UPPCS Mains
2026 Edition
General Studies Paper VI · UP Special
Smart Notes
Industry, Energy and Infrastructure of UP
3
Chapters
12
Topics
35
Figures & Maps
10
Tables
What's Inside
- 01Trade, Commerce and Industry
- 02Industrial Corridors and Transport Network
- 03Energy and Power
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UPPCS Mains · Smart Notes
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UPPCS Mains · Smart Notes
Contents
Industry, Energy and Infrastructure of UP · General Studies Paper VI · UP Special
Chapter 01
Trade, Commerce and Industry
Topic 1
Industrial Development of UP: Major Industries, Growth and Challenges
Chapter Overview
This chapter covers the industry and trade of Uttar Pradesh: its large industries and industrial regions, its MSMEs and craft clusters, its trade and exports, and the new electronics, semiconductor and data-centre cluster around Noida and Jewar. In 2024-25 UP held 9.35% of India's registered factories but only 6.64% of manufacturing value added (MoSPI, 2026), which shows both how far the State has come and how far it still has to go.
The topics move from the whole to its parts. Topic 1 sets out the size, growth, regions and policies of UP's industry and its constraints; Topic 2 turns to the small units and crafts that give most of the jobs; Topic 3 follows their goods into trade and exports; and Topic 4 closes with electronics, now UP's largest export item and the clearest sign of its shift towards modern manufacturing.
Topic Flow
- 1Industrial Development of UP: Major Industries, Growth and Challenges
- built on
- 2MSMEs and Traditional Industries of UP: Policies and Role
- which sell through
- 3Trade, Commerce and Exports of UP
- now led by
- 4Electronics, Semiconductors and Data Centres in UP
Industry's share of UP's gross state value added (GSVA) rose from 26.17% in 2019-20 to 27.82% in 2023-24 (CAG, 2025), and in 2024-25 the State held 9.35% of India's registered factories (MoSPI, ASI 2024-25). Industrial development is the growth of manufacturing, mining, power and construction in output, units and jobs, which moves workers from farms into more productive work.
Size and Growth of UP's Industry
- Share in GSVA: gross state value added (GSVA) is output minus inputs; industry, covering manufacturing, mining, power and construction, now earns over a quarter of it; e.g. industry 27.82%, agriculture 25.72% and services 46.46% of GSVA in 2023-24 (CAG, 2025).
- Growth after Covid: the industry sector shrank in Covid-hit 2020-21 but rebounded fast as factories and building work restarted, and kept growing at double digits; e.g. minus 1.22% in 2020-21, plus 28.47% in 2021-22 and 11.49% in 2023-24, at current prices (CAG, 2025).
- Factory base: the Annual Survey of Industries (ASI) covers registered factories; UP's share of India has risen in both factory numbers and factory jobs; e.g. 9.35% of India's 2.67 lakh factories in 2024-25 (8.51% in 2023-24) and 8.72% of factory jobs, 4th (MoSPI, 2026).
- Survey view: UP's first Economic Survey, tabled in February 2026, reports a fast-rising factory count and the fastest industrial growth among major States; e.g. registered factories above 30,000; industrial GVA growth of 25% (UP Economic Survey 2025-26).
Major Industries and Industrial Regions
- Sugar industry: UP is India's largest cane grower, so sugar is a leading agro-industry, with mills spread over the western and Terai cane belts; e.g. 122 mills crushed 956.09 lakh tonnes of cane and made 92.45 lakh tonnes of sugar in 2024-25 (UP Budget 2026-27); UP grew 48.6% of India's cane (MoA&FW, 2025).
- Food processing: plentiful milk, grain, fruit and vegetables feed a large processing base of small units, mills and agro-parks; e.g. about 24,000 units (Food Processing Industry Policy 2023); ₹2,832 crore for horticulture and food processing (UP Budget 2026-27); farm side: see GS-6 Agriculture Ch 2, Topic 2.
- Textiles and garments: handloom, powerloom, silk and garment units employ many workers, and a new mega textile park is planned to modernise them; e.g. ₹150 crore for the Textile and Garmenting Policy 2022 and a target of 30,000 textile jobs in 2026-27 (UP Budget 2026-27); PM MITRA park at Lucknow, one of seven sites (PIB, 2023, 2025).
