Uttar Pradesh vows to chase southern states industrial lead

C Shivakumar @ Lucknow:
Uttar Pradesh, long associated with agrarian economy and jobless growth, is seeking to rewrite its economic narrative. Its Industries Secretary Vijay Kiran Anand has a blunt pitch for investors weighing opportunities in  southern states -- look north, where a vast domestic market and falling freight costs are making the state increasingly competitive.

Briefing a delegation of journalists from Tamil Nadu and Puducherry, Kiran said that India's most populous state — long an underperformer in manufacturing investment relative to its economic weight — is closing the gap with the south not through incentives alone, but through hard infrastructure. Nearly half of India's Dedicated Freight Corridor, 47 of its 115 stations, now runs through Uttar Pradesh, cutting the time for goods to reach ports to two days and radically lowering transport costs that have long favoured coastal manufacturing hubs.

"Industries like auto and electronics want to be near ports because of transportation costs," Kiran said. "Now, because of the freight corridor and the expressway network, dry ports have come up — nine of them, four run by the state-owned Concor and five by private operators," he says.

Investment has skewed south for decades, drawn by port access and a services boom that states such as Tamil Nadu, Karnataka and Maharashtra built on earlier social-sector spending. Uttar Pradesh, by contrast, still derives its growth largely from manufacturing and a still-agrarian base — 75-90% of its land is irrigated, and three-quarters of the population depends on agriculture.

"Tamil Nadu is a port state, which is why it has auto clusters for export and electronics manufacturing. UP has a huge domestic market, which is why cement, steel, and similar companies are setting up here. UP also has a large talent pool — 56% of the workforce is around 25 years old, a very young workforce," says Kiran.

While Tamil Nadu, the most urbanised state is facing shortage of usable industrial land, Uttar Pradesh claims it has 75,000-acre land bank. "Farmers are reluctant to give up land. But going by our experience with large airports and expressways, land acquisition here hasn't become controversial — there's now a set process, and we're able to do it even for industrial clusters," he says.

That land is now anchoring the state's defence manufacturing ambitions. Pressed on why the Uttar Pradesh Defence Industrial Corridor — now eight years old — has attracted only around Rs 4,000 crore, Kiran noted the programme effectively began in 2021, not at its 2018 launch, and that 60-70 companies have since committed across its six nodes. The Kanpur node already hosts India's largest defence-manufacturing facility, while Lucknow is producing BrahMos missile systems. In Aligarh, all but 350 hectares of a 5,500-hectare site have been allotted.

Where the state concedes ground most readily is services. Uttar Pradesh has yet to build the Global Capability Centre and IT ecosystems that have made Bengaluru, Chennai and Hyderabad magnets for high-paying jobs — a gap the secretary attributed to the south's earlier investment in social infrastructure. With 56% of its workforce under 25, some 8,000 educational institutions and roughly 200,000 STEM graduates a year, the state produces more labour than it can currently employ at the top end, feeding migration south which Kiran says that the state now want to reverse through a dedicated GCC policy.

The state's MSME base — 9.6 million enterprises, of which 7 million are registered on the government's Udyam portal — is being organised around a "One District, One Product" model that originated in Uttar Pradesh before being adopted nationally, pairing roughly 75 districts with signature local products, from Lucknow's chikankari embroidery to regional food-processing clusters.

Urbanisation remains the starkest gap with the south: at roughly 30%, against Tamil Nadu's 50-60%. However,UP's urban population alone, at 7 crore, exceeds Tamil Nadu's entire population, the secretary said.