What’s Holding Back The UP Defence Corridor From Being An All-Out Success

The Uttar Pradesh Defence Industrial Corridor (UPDIC) is set to attract investments worth Rs 28,481 crore with 170 Memorandums of Understanding (MoUs) signed, 145 of which are with industries, and the remaining 25 with institutions.

Land has also been allotted to 57 industries, which are set to invest Rs 9,463 crore across various nodes of the UPDIC and are expected to generate 13,736 employment opportunities.

The UPDIC was first announced in the Union Budget 2018-19, along with Tamil Nadu Defence Industrial Corridor. Six nodes—Aligarh, Agra, Jhansi, Kanpur, Chitrakoot, and Lucknow—were to be developed for UPDIC.

The plan was to keep land banks available for defence industries at these six nodes and allocate them based on their needs and eligibility. These land banks come along with all basic infrastructure like road connectivity, electricity and water connections.

However, due to slow land acquisition, the project has not progressed as expected. Most of the industries that Swarajya talked to, got their lands only early this year and are now in the process of building their factories.

Moreover, as per the data provided by the Uttar Pradesh Expressways Industrial Development Authority (UPEIDA), the nodal agency of the UPDIC, land has not been allotted to industries in two nodes—Agra and Chitrakoot.

This means that practically, the UPDIC has taken off only in four nodes—Aligarh, Jhansi, Kanpur and Lucknow. However, UPIDC Chief General Manager (CGM) Colonel Sanjay Singh clarified this development.

"The land is in the final stages of acquisition in Agra. The acquisition has been completed for approximately 120 hectares of land and an advertisement to invite industries here was published earlier this week," Singh told Swarajya on the phone.

Regarding the Chitrakoot node, he clarified, "There is no procedural delay. The industries keep their interest, convenience and other logistic matters in mind while choosing a place. Five to six industries have shown interest and visited the site, but none have applied."

The Progress So Far

The Public Sector Undertaking (PSU) under the Ministry of Defence, Bharat Dynamics Limited (BDL), is the first company to set up its anchor unit in the UPDIC. BDL acquired 183 hectares of land in the Jhansi node of the UPDIC.

Its foundation was laid by Prime Minister (PM) Narendra Modi on 19 November 2021, but even over three years after this development, the BDL has not started production. The unit plans to manufacture propulsion systems.

The BDL office told Swarajya that the factory is currently under construction and the production will start only when the factory is fully ready.

Meanwhile, the Ministry of Micro, Small and Medium Enterprises (MSME) is setting up a new Technology Centre/Extension Centre (TCEC) through Public Private Partnership (PPP) at the Jhansi node.

As per a media report from December 2024, Tata Technologies, Paavak Industries, Optic Electronic India, Nitrodynamics Aerospace and Defence and Navbharat Defence Systems were also planning to invest in the Jhansi node.

However, when Swarajya contacted Tata Technologies and Paavak Industries, they denied any investment plans in the UPDIC, while the other companies could not be reached.

Currently, the largest land bank of over 300 hectares is available for industries in the Jhansi node, while over 400 hectares of land has already been allotted to 16 industries there.

This also makes the Jhansi node a home to large industries with an average land parcel of 26 hectares to each industry. Since larger factories need more time for construction, no company has started the production yet in this node.

While the Jhansi node is slowly moving ahead, another node in the Bundelkhand region, Chitrakoot, does not have any industries despite the available industry-ready land of 70 hectares.

Thus, the UPDIC, which was touted as Bundelkhand Defence Corridor by the Bharatiya Janata Party (BJP) leaders, has failed to stand up to its purported name as of now, with a slow pace of development in the Bundelkhand region.

Even during the 2024 Lok Sabha election campaign, PM Modi highlighted the role of the Defence Industrial Corridor for the development of Bundelkhand and promised that missiles will be manufactured there, generating employment opportunities.

Another promise of the Bundelkhand Expressway though has been fulfilled with its inauguration on 16 July, 2022. The 296-km expressway connects Chitrakoot to Agra-Lucknow expressway, passing through seven districts of UP.

The expressway was expected to boost the economy of the Bundelkhand region with connectivity, however, its much impact has not been seen at the Chitrakoot node yet.

To attract investments in the Bundelkhand region, the Yogi Adityanath-led UP government has promised capital subsidies up to 10 per cent in Jhansi and Chitrakoot nodes, while the subsidies are limited to 7 per cent in the other four nodes of the UPIDC.

On 24 January 2025, the UP government approved the Aerospace and Defence Unit and Employment Promotion Policy to support the Aerospace and Defence companies with 25 per cent capital subsidies in the four nodes and with 35 per cent capital subsidies in Chitrakoot and Jhansi nodes.

While the government is making special provisions for the development of Bundelkhand, it is the nodes at those cities which already had pre-existing industrial areas that are developing at a fast pace in UPDIC.

The Well Working Nodes

The Kanpur, Aligarh and Lucknow nodes have almost exhausted the industry-ready land parcels as a large number of companies showed interest in having factories in these nodes of the UPIDC.

Notably, these cities had some industries earlier as well. For instance, Lucknow had steel furniture, Chikankari, terracotta and plastic industry clusters; Aligarh had locks and hardware manufacturing; and Kanpur had a wide range of industries from garments to leather and many more.

With the UPIDC offering industry-ready land parcels, many of these existing companies, which were struggling due to infrastructure and land constraints, decided to move to the UPIDC nodes.

One such firm is Indian Diecasting Industries (IDI), which used to manufacture fittings for structures for aircraft maintenance in its Aligarh factory. However, when the company got the order to build a complete structure from a Middle East firm, it decided to move its operations to the UPIDC land.