- Industrial regions: industry gathers in tier-1 hubs of the west and centre, tier-2 cities and specialised craft towns, leaving Bundelkhand and much of Purvanchal thin; e.g. tier-1: Noida–Greater Noida, Ghaziabad, Kanpur, Lucknow, Agra; tier-2: Varanasi, Prayagraj, Meerut, Saharanpur, Moradabad.
Table 1.1 Common ground: most large units sit on rail and expressway links in the west and centre, while Bundelkhand has few. Sources: UP Budget 2026-27; PIB, 2025, 2026; IndianOil; Hindalco.
| Industry | Main districts (region) | Key fact |
|---|---|---|
| Sugar | western and Terai cane belts; new mills at Pipraich (Gorakhpur), Munderwa (Basti), Ramala (Baghpat) | 122 mills; 8.58 lakh tonnes of cane a day (UP Budget 2026-27) |
| Food processing | Lucknow, Kanpur, Varanasi, Saharanpur, Agra, Meerut | about 24,000 units (2023 policy) |
| Leather and footwear | Kanpur, Unnao (central UP); Agra (Paschimanchal) | see Topic 2 |
| Textiles, carpets, silk | Kanpur, Meerut; Varanasi, Bhadohi, Mirzapur (Purvanchal) | PM MITRA park, Lucknow |
| Cement, aluminium, minerals | Mirzapur (Chunar), Sonbhadra (Purvanchal); Mathura, Aligarh, Firozabad | cement: 15,000–20,000 direct workers (PIB, 2025); Hindalco aluminium smelter at Renukoot (Sonbhadra) |
| Electronics and automobiles | Gautam Buddha Nagar, Ghaziabad (NCR); Lucknow, Kanpur | over half of India's mobile phones (PIB, 2026) |
| Chemicals and refining | Mathura, Kanpur, Prayagraj, Gorakhpur, Ghaziabad | IndianOil refinery at Mathura (1982) |
| Glass, brass, locks | Firozabad, Moradabad, Aligarh (Paschimanchal) | GI crafts: see Topic 2 |
From "BIMARU" to a Manufacturing and IT Base
- BIMARU label: demographer Ashish Bose coined BIMARU for slow-growing Bihar, MP, Rajasthan and UP; UP's faster growth now challenges the label; e.g. economy ₹13.30 lakh crore (2016-17) to ₹30.25 lakh crore (2024-25), 9.1% of India's, yet per capita income 53.5% of the national average (UP Economic Survey 2025-26); see GS-6 Economy Ch 1, Topic 1.
- Electronics and mobiles: the Noida–Greater Noida belt makes phones, displays and parts for India and abroad, the clearest sign of the manufacturing shift; e.g. more than half of India's mobile phones are made in UP (PIB, 2026); detail: see Topic 4.
- IT and services: Noida hosts the IT, software and research centres of large firms, and Lucknow is being built up as an AI and IT hub; e.g. IT and ITeS Policy 2022; Noida for IT, Lucknow for AI, Kanpur for drones (UP Economic Survey 2025-26); UP AI Mission: see GS-6 Science and Technology Ch 2, Topic 2.
- Exports and corridors: exports, defence production and expressways now carry industry beyond the National Capital Region into central and eastern UP; e.g. exports ₹2,01,241 crore in 2025-26 (Business Today, 2026; see Topic 3); Defence Corridor pledges ₹42,057 crore (PIB, 2026; see Ch 2, Topic 1).
- Jobs and linkages: large plants buy from small suppliers and draw transport and services, so each factory job supports more jobs outside it (the employment multiplier); e.g. nearly 4,000 new factories set up in 2024-25 (PTI, 2025); skills for these jobs: see GS-6 Economy Ch 4, Topic 4.
Industrial Policies and Institutions
- IIEPP 2022: the Industrial Investment and Employment Promotion Policy 2022 of the Infrastructure and Industrial Development Department lets each investor choose one incentive route; e.g. capital subsidy, 100% net SGST reimbursement, or a 30% top-up on the Centre's production-linked incentive, PLI (Invest UP, 2022).
