From Maoism To Manufacturing: How New Industrial Policy Is Shaping Chhattisgarh

Chhattisgarh, which used to be in the news for the Naxal attacks and the anti-Maoist operations for decades, has now started hitting the headlines for its industrial development.

Earlier this month, Chhattisgarh became home to the country’s first Artificial Intelligence (AI)-based data centre park. The foundation of this data park was laid by Chief Minister (CM) Vishnu Deo Sai in Nava Raipur.

Before that, Chhattisgarh also got its first semiconductor fabrication unit when the CM laid the foundation stone for the state’s first Gallium Nitride (GaN)-based chip production plant in April.

While the industries started showing interest in Chhattisgarh, the security forces continued their anti-Naxal operations, in line with Union Home Minister Amit Shah's vow to eradicate Naxalism by 31 March 2026.

After the recovery of 31 bodies in a weeks-long anti-Maoist operation earlier this month near the Telangana border, security forces killed another 27 Maoists in Narayanpur on Wednesday (21 May).

"This is what a double-engine government looks like. The Centre is taking care of the security situation, while we, at the state level, are working for development," Chhattisgarh Industries Minister Lakhan Lal Dewangan told Swarajya.

The boost in the investments coming to Chhattisgarh was made possible by the new Industrial Development Policy, which has been effective since 1 November 2024.

Within six months of the policy coming into effect, the state was able to sign Memorandums of Understanding (MoUs) for investment proposals worth Rs 4.5 lakh crore.

This was unprecedented. To put this amount into perspective, the proposed investments are almost equal to Chhattisgarh's Gross State Domestic Product (GSDP) in 2023–24, which was Rs 5.09 lakh crore.

This means that if all the investment proposals translate into reality, they can double Chhattisgarh's GSDP. However, that is a very optimistic scenario and doesn't happen generally. Still, we can expect a huge jump in Chhattisgarh's GSDP with the upcoming projects.

Behind the Scenes

Attracting investments to Chhattisgarh was a key promise in the Bharatiya Janata Party’s (BJP) 2023 manifesto. After defeating the Congress and forming the government, the BJP began working to fulfill this commitment.

Soon after taking oath as the Chhattisgarh CM, Vishnu Deo Sai formed a committee to brainstorm what an industrial policy should include. This committee interacted with various stakeholders, including industries, before drafting a policy.

"Industry associations were consulted about their thoughts regarding our policy. We also reviewed the industrial policies of our adjoining states. Our departmental officers were also consulted," K. K. Shrivastava, Deputy Director of the State Investment Promotion Board, told Swarajya.

However, the most important part of policy drafting was to make it suitable for Chhattisgarh's industrial scenario. "We wanted to leverage our potential of iron, coal, and bauxite ores and push them as core industries," Commissioner of Public Relations (PR), Ravi Mittal, told Swarajya.

At the same time, this potential became a challenge because Chhattisgarh also needed to shed its image of being known only for coal and iron ores to pitch itself to attract industries of other sectors, especially the service sector.

"We identified that the service sector has a huge potential for employment generation and our priority was that," Shrivastava said, adding that the policy has special provisions for pharmaceutical, textile, agro-food processing, electrical, and electronics sectors.

Explaining the untapped potential, Mittal said, "We have a greenfield city like Nava Raipur, which can become a hub of IT industries. Industrialisation has not yet touched regions like Bastar and Sarguja. All this was considered while drafting the policy."

"The biggest challenge in attracting investments to Chhattisgarh was red-tapeism. Industries had to go from one department to another for multiple clearances. There was no incentive for any industrial proposal," an official in the Chhattisgarh government, Nasim Ahmed Khan, explained.

"The rules to take land on lease were very strict. No industrial parks were there. There were no provisions for new-age industries. The erstwhile government had no vision, but we tried to give solutions to these problems through this industrial policy," he added.

After months of deliberations, the policy was approved by the Chhattisgarh cabinet at the end of October 2024. The policy was drafted with the vision of the next five years, Shrivastava said, as the policy would continue till 31 March 2030.

"For the implementation of this policy, the budget for industries was increased multifold and the budget for subsidies was tripled. The policy has everything that a good investment policy should have," an official said, asserting that the compliance requirements have been drastically reduced.

Notably, in the Chhattisgarh Budget 2025–26, the Industries and Commerce Department has been allotted Rs 709.87 crore. A total of 34 industrial parks have already been established in the state to aid upcoming industries, the official added.

