Uttar Pradesh – Business Opportunities & Market Entry

Uttar Pradesh, the fourth largest state in India, is known for its population of approximately 200 million, its diverse business clusters, and its popular tourist attractions such as the Taj Mahal. The state plays a significant role in India's manufacturing sector, is a major exporter of electronic hardware, and has emerged as an IT/ITeS hub. It ranks high in terms of tourism and has a population of 228.96 million, making it the most populous state in India.

Top Industries

• Food Processing - Uttar Pradesh excels in agricultural production, being a leading producer of milk, food grains, sugarcane, potatoes, and fruits. The state has specialized business clusters for various food processing sectors, such as sports items in Meerut and leather goods in Kanpur. It is also a major exporter of processed frozen meat and has been diversifying into fish farming.
• Information Technology - Uttar Pradesh has established itself as an IT and ITeS hub, with Noida being a prominent IT cluster. The state ranks sixth in software exports and has attracted significant investments in the sector. It offers financial assistance for developing IT parks and has plans for multiple IT SEZs and parks. Renowned educational institutions in the state contribute to a skilled workforce.
• Textile and Handloom - Uttar Pradesh is the third-highest fabric-producing state in India and is known for handloom and textile clusters. It has GI-tagged products like silk sarees from Varanasi and carpets from Bhadohi. The state has a significant market for textiles and garments, with Gautam Budh Nagar being a major apparel exporter.
• Tourism - Uttar Pradesh is a popular tourist destination, attracting both domestic and international visitors. It is home to iconic attractions like the Taj Mahal and Varanasi, a major Hindu pilgrimage site. The state ranks highest in domestic tourist footfall and offers diverse tourism segments, including wellness, MICE, adventure, and eco-tourism.
• Renewable Energy - Uttar Pradesh aims to achieve 22,000 MW of solar power capacity and has seen growth in renewable energy. It has potential in biomass energy and is actively promoting energy efficiency. The state has implemented campaigns and schemes to increase awareness and incentivize energy-saving practices.
• Electronics Manufacturing - Uttar Pradesh is the largest exporter of consumer electronics in India. It has become a hub for the semiconductor industry, attracting major players. The state offers favourable investment opportunities, with expressways, industrial corridors, and multiple international airports. It has achieved significant investments in the electronics sector and houses numerous manufacturing units.

UTTAR PRADESH TEXTILE AND GARMENTING POLICY 2022

The proposed policy for the textile and handloom sector in Uttar Pradesh aims to transform the state into a global textile hub and attract investors. It offers a comprehensive range of incentives and facilities to entrepreneurs, encouraging investment, employment generation, and export promotion. These measures include capital investment subsidies of up to 40%, additional benefits for specific regions, stamp duty and land cost subsidies, exemptions from export subsidy and electricity duty, reimbursement for private textile park development, infrastructure development subsidies, energy-related incentives, employment generation subsidies, freight reimbursement for garment exports, incentives for the silk industry, support for youth entrepreneurship, and incentives for creating own brands and outlets. Through these provisions, the policy aims to create a favourable business environment, enhance competitiveness, and develop the textile sector in Uttar Pradesh. By attracting investments, promoting employment opportunities, and fostering export growth, the state aims to establish itself as a global destination for textile and handloom industries. This strategic focus on the sector is expected to contribute significantly to the economic growth and development of Uttar Pradesh, while positioning the state as a key player in the global textile market.

Uttar Pradesh Food Processing Industry Policy 2023

The new Food Processing Industry (FPI) policy introduced by the Uttar Pradesh government aims to boost the food processing sector in the state. The policy provides various incentives and support to attract investments and promote the export of processed food products. It offers subsidies for establishing and expanding food processing units, exemptions on land acquisition and conversion fees, stamp duty exemptions, and mandi fees exemptions. Additionally, disease-free certifications for specific crops, solar power subsidies, and freight subsidies for exports are available. The policy also includes infrastructure subsidies for cold chain and value addition, grants for agro processing clusters, support for backward and forward linkages, and interest subsidies for reefer vehicles and mobile pre-cooling vans. Furthermore, it promotes unified market access, supports agricultural start-ups, and provides grants for decentralized processing and storage projects. These measures aim to create a conducive business environment, reduce post-harvest losses, and enhance the competitiveness of the food processing industry in Uttar Pradesh. By incentivizing investment and providing necessary support, the policy seeks to stimulate growth, generate employment opportunities, and establish the state as a leading player in the food processing sector.

