The Uttar Pradesh government has introduced a draft amendment to its Defence & Aerospace Policy 2018, aimed at encouraging investment and bolstering manufacturing in the Uttar Pradesh Defence Industrial Corridor (UPDIC). The updated policy proposes increased subsidies and streamlined processes for investors.
The amended policy includes a 10% capital subsidy for units in Jhansi and Chitrakoot, capped at ₹500 crore. This represents an increase from the earlier 7% subsidy, applicable in nodes such as Agra, Aligarh, Lucknow, and Kanpur. Other incentives include transport subsidies and support for patent and trademark registrations.
The state has allocated approximately 5,000 hectares of developed land across six nodes: Aligarh, Agra, Kanpur, Lucknow, Chitrakoot, and Jhansi, to support industrial development in the corridor.
According to the Uttar Pradesh Expressways Industrial Development Authority (UPEIDA), the nodal agency overseeing the initiative, the amended policy is expected to attract investments of ₹50,000 crore and generate up to 250,000 jobs across the corridor's six nodes. UPEIDA has already finalized a draft of the revised policy, pending approval from the state cabinet.
To date, the state has signed 150 defence manufacturing agreements valued at ₹25,000 crore under the UPDIC framework. The corridor's development builds on Uttar Pradesh's existing defence production base, which includes seven ordnance factories, four Hindustan Aeronautics Limited units, and two small arms and field gun factories.
India's domestic defence production reached ₹1.26 trillion in the financial year 2023-24, underscoring the potential for growth in this sector.
The proposed policy changes aim to align with evolving industry dynamics and enhance defence manufacturing and research in Uttar Pradesh, according to a senior government official.
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