrial parks in cities like Agra, Kanpur, and Unnao, which are poised to become cluster hubs for industries such as footwear and leather. According to a recent announcement, the Footwear & Leather Policy 2025, backed by an ₹80-crore investment, is expected to generate over 22 lakh jobs through these hubs. These parks offer ready-to-use infrastructure, including power, water, and waste management systems, reducing setup costs and time for manufacturers.
To streamline operations, UP has implemented a single-window clearance system, enabling businesses to obtain all necessary approvals and licenses through an online platform. This initiative addresses long-standing bureaucratic hurdles, making it easier for companies to establish and scale operations. The state has also prioritized skill development, partnering with industry and academia to train a future-ready workforce in technologies like AI, robotics, and Industry 4.0 manufacturing systems.
The electronics sector is a major focus, with UP aiming to replicate India’s success in smartphone manufacturing, where the country has become the second-largest producer globally. The state is leveraging the national Production-Linked Incentive (PLI) scheme, which has already attracted over $17 billion in investments across 14 sectors since its launch in 2020. Local players like Dixon Technologies, which plans to meet 15% of India’s domestic electronics demand by FY26, are set to benefit from these incentives. The policy also supports semiconductor manufacturing, with UP exploring tailored incentives for chipmakers to complement the India Semiconductor Mission.
The initiative is part of a broader strategy to reduce reliance on imports, particularly from China, and boost exports. In 2025, India surpassed China as the top smartphone exporter to the US, driven by companies like Apple, which exported $6 billion worth of iPhones from India in Q1 FY25. UP aims to contribute significantly to this growth by expanding production in IT hardware, including laptops and tablets, and fostering local supply chains.
The state’s efforts are already showing results. Foreign Direct Investment (FDI) in India’s manufacturing sector has surged by 69% over the past decade, reaching ₹14,45,781 crore (US$165.1 billion), with UP emerging as a key destination. The Madhya Pradesh government’s drone policy and similar initiatives in Gujarat and Tamil Nadu indicate a competitive landscape, but UP’s strategic location, large workforce, and proactive policies give it an edge.
Industry leaders have welcomed the move. “The incentives and infrastructure support will significantly enhance UP’s attractiveness as a manufacturing destination,” said Prithvi Vachani, Executive Director at Dixon Technologies. However, challenges remain, including bureaucratic delays and the need for consistent policy implementation to sustain investor confidence.
Disclaimer: This article is based on recent news reports, government announcements, and industry insights available as of August 2025. Information is sourced from reputable publications like Reuters, The Economic Times, and India Briefing. Readers are advised to verify details with official government sources for the latest updates.