India Investment Profile: State of Haryana

October 20, 2023 Posted by India Briefing Written by Harshwardhan Sharma and Melissa Cyrill Reading Time: 8 minutes

The state of Haryana, near Delhi, offers lucrative IT and manufacturing investment prospects, and has offices of several hundred multinational firms with a presence in India. We discuss key features about the state, including its economic performance, connectivity infrastructure, major industries, and enabling policies.

Location

Haryana, located in the northern part of India, shares its borders with the states of Uttar Pradesh, Punjab, Himachal Pradesh, and Rajasthan. It is also surrounded on three sides by the national capital, Delhi (north, west, and south), and its bordering districts form an integral part of the Delhi National Capital Region (NCR). In fact, about 57 percent of the state falls under the Delhi NCR area. The territory of Haryana encompasses 44,212 sq km, accounting for approximately 1.4 percent of India’s land area, ranking it as the 21st largest state.

Administration

Haryana is divided into six income divisions, further subdivided into 22 districts. The state’s legislative assembly, the Haryana Vidhan Sabha, is situated in Chandigarh, which serves as the capital for both Haryana and Punjab. The Punjab and Haryana High Court, headquartered in Chandigarh, holds jurisdiction over the entire state.

Demography and economy

Haryana is home to a population of 25.4 million per the 2011 Census and over 65 percent of the population is in the working age cohort of 15-59, per Invest India. Haryana ranks 11th among Indian states in terms of its human development index. There are 280 engineering colleges, 171 management institutes, 187 polytechnic institutes, 414 industrial training institutes, 33 pharmacy colleges, 24 private universities, 20 state universities, and 1 central university in the state.

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The state’s economy is the 13th largest in India, boasting a gross state domestic product (GSDP) of INR 9.94 trillion (equivalent to US$119.65 billion) in 2022-23 at current prices. (US$1=INR 83.07). Haryana registered exports worth US$13.88 billion in 2022-23.

As one of India’s most industrially advanced and economically developed states, Haryana has the third highest per capita income after Telangana and Karnataka, at US$3,571.78. As of December 2022, Haryana had 21.86 million internet users and 32.76 million mobile phone users.

Haryana is home to several special economic zones (SEZs). As of 2019, there were 23 SEZs with formal approval and 7 exporting SEZs, primarily situated along the industrial corridor projects connecting the NCR. There are 101 real estate developers in the state setting up SEZ projects. Within Haryana, the district of Gurgaon (now Gurugram), which is a part of Delhi NCR, is widely recognized as a hub for the IT and finance industries, start-up enterprises, as well as the automobile industry. It is also a choice location for global captive centers.

Foreign investment appeal

Haryana is home to 250 of the Fortune 500 companies. It has the highest concentration of outsourcing (BPO) workforce in the world.

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Major foreign investors in the state are Accenture, Microsoft, Genpact, Samsung, E&Y, Nokia, American Express, Dell, Google, Wipro, Siemens, Maruti Suzuki, Honda, Cargill, Asahi Glass India Ltd., Kubota, Johnson Matthey. Haryana has registered US$8.31 billion in foreign direct investment between October 2019 and June 2023.

The state’s industrial policies, mentioned below, include major incentives and subsidy components, for eligible enterprises. Such benefits are also on offer for Haryana’s focus sectors—auto & auto components, agro & food processing, textiles & apparel, footwear & accessories, electronics and IT/ITeS, defense & aerospace, renewable energy & solar parks, pharmaceutical & chemicals.

Infrastructure and connectivity

In terms of infrastructure, Haryana has access to 2 international airports (Chandigarh and New Delhi), 5 civil airports (Pinjore, Karnal, Hissar, Bhiwani, and Narnaul), and has 1,703 km of rail network. The entire state is covered by at least one major industrial corridor—the Delhi-Mumbai Industrial Corridor (DMIC), the Amritsar Kolkata Industrial Corridor (AKIC), and the Kundli-Manesar-Palwal Expressway (KMP).

Catalyzing industrial growth is the Haryana State Industrial and Infrastructure Development Corporation (HSIIDC), which ensures business enterprises receive reliable and efficient support services. HSIIDC has established industrial farms, model towns, and specialized parks, which are designed to foster industrial clusters. These locations provide enterprises with state-of-the-art infrastructure and access to essential resources.