Uttar Pradesh Sports Policy 2023

Uttar Pradesh's new sports policy aims to foster a sports culture, support athlete development, and enhance sports infrastructure. The policy provides financial assistance to sports associations and academies, encourages public-private partnerships for infrastructure development, and establishes centres of excellence for specific sports. It also focuses on coach development, mapping sports facilities, and creating a State Sports Authority. Financial support is available through the State Sports Development Fund, and high-performance centres will be set up to train elite athletes. Health insurance coverage and an Eklavya Sports Fund for injury treatment are provided to registered players. The policy categorizes players based on skill level and emphasizes grassroots development, talent nurturing, and support for elite athletes representing the state. Overall, the policy aims to create an enabling environment for sports, nurture talent, and achieve excellence in sports within Uttar Pradesh.

Uttar Pradesh Warehousing and Logistics Policy 2022

The Uttar Pradesh Warehousing and Logistics Policy 2022 aims to create a favourable environment for trade and investment in the logistics sector. It focuses on developing high-quality infrastructure, optimizing supply chains, promoting sustainability, and establishing a supportive ecosystem. The policy offers incentives to attract investments and simplifies the clearance process through a single-window system. It allows 24/7 operations for warehouses, encourages female employment, and facilitates fast-track land allotment for logistics parks. Uttar Pradesh's strategic location adds to its attractiveness for logistics investments. Stakeholders should stay updated on the government's initiatives and guidelines to maximize the benefits of the policy.

Uttar Pradesh Export Promotion Policy 2020-25

The Export Policy of Uttar Pradesh 2020-25 aims to promote exports, support industries, and develop necessary infrastructure. It focuses on various sectors such as handicrafts, agriculture, engineering goods, textiles, and more. The policy includes the Uttar Pradesh Export Infrastructure Development Scheme to fund infrastructure facilities in cluster-based Special Economic Zones. It aligns with the goal of doubling farmer incomes and incorporates elements not covered by the Agriculture Promotion Policy. Overall, the policy aims to foster export growth, support industries, and contribute to the state's economic development.

Uttar Pradesh Solar Energy Policy 2022

The Uttar Pradesh Solar Energy Policy-2022 aims to promote solar energy generation and achieve a target of 22,000 MW of solar electricity in the next five years. It designates UPNEDA as the nodal agency for implementation. The policy offers land at nominal rates for solar power plants and provides incentives for solar rooftop installations. Exemptions are given for electricity duty, stamp duty, and environmental clearances for solar units. Ayodhya and 16 municipal corporations, including Noida, will develop as solar cities, meeting a minimum of 10% of their energy demand through solar power. Financial assistance and training opportunities are provided for maintenance and employment in the solar sector. Overall, the policy focuses on promoting solar energy, increasing capacity, and creating a sustainable and renewable energy ecosystem in Uttar Pradesh.

Best Locations to Set Up Business in Uttar Pradesh

• Noida: Robust infrastructure, multinational companies, business-friendly environment.
• Lucknow: Capital city, rapid development, IT, manufacturing, education, healthcare, tourism.
• Greater Noida: Well-planned industrial and commercial areas, world-class infrastructure, skilled workforce.
• Ghaziabad: Strong industrial base, manufacturing, engineering, affordable real estate, good connectivity.
• Kanpur: Major industrial city, leather and textile industries, skilled labor, good connectivity.
• Agra: Famous tourist destination, handicrafts, leather industry, supportive business environment.
• Varanasi: Cultural and spiritual hub, silk weaving industry, emerging business opportunities.
• Allahabad (Prayagraj): Educational and administrative center, Kumbh Mela, opportunities in education, healthcare, tourism.
• Sahibabad: Industrial hub, manufacturing units, engineering, textiles, chemicals.
• Meerut: Emerging business destination, manufacturing, sports goods, handloom.
• Moradabad: Brassware industry, export hub for handicrafts, well-developed infrastructure.
• Bareilly: Growing business center, textile, hosiery, handloom.
• Gorakhpur: Commercial and trading center, agriculture, agro-processing, trading.
• Aligarh: Lock and hardware industry, small and medium-sized enterprises, brassware, handicrafts.
• Mathura: Religious and cultural center, tourism, hospitality, religious tourism-related services.
• Kanpur Dehat: Agricultural productivity, agro-processing, sugar mills.
• Jhansi: Historical city, transportation, logistics, logistics, transportation, trading.
• Sultanpur: Agricultural district, agro-based industries, processing, packaging.
• Rampur: Traditional and artistic heritage, handicrafts, wood carving, metalwork.
• Muzaffarnagar: Sugar and steel industries, sugarcane production, sugar mills, distilleries.
• Faizabad (Ayodhya): Holy city, pilgrimage center, tourism, hospitality, religious tourism.
• Barabanki: Agricultural productivity, agro-based industries, food processing, agricultural machinery.