- Sector policies: separate policies give tailored packages to electronics, textiles, leather, food processing, data centres, logistics and exports; e.g. Electronics Manufacturing Policy 2020; Textile and Garmenting Policy 2022; Semiconductor Policy 2024; Leather and Footwear Policy 2025 (Invest UP, 2026).
- Land and estates: UPSIDA develops industrial areas, UPEIDA builds hubs beside expressways, and BIDA, modelled on NOIDA, is to build an industrial city in Bundelkhand; e.g. ₹27,103 crore for infrastructure and industrial development, including ₹5,000 crore for the Mukhyamantri Industrial Area Expansion and New Industrial Area Promotion Scheme (UP Budget 2026-27).
- Investment facilitation: Invest UP and the Nivesh Mitra online single window give approvals and investor support for new industrial units at one point; e.g. IIEPP in full, investment climate, business-reform ranks and LEADS ratings: see GS-6 Economy Ch 3, Topic 1.
Constraints on Industrial Growth
Factory numbers have grown fast, but small, low-value units, costly power and a west-heavy spread keep UP's industry below its weight in India's economy.
- Low value added: most units are small and low-tech, so UP's share of manufacturing value lags well behind its share of factories; e.g. only 6.64% of India's manufacturing GVA, 5th, against Maharashtra 15.92% (MoSPI, 2026).
- Costly power: loss-making discoms keep supply uneven and power costly for factories, which raises the cost of every unit made in UP; e.g. AT&C losses UP 19.6% vs India 15% in 2024-25 (PRS, 2026); discom finances and reform: see Ch 3, Topic 1.
- West-heavy spread: industry and incomes crowd into the NCR districts and a few big cities, while Bundelkhand and eastern UP lag far behind; e.g. Gautam Buddha Nagar alone over 10% of UP's economy, five districts over 25% (district output 2023-24, Channel IAM, 2025); see GS-6 Economy Ch 5, Topic 2.
- Land, skills and MoUs: scarce ready land, few trained technicians and slow conversion of summit MoUs into plants delay projects and jobs; e.g. over ₹10 lakh crore of projects at the fourth ground-breaking ceremony (2024) against ₹35.5 lakh crore estimated at GIS 2023 (PIB, 2023, 2024); summits: see GS-6 Economy Ch 3, Topic 2; land: Ch 2, Topic 4.
Way Forward for UP's Industry
- Value addition: move from raw sugar, grain and hides to processed food, ethanol, branded leather and electronics parts so that each factory earns more; e.g. ₹300 crore to implement the food processing policy (UP Budget 2026-27); Leather and Footwear Policy 2025.
- Lagging regions: steer new units to Bundelkhand and Purvanchal with higher incentives, ready land and estates beside the new expressways; e.g. 100% stamp duty exemption in Bundelkhand and Purvanchal under IIEPP 2022 (Invest UP, 2022); BIDA in Bundelkhand.
- Power and skills: cut discom losses for reliable supply, and tie ITIs and polytechnics to industry clusters so that local youth fill new jobs; e.g. Kaushal Connect cell of Invest UP (Invest UP, 2026); SDG 9 (industry, innovation and infrastructure).
With power reforms, value addition and estates in lagging regions, UP's factory boom can turn into higher incomes and the jobs its young workforce needs.
Based on NCERT, Standard Books references, Keywords from Syllabus and Previous Year question Papers
Topic 2
MSMEs and Traditional Industries of UP: Policies and Role
Behind the large plants of Topic 1 stand lakhs of small units: by February 2026 UP had 86.03 lakh Udyam registrations, about 11% of India's 7.83 crore and second only to Maharashtra (PIB, 2026). Micro, small and medium enterprises (MSMEs) are units classed by their investment in plant and machinery and their turnover under the MSMED Act, 2006; its micro and small units are what is commonly called small-scale industry, while traditional industries are craft-based units that use inherited skills and local materials.