Key sectors

Agriculture and allied industries

Agriculture is the backbone of rural Haryana, offering substantial employment opportunities and great potential for trade and value addition to crops. The state’s primary crops include wheat, sugarcane, rice, cotton, oilseeds, and mustard. Per government data, Haryana exports more than 60 percent of Basmati rice. Basmati rice exports from Haryana were valued at US$2,290.71 million in FY20, US$2,113.36 million in FY21, and US$327.02 million in FY22 (until May 2021).

Haryana’s “Horticulture Vision” aims to triple horticultural output and expand gardening areas from 7.5 percent to 15 percent by 2030.

Automobiles

Haryana is a coveted destination for leading automotive manufacturers and auto-component producers. A significant proportion of the country’s automobiles, including cars, tractors, and motorbikes, are manufactured in the state. Gurgaon and Faridabad have emerged as key automotive hubs, and the International Center for Automotive Technology (ICAT) in Manesar, part of the National Automotive Testing & Research & Development (R&D) Infrastructure Project (NATRiP), facilitates testing and research and development in the automotive sector.

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In FY22, Haryana exported auto parts valued at US$129.77 million and cars and motor vehicles worth US$114.72 million. Maruti Suzuki India (MSI), the country’s largest car manufacturer, has expanded facilities in Haryana, with investment exceeding INR 180 billion (US$2.42 billion). And Suzuki Motorcycle India Pvt. Ltd. is initiating a project with an investment of INR 14.66 billion (US$176.34 million) in IMT Kharkhoda. Haryana also wants to develop its electric vehicle ecosystem and transition ICE vehicles to electric variants.

Information technology and electronics system design and manufacturing (IT & ESDM)

Gurugram has emerged as a prominent destination for IT professionals in North India, with the state boasting 49 licensed IT parks and seven IT/ITeS Special Economic Zones (SEZs) as of October 2020. Haryana’s contributions to IT exports are remarkable, with exports of electric machinery and equipment reaching US$390.7 million in FY22 (until February 2022). In FY21, these exports amounted to US$462.5 million, underscoring the state’s pivotal role in the IT and ESDM sector.

Textiles

Haryana is the fourth-largest cotton producer in India, contributing approximately six percent of the country’s cotton production. With abundant access to raw materials, Haryana has become a textile industry stronghold, employing around one million people. Districts like Panipat, Gurugram, Faridabad, Hisar, and Sonipat have evolved into thriving textile hubs, specializing in ready-made cotton clothing. In FY21, textile exports from Haryana were valued at US$647.3 million, and in FY22, they reached US$625.84 million. To further nurture the industry, the state government introduced the Textile Policy 2018, aimed at facilitating its growth and development.

Haryana investment promotion: Key offices

Office	Description
Foreign Cooperation Department, Government of Haryana	Tasked with managing the state’s diplomacy and building international relationships. Its mission includes promoting Haryana as a prime destination for foreign investments by positioning it as a hub for industries, education, skills, and tourism.
Haryana State Industrial and Infrastructure Development Corporation Ltd (HSIIDC)	Helps businesses with funding by facilitating term loans, leasing tools, and operating capital.
Haryana Agro Industries Corporation Ltd (HAIC)	Engaged in business activities like selling seeds, fertilizers, chemicals, tractors, and other farm equipment to farmers at reasonable prices.
Haryana State Electronics Development Corporation Ltd (HARTRON)	The government body in Haryana, which is in charge of developing electronics and IT businesses. It has a lot of experience building facilities and getting projects approved.
Haryana Urban Development Authority (HUDA)	Responsible for facilitating and overseeing urban growth. Its responsibilities encompass land acquisition, development, and subsequent sale for residential, industrial, and commercial purposes.
Haryana Finance Corporation (HFC)	Meets the credit needs of small and medium-sized businesses by advancing term loans.