What the Policy Does

The new policy emphasises ease of doing business with a 'single-window clearance' system for approvals from various departments. "A total of 350 reforms have been done. There are different provisions for core and new-age industries," Mittal said.

Notably, the industrial policy divides sectors into two categories: Thrust and Core. Sectors like pharmaceuticals, textiles, agro and food processing, electronics and electrical, AI, robotics and computing, information technology (IT), and data centres have been included in the Thrust category.

Since the thrust sectors are relatively newer for Chhattisgarh, more incentives are given to ensure that the budding industries get adequate support. Moreover, the policy provides extra incentives for the first five anchor investors in the thrust sectors, further enhancing their appeal.

Meanwhile, the traditional sectors of steel, cement, and aluminium industries and thermal and solar power plants aren't completely ignored in terms of incentives, as they receive State Goods and Services Tax (SGST) reimbursement up to 100 per cent of Fixed Capital Investment, among other exemptions.

To promote industrial development across all regions, the Chhattisgarh districts have been divided into three groups, with graded incentives where industries in the backward regions will get more incentives.

The policy also adopts the amendments made by the Government of India in 2020 to the MSME Act, 2006 regarding the definitions of Micro, Small, and Medium Enterprises (MSME), allowing them better opportunities, along with various incentives.

"There is a provision for curated land parcel offerings and policies, depending on the requirements of industries for firms investing more than Rs 1,000 crore or providing employment to more than 1,000 locals," Industries Secretary Rajat Kumar told Swarajya.

The decision on such a special package will be taken by a Cabinet sub-committee comprising the CM, Finance Minister, Law Minister, Commerce and Industries Minister, and the Minister of the relevant department.

What it has achieved so far

Of the Rs 4.5 lakh crore worth of investment proposals the state has received, the biggest chunk has come from the energy and steel sectors, contributing Rs 3 lakh crore and Rs 1 lakh crore, respectively, while other sectors account for Rs 50,000 crore.

In the energy sector, proposals worth over Rs 1 lakh crore for thermal power plants have been received. Of this, the Public Sector Undertakings (PSUs) are set to invest over Rs 40,000 crore, while in the private sector, Adani Power leads with planned investments of over Rs 48,000 crore.

Along with this, Jindal Power is set to invest in both thermal and solar power plants. It will invest Rs 12,800 crore for a 1,600 MW plant in Raigarh and Rs 10,000 crore in partnership with NTPC Green for a 2,500 MW solar power plant.

While these proposals were made at the 'Chhattisgarh Energy Investors Summit 2025', held in Raipur in March, earlier in December 2024, the state received a proposal worth Rs 11,500 crore from Renew Power Limited for setting up pump storage and green hydrogen projects at the Investors Connect Meet in Delhi.

Among the steel investors, the largest is Naveen Jindal-led Jindal Steel, which wants to expand its steel manufacturing capacity from 3.6 million tonnes per annum (mtpa) to 9 mtpa at its Raigarh facility. The plan is to complete the expansion by 2027.

Among smaller players in the steel sector is Greentech Solutions, which is planning to set up a steel plant in Chhattisgarh, inspired by the new industrial policy. With an investment of Rs 1,245 crore, the plant will generate 500 jobs.

Since iron is the major component of steel, Industries Minister Dewangan said, "We are producing 46 million tonnes of iron in the state, and our aim is to take this to 65 million tonnes in the next five years."

The production of more iron will ensure that the material demand for steel production is met. It is crucial in the backdrop of ongoing geopolitical trade tensions, of which India's steel imports are also an important part.

Apart from the Energy Investor Summit in Raipur, Chhattisgarh’s three other investor summits in India’s major economic hubs—Delhi, Mumbai and Bengaluru—have also been quite successful.

In Delhi, proposals worth over Rs 15,000 crore were received. They include a Rs 1,650 crore proposal by the TWI Group for a manufacturing unit for EV kits for bikes, a PepsiCo bottling plant, and Micromax's solar cell manufacturing unit.

Then, in Mumbai, proposals worth Rs 6,000 crore were received, including a proposal of Rs 2,367 crore investment from Ambuja Cement. Adani Group is also set to invest Rs 5,000 crore for the development and expansion of its cement plants in the state.