Size of the MSME Base and Craft Clusters
- Udyam count: Udyam, the free online MSME registration begun in 2020, places UP among the top two States for registered small units; e.g. 86.03 lakh in UP vs Maharashtra 1.01 crore and Tamil Nadu 62.28 lakh in February 2026 (PIB, 2026); since Union Budget 2025-26 a micro unit has up to ₹2.5 crore investment and ₹10 crore turnover, a small unit up to ₹25 crore and ₹100 crore (PIB, 2025; see GS-3 Indian Economy Ch 5, Topic 4).
- Craft clusters: traditional industries gather in towns where a craft has passed down for generations, many now protected by geographical indication (GI) tags; e.g. Bhadohi carpets: over 1 lakh looms; Moradabad Metal Craft and Firozabad glass GI-registered (PIB, 2025).
- Leather belt: Kanpur and Unnao make finished leather, saddlery and safety shoes, and Agra makes footwear, giving UP a large share of India's leather trade; e.g. nearly 46% of India's leather exports (Invest UP, 2026); Kanpur Saddlery and Agra Leather Footwear GI-registered (PIB, 2025).
- Chikankari and weaving: Lucknow's chikankari and zardozi and Varanasi's silk weaving employ many women and home-based artisans; e.g. chikankari and zari: nearly 2.5–3 lakh artisans; Lucknow Chikan Craft and Varanasi Zardozi GI-registered (PIB, 2025).
Table 1.2 Common ground: each cluster rests on one inherited skill and one local market name. Sources: PIB, 2025; Invest UP, 2026; ODOP Cell, 2026.
| Craft or industry | District (region) | GI or ODOP |
|---|---|---|
| Hand-knotted carpets | Bhadohi, Mirzapur, Jaunpur (Purvanchal) | GI; ODOP |
| Silk sarees, zardozi | Varanasi (Purvanchal) | GI |
| Black pottery, terracotta | Nizamabad (Azamgarh), Gorakhpur (Purvanchal) | GI; ODOP |
| Chikankari, zardozi | Lucknow (Awadh) | GI; ODOP |
| Perfume (itra) | Kannauj (central UP) | GI; ODOP |
| Leather, saddlery | Kanpur Nagar, Unnao (central UP) | GI; ODOP |
| Leather footwear | Agra, Mathura (Paschimanchal) | GI; ODOP |
| Glass and bangles | Firozabad (Paschimanchal) | GI; ODOP |
| Brass metal craft | Moradabad (Paschimanchal) | GI; ODOP |
| Locks and hardware | Aligarh (Paschimanchal) | GI; ODOP |
| Wood carving | Saharanpur (Paschimanchal) | GI; ODOP |
| Ceramics; sports goods | Khurja (Bulandshahr); Meerut (Paschimanchal) | ODOP |
Role in Jobs, Exports and Regional Balance
- Mass employment: small units and crafts need little capital per worker, so they absorb rural and small-town labour that farms cannot employ; e.g. Firozabad glass about 1.5 lakh workers; leather over 10 lakh workers in UP (PIB, 2025; Invest UP, 2026).
- Exports from craft towns: carpets, brassware, leather goods and garments from small towns earn foreign exchange and give districts an export identity; e.g. Agra and Mathura make about 1.5 lakh pairs of shoes a day, nearly 28% of India's footwear exports (PIB, 2025).
- Regional balance: clusters spread across Purvanchal, Awadh and Paschimanchal, so small industry reaches districts that large plants skip; e.g. ODOP (2018) picks one product in each of the 75 districts; scheme detail: see GS-6 Economy Ch 2, Topic 3.
- Entrepreneurship and inclusion: low start-up capital, home-based crafts and higher subsidies for women and SC/ST owners make small units the first step for new entrepreneurs; e.g. 2% extra capital subsidy for SC/ST and women and full stamp duty exemption for women entrepreneurs (MSME Promotion Policy 2022).
- Suppliers and migrants: small firms supply parts to large plants and absorbed many migrant workers who returned home during the 2020 lockdown; e.g. Atma Nirbhar UP Rojgar Abhiyan (2020) for over 30 lakh returned migrants (PIB, 2020); defence vendors: see Ch 2, Topic 1.