Key industrial policies in Haryana

Policy	Features
Haryana Enterprises and Employment Policy 2020	Aims to enhance Haryana’s appeal as an attractive investment destination, projecting investments exceeding INR 1 trillion (US$12.02 billion) and the creation of 500,000 jobs within the state.
Haryana Electric Vehicle Policy 2022	2 focused schemes for buyers and 8 focused schemes for manufacturers. Incentives for EV manufacturers include early bird capital subsidy, one-time seed and conversion fund, partial indirect tax reimbursement, 100% stamp duty reimbursement, subsidy covering utilities.
Haryana Agri-Business and Food Processing Policy 2018	Promotes new ventures in the food production sector, bolstering Haryana’s investment climate and assisting farmers through innovative agro-marketing regulations.
Textile Policy 2019	Strives to generate 50,000 new employment opportunities within the textile industry while ensuring balanced growth across all regions.
IT & ESDM Policy 2017	Seeks to attract investments totaling US$2.79 billion in the IT and EDSM sector over the next five years, generating employment for 120,000 individuals and elevating the sector’s contribution to the state’s GDP from 9.4 percent to 15 percent.
Aerospace and Defence Policy 2016	Aims to secure orders for at least 15 percent of the offsets mandated for Indian companies, leveraging existing support infrastructure, and encouraging the growth of new MSMEs. Additionally, the policy targets over INR 250 billion (US$3.55 billion) in investments spanning training, research, design, production, maintenance, quality control, and design throughout the value chain.
Haryana Sports and Physical Fitness Policy 2015	Pursues two primary objectives: “Sports for All” and “Excellence in Sports.” The policy encompasses five key aspects, encompassing sports initiation, recreational sports, competitive sports, high-achievement sports, and sports development.
Enterprise Promotion Policy, 2015	Focuses on streamlining the business environment, reducing the cost of conducting business, and providing dedicated support to micro, small, and medium-sized enterprises (MSMEs).
New Integrated Licensing Policy (NILP) 2015	Designed to establish large, high-potential urban centers in the state and enable real estate companies to initiate projects that are under 100 acres in size.
Haryana State Employment of Local Candidates Act, 2020	Mandates that 75 percent of private sector job opportunities are reserved for local candidates from the state, with salaries reaching up to INR 50,000 (US$686.24) per month.
Jal Jeevan Mission	Within the Jal Jeevan Mission (JJM), Haryana aims to connect 4.09 lakh homes to piped water supply in FY22, with the objective of fulfilling the JJM targets by November 2022.
Startup Policy 2017	Seeks to position Haryana as a dynamic and innovative startup hub, providing support and guidance to the state’s emerging entrepreneurs and business talent. The policy also aims to attract investors to participate in Haryana’s development and startup ecosystem.

Key investment opportunities in Haryana

Area	Description
Kundli-Manesar-Palwal (KMP) Expressway	A 135.65km highway designed to streamline access to Delhi. Adjacent to the highway, a Global Economic Corridor within a 1km radius will be developed. This corridor encompasses the potential for investments approaching US$10 billion. Planned growth includes the establishment of five towns, including Panchgram.
Global Vision for KMP Corridor	Part of the Panchgram project, aiming to create five new towns across 250,000 hectares of land. The Panchgram project is a response to the rapid urbanization taking place in the region.
Integrated Multi Modal Logistics Hub	Located on more than 1200 acres of land in Nangal Chaudhary, Narnaul, this project is set to become the largest logistics hub in North India. Anticipated investments are approximately INR 50 million (US$601,608). It is projected to drastically reduce the time required for transporting goods from 14 days to a mere 14 hours.
Global City at Gurugram	This project, an integral part of the Manesar Urban Development Complex in Delhi NCR, seeks to harmonize growth with innovative ideas. It encompasses 1000 acres of land within the Haryana sub-region of the Delhi-Mumbai Industrial Corridor. The investment potential for this endeavor amounts to US$15 billion. The Japan International Co-operation Agency (JICA) is slated to fund this initiative.
Integrated Aviation Hub at Hisar	As part of Phase I of the Integrated Aviation Hub, the Passenger Terminal has been inaugurated, marking the establishment of the first civil airport in the state at Hisar. This project spans 4200 acres of land and features an MOU between the Civil Aviation Department of Haryana and airliner Spice Jet Ltd. It is set to offer rapid rail and road connectivity directly to the airport, positioning it as an ideal logistics hub.

Conclusion

Haryana, a dynamic and rapidly evolving state in India, is strategically located within the National Capital Region of Delhi, making it a vital player in India’s economic growth. With robust infrastructure, including well-maintained road networks, a growing city metro rail and national railway system, and upcoming developments in the air transport sector, Haryana is facilitating its rapid transition from being an agrarian economy to an industrial powerhouse.

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Key initiatives like the Kundli-Manesar-Palwal Expressway and the Global Vision for KMP Corridor are attracting substantial investments to the state and driving urban development beyond key hubs like Gurugram.

Haryana’s focus on manufacturing, innovation, entrepreneurship, and sustainability presents abundant opportunities for businesses and investors across industrial and service sectors. This is also helped by the access to a talented workforce attracted to the regional proximity to the capital, Delhi. Overall, Haryana’s strategic policies and ambitious projects position it to be a significant contributor to India’s ascent as a global economic powerhouse.

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