Business Clusters in Uttar Pradesh

• Noida and Greater Noida: Software Technology Parks, IT parks, multinational companies.
• Kanpur: Leather goods cluster
• Moradabad: Brassware cluster
• Bhadohi-Mirzapur: Carpet cluster
• Varanasi: Textile cluster
• Saharanpur: Agro-based industries cluster, wood and furniture manufacturing
• Khurja: Ceramic cluster
• Agra-Mathura: Food processing cluster, dairy sector
• Firozabad: Handicrafts cluster, glass and bangle industry
• Aligarh: Electrical goods cluster, locks and hardware
• Meerut: Paper and packaging cluster
• Panki-Kanpur: Chemical cluster
• Bareilly: Agricultural implements cluster
• Ghaziabad: Plastic products cluster
• Lucknow: Pharmaceuticals cluster
• Greater Noida: Auto component cluster
• Mau: Handloom cluster
• Allahabad-Prayagraj: Jute and textile cluster
• Barabanki: Food processing cluster
• Kanpur: Plastic and polymer cluster
• Gorakhpur: Steel and foundry cluster
• Saharanpur: Wooden furniture cluster

Tax Benefits, Incentives and Subsidies

Uttar Pradesh (UP) offers various tax benefits, incentives, and subsidies to promote industrial growth and investment in the state. Here are some key initiatives –

• Goods and Services Tax (GST) Refund: Manufacturers exporting goods outside India are eligible for input tax refund or set-off under the Central Sales Tax Act 1956.
• Stamp Duty Exemptions: Several stamp duty exemptions are provided to different sectors –
  a.    Industrial units setting up in Eastern UP, Central UP, and Bundelkhand region enjoy a 100% exemption on stamp duty for land acquisition.
  b.    New IT, Bio-tech, BPO, Food processing, Food park, and Alternative energy resource industries receive a 100% exemption on stamp duty.
  c.    Private sector infrastructure development projects (excluding PPP projects) are eligible for a 100% exemption on stamp duty.
• Other new units on government land receive a 75% exemption, while those on private land receive a 50% exemption on stamp duty.
• Electricity Duty Exemptions: Industrial units in UP benefit from exemptions on Electricity Duty –
  a.    New industrial units are exempt from Electricity Duty for 10 years.
  b.    Pioneer units enjoy a 15-year exemption from Electricity Duty.
• Units engaged in captive power generation for self-consumption are exempt from Electricity Duty.
• Investment Promotion Subsidy: Under the Industrial Investment and Employment Promotion Policy, eligible enterprises can receive subsidies based on fixed capital investment and employment generated.
• Interest Subsidy: The state provides interest subsidies to eligible enterprises in select sectors, such as textiles, handicrafts, and food processing.
• Infrastructure Development Assistance: The state offers support for infrastructure development, including the development of industrial areas and parks, through schemes like the Infrastructure and Industrial Investment Policy.
• Single Window System: Uttar Pradesh has implemented a Single Window System to streamline approvals and clearances for setting up industries, simplifying the process for businesses.

Uttar Pradesh (UP) offers a large and diverse consumer market, supported by robust infrastructure and strategic location. The state's growing economy, tax benefits, and government incentives make it an attractive investment destination. UP's cultural heritage and religious tourism also provide opportunities in sectors like hospitality and handicrafts. Market research, understanding local preferences, and strong partnerships are crucial for successful entry. UP's market potential and supportive business environment make it a promising location for expansion.


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