Policies and Programmes for MSMEs
- MSME Promotion Policy 2022: the State policy of the MSME and Export Promotion Department gives the highest capital subsidy in the backward regions; e.g. 25%, 20% and 15% for micro, small and medium units in Bundelkhand and Purvanchal, up to ₹4 crore; MSME schemes ₹3,822 crore, 19% above 2025-26 (UP Budget 2026-27).
- MSME Act 2020: the UP MSME (Facilitation of Establishment and Operation) Act, 2020 gives registered units a quick acknowledgement to set up and spares them early inspections; e.g. acknowledgement within 72 hours on the Directorate of Industries portal, then no inspection for 1,000 days (UP MSME 1-Connect, 2026).
- Cheaper credit and parks: interest subsidy lowers loan costs for micro units, and help for MSME parks and flatted factories (multi-storey ready sheds) gives small firms space; e.g. 50% interest subsidy for five years, up to ₹25 lakh; up to ₹2 crore a year for 7 years to parks of 10 acres or more (Invest UP, 2026).
- CM-YUVA: the Mukhyamantri Yuva Udyami Vikas Abhiyan gives educated and trained youth guarantee-free, interest-free loans to start micro-enterprises; e.g. target 1 lakh units a year and 10 lakh in 10 years (ODOP Cell, 2026); ₹1,000 crore (UP Budget 2026-27).
- Artisan support: ODOP's toolkit scheme trains artisans free and gives them modern toolkits, while the Vishwakarma Shram Samman Yojana is a separate State scheme for artisans; e.g. ODOP Training and Toolkit Scheme (2020): 10 days of training, ₹200 a day and a free toolkit; PM Vishwakarma (2023) at the national level.
- Sector packages: separate textile, leather and powerloom schemes target the biggest craft employers with land grants, capital subsidy and cheaper power; e.g. ₹4,423 crore for flat-rate power to powerloom weavers (UP Budget 2026-27); Leather and Footwear Policy 2025: capital subsidy up to 35% (Invest UP, 2026).
Constraints Facing Small Industry
MSMEs are many, but most are tiny, informal and short of credit, so their numbers do not yet turn into scale, technology or steady exports.
- Credit gap: banks ask for collateral and records that tiny units lack, so many borrow from informal lenders at high interest; e.g. CM-YUVA's guarantee-free loans and the 50% interest subsidy for micro units respond to this gap.
- Old technology: hand tools, old looms and coal-fired furnaces keep costs high and quality uneven against factory-made and imported goods; e.g. MSME Promotion Policy 2022 refunds 75% of quality-certification and patent costs (Invest UP, 2026).
- Informality and data: most units stay unregistered and miss schemes, and official counts of MSMEs differ widely with the base used; e.g. 86.03 lakh Udyam registrations (PIB, 2026) against "about 95 lakh MSMEs, the highest in India" (PIB, 2023).
- Pollution norms: tanneries, glass furnaces and dyeing units must meet strict effluent and air norms that small owners find costly; e.g. nearly 200 tanneries in Kanpur (PIB, 2025); Ganga pollution and the Taj Trapezium Zone: see GS-6 Environment Ch 4, Topics 2 and 4.
Way Forward for MSMEs and Crafts
- Formal credit: push Udyam registration, cash-flow-based lending and guarantee cover so that more small units can borrow from banks; e.g. CM-YUVA and PM Vishwakarma (2023) loans; national MSME credit schemes: see GS-3 Indian Economy Ch 5, Topic 4.
- Cluster upgrading: common facility centres, design labs, gas or electric furnaces and GI branding can lift the quality and price of craft goods; e.g. new Sardar Vallabh Bhai Patel Employment and Industrial Zone scheme (UP Budget 2026-27); crafts heritage: see GS-5 Ch 7, Topic 6.
- Markets and e-commerce: link clusters to trade fairs, e-commerce and exporters so that artisans earn more of the final price; e.g. UP International Trade Show, Greater Noida, September 2026 (see Topic 3); SDG 8 (decent work and economic growth).
Cheaper credit, cleaner technology and stronger brands can turn UP's lakhs of small units and craft clusters into a lasting base of jobs in every region.
Based on NCERT, Standard Books references, Keywords from Syllabus and Previous Year question Papers