“The Uttar Pradesh government has committed ₹500 crore to fuel MSME growth, targeting small businesses with enhanced financial support, infrastructure, and digital initiatives. The move aligns with the state’s $1 trillion economy goal, focusing on job creation, export promotion, and rural entrepreneurship through schemes like ODOP and UP Mart Portal.”
Uttar Pradesh’s ₹500 Cr Push for MSME Expansion
The Uttar Pradesh government has unveiled a ₹500 crore initiative to propel the growth of Micro, Small, and Medium Enterprises (MSMEs), reinforcing the state’s position as a hub for small businesses. This financial allocation is part of a broader strategy to support over 90 lakh MSME units in the state, which contribute 14% to India’s total MSME count and account for 40% of the country’s exports. The funds will be channeled into enhancing infrastructure, improving access to credit, and promoting digital platforms to boost market reach and competitiveness.
A key component of this initiative is the continued emphasis on the One District One Product (ODOP) scheme, which promotes unique, GI-tagged products from each of Uttar Pradesh’s 75 districts. The scheme has already driven a surge in exports, with the state’s MSME exports rising from ₹88,967 crore to over ₹2 lakh crore since its launch. The government is also rolling out the UP Mart Portal, a digital platform designed to connect raw material suppliers, manufacturers, and vendors across 155 industrial clusters. This e-commerce marketplace, developed by the UP State Industrial Development Authority (UPSIDA), is expected to benefit over 50,000 industrial units by reducing logistics costs by an estimated ₹20,000 crore and fostering direct business-to-business transactions.
The ₹500 crore allocation will also support the creation of 15 new MSME-centric industrial zones across 11 districts, including Aligarh, Firozabad, and Prayagraj, spanning 765 acres. These zones aim to enhance manufacturing capabilities and create local job opportunities, aligning with the state’s target of achieving MSME exports worth ₹3 trillion in the next two to three years. The government’s focus on infrastructure development includes expanding the industrial land bank to 150,000 acres by the end of 2025, with 21,751 acres already acquired in the first half of FY25.
Financial support for MSMEs is being strengthened through schemes like the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), which has increased its credit guarantee cover from ₹5 crore to ₹10 crore. This enhancement is projected to unlock ₹1.5 lakh crore in additional credit over the next five years, enabling small businesses to access working capital and invest in expansion. Additionally, the Uttar Pradesh Micro, Small & Medium Enterprises Promotion Policy 2022 offers capital subsidies ranging from 10% to 25%, capped at ₹4 crore per unit, with special incentives for SC/ST and women entrepreneurs, including a 60% interest subsidy up to ₹25 lakh.
The state’s efforts are complemented by the Union Budget 2025-26, which has doubled MSME turnover thresholds and increased investment limits by 2.5 times. For instance, micro-enterprises now have an investment limit of ₹2.5 crore and a turnover limit of ₹10 crore, while small enterprises can invest up to ₹25 crore with a turnover limit of ₹100 crore. These revised classifications allow more businesses to qualify for MSME benefits, facilitating smoother transitions as they scale.
Uttar Pradesh’s MSME sector faces challenges, including limited access to finance, delayed payments, and a lack of skilled labor. The government is addressing these through initiatives like the MSME SAMADHAAN portal for resolving payment disputes and skill development programs tailored to industry needs. The state’s focus on digitalization, including platforms like UP Mart, aims to enhance market access, particularly for rural and women-led enterprises, which have seen significant growth under the ODOP scheme.
The ₹500 crore investment underscores Uttar Pradesh’s ambition to become a $1 trillion economy by 2030, with MSMEs as a cornerstone. The state’s leadership, under Chief Minister Yogi Adityanath, is prioritizing industrial growth, with events like the annual International Trade Show in Greater Noida showcasing UP’s MSME potential to global markets. With a credit potential of ₹2,91,690.72 crore assessed for 2024-25, a 175.82% increase from the previous year, Uttar Pradesh’s MSME sector is poised for transformative growth, driving job creation and economic inclusivity across the state.
Disclaimer: This article is based on recent news reports, government announcements, and data from reliable sources such as the Uttar Pradesh government, Invest UP, and media outlets like Business Standard and Economic Times. The information reflects the latest available data as of August 2025.