"I don't have much space at my existing facility. When my plant at the UPIDC land is ready, I can fulfill the order requirement from there," Managing Partner of IDI, Anshuman told Swarajya, asserting that he recently got his land.

Anshuman, who is investing Rs 10 to 15 crore on this project, praised the UPIDC officials for quick grievance redressal but complained about not much financial support to the project.

Another small company, Cobra Industries, which is investing Rs 2 crore in the Aligarh node, has completed the land acquisition. It intends to start manufacturing defence packaging from 2026 onwards.

Nitya Creation India, which manufactures parts of guns and components of electromechanical and communication systems, has started production at the Aligarh node in mid-February 2025. The company's plan was to invest Rs 12 crore, of which Rs 5 crore have already been invested.

Due to Aligarh's proximity to New Delhi, good connectivity and supporting ecosystem, it has emerged as the best node in UPIDC, attracting investments worth Rs 3,421 crore, as per a media report from December 2024.

The highest investment comes from Ancor Research Labs with a proposal of Rs 550 crore of investment. Currently, the facility has got the electricity connection and the building development plan has been approved by UPEIDA.

"The development will be in phases. One or two parts of the building structure may be completed by the end of this year. This will be a research and development centre with a prototyping facility for defence electronics," Dr Chitra Kadam, Ancor vice president told Swarajya.

Amitec Electronic, another major investor with Rs 330 crore investment, has started the production of electronic warfare systems and satellite spaceports in Aligarh, along with Werywin Defence, UPDIC CGM Singh confirmed.

Osho Corp Global, Prashant Enterprises, SMPP, Triveni Engineering and Horizon Aerospace (India) are other major investors in the Aligarh node.

The Aligarh node is in so much demand that the UPDIC has run out of land to allocate to the industries. Saxena Marine Tech told Swarajya that they wanted to invest but could not as they could not get the land allocated.

Currently, 64 hectares of land have been allocated to 24 companies in the Aligarh node. The UPDIC still has 26 hectares of land available, but that needs to be made industry-ready. Only after that, the remaining industries can be accommodated.

Moreover, 86 hectares of additional land has been acquired in the second phase of acquisition and is in the final phases. It will soon be made available to the industries, CGM Singh assured.

However, this brings to our notice that only smaller land parcels were allocated to industries in Aligarh, which was as per their demands. This is because it was most of the existing local companies themselves that invested in the UPIDC node, instead of major investments from outside.

Each company has an average of 2.67 hectares of land, nearly one-tenth of what is available at the Jhansi node, which means that bigger companies will need to shift to other nodes.

The large companies are coming to the Kanpur node, like Adani Defence Systems and Technologies with an investment of Rs 1,500 crore, Aadhunik Material and Sciences with Rs 380 crore investment, Netra Global with Rs 360 crore investment and Ananth Technologies with Rs 3,500 crore investment.

In the Kanpur node, 210 hectares of land have been allocated to five companies, giving each company an average land parcel of 42 hectares, suitable for large factories. The UP government has spent Rs 62 crore for the development of this node.

The Adani Group has started producing small, medium, and large-calibre ammunition at its ammunition manufacturing facility since last year, while Aadhunik Material and Sciences has also started manufacturing advanced clothing for soldiers.

A R Polymers have also started their production, while two companies in Kanpur—Netra Global Private Limited, which will manufacture artillery shells and Ananth Technologies, which will produce equipment related to LEO and GEO satellites—are yet to start production.

The Lucknow node's biggest attraction will be BRAHMOS Aerospace, the joint venture of the Defence Research and Development Organisation (DRDO) of India and NPO Mashinostroyenia (NPOM) of Russia.

It will set up a modern production facility over an area of 80 hectares with an initial investment of 300 crores. Civil construction has started for this facility.

"It is slated to manufacture more than 100 BRAHMOS missiles in the next three years and generate Rs 9,000 crore through production of missiles in five to seven years," the UPIDC said, adding that the foundation stone was laid by Defence Minister Rajnath Singh on 26 December 2021.

DRDO is also planning to set up Defence Technology and Test Centre (DTTC) at the Lucknow node. It will be a one-of-a-kind defence technology-based facility.

Advanced Materials (Defence) Testing Foundation (AMDTF), a joint venture of eight companies, is also establishing a mechanical and materials testing facility at the Lucknow node.

Till now, a total of 111 hectares of land has been allotted to 12 companies in the Lucknow node.

Meanwhile, a complete defence manufacturing ecosystem is being tried to be created with the help of Defence PSUs like Gliders India Limited (GIL). UPEIDA has partnered with GIL to assist the MSMEs in the corridor to become part of the value chain of these DPSUs and support their operations.

Explaining this, CGM Singh said, "DPSUs like GIL will attract their suppliers to set up units in defence nodes near their facilities and we will prioritise allotting lands to their suppliers to have a supply value chain without additional logistics costs."

The working of the UPIDC was appreciated by various companies that Swarajya talked to. "The UP government support has been great and tremendous. Forming different platforms for the industries to interact with officials helped in addressing concerns," Ancor Research Labs VP told Swarajya.

Similarly, Indian Diecasting Industries, which earlier faced troubles in getting adequate plot sizes and then for the closure of a village road passing through its plot, told Swarajya, "Cooperation was very good with officials. Grievance redressal was quick."

Appreciating the 'ease of doing business' facilitated by the Yogi government, Managing Director of Nitya Creation, Navneet Kumar told Swarajya, "Our all work happened easily and quickly. Infrastructure work is progressing at a fast pace."

The lack of investment at certain nodes can be attributed to structural issues, but it is difficult to single out UPDIC for its blame. However, the delay in starting production means the employment opportunities will be generated later, not giving the BJP government a potential point to advertise in the 2027 UP election.