Similarly, in Bengaluru, proposals worth Rs 3,700 crore were received, including Rs 1,350 crore for compressed biogas and green fuel by GPSR Arya Pvt Ltd, Rs 1,000 crore in IT/ITES by Keynes Technology, and Rs 200 crore in food processing by Britannia were received.

The on-ground transformation

While most of the investment proposals take time to convert into reality, the work on many of the projects has already started. One such example is the foundation laying of a GaN-based semiconductor fabrication unit in Nava Raipur.

"In our Delhi investor summit (held in December 2024), a semiconductor company named Polymatech showed interest in investing in Chhattisgarh. Our Industry Department worked with such speed that within three months, we laid the foundation of this unit," PR Commissioner Mittal said.

While the current investment of the Chennai-based company is Rs 1,143 crore for producing 'high-frequency GaN chips' for 5G and 6G telecommunications infrastructure, the company announced an additional investment of Rs 10,000 crore during the foundation laying.

Elaborating on how this could be achieved, Industries Minister Dewangan said, "The erstwhile government used to do MoUs without any concrete preparation, hence they could not become a reality. But we are not just doing MoUs, but issuing 'Invitation to Invest' (ItI)."

Explaining what an ItI is, the Minister said, "An ItI is given to that investor who is interested in investing in our state. It is not vague like MoU, but is drafted after detailed discussions with the investors."

Similar to the semiconductor fabrication unit, the foundation of the AI-based data centre park was also laid within months. Spread across 5.5 hectares, the park will generate 500 direct and 1,500 indirect jobs.

It will be operated by RackBank Datacenters Private Limited with a capacity of 5MW in the first phase. It may be expanded up to 150MW with an additional investment of nearly Rs 2,000 crore.

While the officers of the Industries Department consider it to be the two biggest successes of the new industrial policy, there are a few others as well.

Earlier this month, a Defence PSU, Bharat Earth Movers Limited (BEML) acquired 100 acres of land to BEML in the Janjgir-Champa district at a token rate of Re 1 per acre for establishing a manufacturing unit of Heavy Earth Moving Equipment.

"Land has also been allotted to Yash fan and appliances in Nava Raipur and to Aditya Birla Renewables Green Energy for a solar power plant in Mungeli," Industries Minister Dewangan told Swarajya.

What next

Four new industrial parks are set to be established: A food park in various districts, gems, jewellery and plastic park in Nava Raipur, a pharmaceutical park in Nava Raipur and a smart industrial park in Janjgir-Champa.

"Our next focus is textile, IT and ITES sectors," K K Shrivastava, Deputy Director of the State Investment Promotion Board, said. Notably, the CM was in Mumbai last month to sign an MoU with the Clothing Manufacturers Association of India (CMAI), to attract textile industries.

Notably, last month only, the Chhattisgarh cabinet approved the establishment of the National Institute of Fashion Technology (NIFT) in Nava Raipur, to create an ecosystem for the textile sector. However, despite these efforts, the state has not been able to attract notable textile industries so far.

MoUs with the textile sector, despite it being one of the thrust sectors in the policy, have been on a low scale only. For example, Rs 500 crore MoU with Klene Paks and Rs 100 crore MoU each with Gokaldas Exports and SRV Knit Tech Pvt Ltd have been signed in the textile sector.

To meet these challenges, certain amendments are also being made in the industrial policy. The incentive for industrial investment is being increased from a limit of up to 100 per cent to 200 per cent of the Fixed Capital Investment for the textile sector.

Simultaneously, the list of thrust sectors is being expanded by including toy manufacturing, graphene manufacturing, high-tech farming, meat processing and the production of certain Ayurvedic drugs. Special packages are being introduced for the defence and aerospace sectors.

Tourism has been given the status of an industry, and for its expansion to Bastar and Sarguja divisions, the minimum investment on hotels, resorts and convention centres has been brought down to Rs 7.5 crore.

To further increase the 'ease of doing business', the companies that have received ItIs (Invitation to Invest) will not require approvals for further expansions to their investment plans.

The dynamic approach of the Chhattisgarh Industries Department is commendable as they are amending the policy based on the feedback from the industries. However, only time will tell how this will play out.

For now, we can say that this is one of the most unprecedented initiatives that the state has taken for industrialisation since its formation in 2000. The multi-sector focus will ensure the development of an investment ecosystem, along with the established industries.