UP Gears Up for Defence Manufacturing Boom with MSME Support

Uttar Pradesh is ramping up its efforts to establish a robust vendor supply chain aimed at elevating India’s aerospace and defense (A&D) manufacturing to $25 billion and exports to $5 billion by 2025-26. The government is laying the foundation for a dedicated defense MSME corridor that will strengthen the UP Defence Industrial Corridor (UPDIC) and promote a strong atmosphere for support units.

Aiming to draw in ₹50,000 crore in investments, UPDIC has successfully obtained more than ₹30,000 crore in private funding across its six key nodes—Aligarh, Agra, Kanpur, Lucknow, Chitrakoot, and Jhansi. Prominent defense companies, such as Bharat Dynamics Limited in Jhansi, Adani Defence System and Technology in Kanpur, and DRDO-BrahMos Aerospace in Lucknow, are notable investors in the area.

According to UP MSME minister Rakesh Sachan, “The proposed defence MSME corridor will supplement the ancillary value chain, while the state government will support entrepreneurs with capital and land subsidy, stamp duty waiver, and state goods and services tax reimbursement.”

The government has designated almost 5,000 hectares for UPDIC, with more than 1,500 hectares already secured. Every node is allocated for particular defense items, guaranteeing a tailored and effective production system. Moreover, the recently sanctioned Aerospace and Defence Unit and Employment Promotion Policy 2024 seeks to create 100,000 jobs while providing up to 80% land subsidy to foreign investors, strengthening UP's role as a key participant in India's A&D sector.