Key Manufacturing Clusters in India: A Sector-Wise Breakdown

Posted by Written by Archana Rao Reading Time: 15 minutes

India boasts a variety of manufacturing clusters, each specializing in distinct sectors, contributing significantly to domestic production and exports.

Supported by various central government schemes and the rapid infrastructure improvements, these clusters are key to India’s rise as a global manufacturing hub.


Industrial clusters in India

India has emerged as a global manufacturing hub due to its large, skilled labor force, improving infrastructure, and favorable government policies like the Make in India initiative and Production-Linked Incentives program.

India’s manufacturing clusters, spread across its states, showcase the country’s industrial diversity and global competitiveness. From automobiles and textiles to pharmaceuticals and electronics, each cluster contributes significantly to India’s economy, creating jobs, driving exports, and attracting foreign direct investment. With continuous infrastructure improvements and policy support, these clusters are poised to strengthen India’s position as a global manufacturing hub.

Automotive industry

India’s automotive manufacturing capacity includes passenger vehicles, commercial vehicles, two-wheelers, and auto components. The country is a prominent exporter of small cars and auto components, with significant markets in Europe, Africa, and Latin America.

Key clusters:

  1. Chennai (Tamil Nadu): Often referred to as the “Detroit of India,” Chennai houses major global automotive manufacturers such as Ford, Hyundai, BMW, and domestic giants like Ashok Leyland. The region is also known for its extensive auto component manufacturing.
  2. Pune (Maharashtra): A major automotive hub with manufacturers like Tata Motors, Mercedes-Benz, and Bajaj Auto, Pune also focuses on the production of components and engineering services.
  3. Gurugram-Manesar (Haryana): Home to Maruti Suzuki and Hero MotoCorp, this cluster has evolved into a significant automotive manufacturing base, including auto parts and engineering facilities.
  4. Sanand (Gujarat): The Sanand Industrial Estate is notable for the Tata Nano plant and hosted number of international automotive companies, such as Ford. Ford Motors, however, discontinued its sales and manufacturing operations in India in 2020.

State

Location

Automobile manufacturer

Andhra Pradesh

Sri City

 

Satyavedu

Vijayawada

 

 

Penukonda

Isuzu Motors India

Kobelco

Hero Motor Corp.

Ashok Lyland Ltd.

AVERA New and Renewable Energy

Kia Motors

Telangana

Zahirabad

Deccan Auto

Mahindra & Mahindra

Haryana

Dharuhera

Gurgaon

 

 

Faridabad

 

 

 

Manesar

Hero Moto Corp

Hero Moto Corp

Suzuki Motorcycle India Limited

India Yamaha Motor

Escorts Tractors

JCB

Maruti Suzuki

Honda Motorcycle

Maruti Suzuki

Himachal Pradesh

Nlagar

Amb

Parwanoo

TVS Motors

International Cars and Motors

TAFE Tractors

Kerala

Madhya Pradesh

Pithampur

 

 

 

Mandideep

Mahindra Two-wheelers

Eicher Motors

Hindustan Motors

CNH Industrial

TAFE Tractors

Punjab

Nawanshahar

Hoshiarpur

Mohali

Morinda

Patiala

Barnala

Nabha

SML Isuzu Limited

International Tractors Limited

Punjab Tractor Motors Limited

Class India Limited

John Deere India Limited

Standard Tractors Limited

Preet Tractors Limited

Rajasthan

Tapukara

 

 

Alwar

 

Neemrana

 

Jaipur

Honda Cars India

Honda Motorcycle and Scooters

Ashok Leyland Limited

TAFE Tractors

Hero Motocorp + Harley Davidson

Mahindra & Mahindra

Uttar Pradesh

Lucknow

Greater Noida

Tata Motors

Honda Cars India

New Holland Agriculture

India Yamaha Motors

Honda Cars India

Uttarakhand

Haridwar

 

Pantnagar

Hero MotorCorp

Mahindra & Mahindra

Bajaj Auto

Ashok Leyland

Tata Motors

Karnataka

Mysore

Kolar

 

 

Bengaluru

 

 

Bidadi

 

Doddaballapura

Dharwad

Hoskote

 

TVS Motors

Honda Motorcycle and Scooters

Scania Commercial Vehicles

Toyota Kirloskar Motor Private Limited

Mahindra Reva

Toyota Kirloskar Motor Private Limited

TAFE Tractors

Tata Motors

Volvo Buses India Private Limited

Tamil Nadu

Hosur

 

 

Chennai

 

 

 

 

 

 

 

 

 

Kanchipuram

Vellore

Oragadam

Thiruvallur

 

Avadi

Ambattur

Ranipet

Ennore

Kalladipatti

TVS Motors

Ashok Leyland

Kamaz Vectra Motors Limited

Royal Enfield

India Yamaha Motor

Daimler Bharat Benz

Motorrad

Force Motors

Wright Bus

Isuzu

Schwing Stetter

Komatsu

TAFE Tractors

Mahindra & Mahindra

SAME Deutz-Fahr

Royal Enfield

Royal Enfield

Mitsubishi

Heavy Vehicles Factory

TI Cycles

Bavina Cars

Ashok Leyland

TAFE Tractors

West Bengal

Hindmotor

Kharagpur

Hindustan Motors

Tata Motors

Gujarat

Dalotporda

Halol

Sanand

Bhuj

VR Motors

SAIC Motors India

Tata Motors

Asian Motorworks

Maharashtra

Baramati

Pune

Ahmadnagar, Pune

Ranjangaon

Nashik

Chakan

 

 

 

 

 

 

Aurangabad

Kandivali

Talegaon

Pargaon

Sanaswadi

Wai

Pimpri

Navi Mumbai

Alibaug

Banda

Thane

Piaggio, Vespa, Aprillia

General Motors

MV Agusta

Tata Motors

Mahindra & Mahindra

Mahindra, Ssangyong

Bajaj Auto

India Kawasaki Motors

Sany India

Hyundai Construction Equipment

JCB

Vedant Cranes

John Deere

Hyosung, Benelli

Premier

Leibherr

Chinkara Motors

Premier

Eicher Motors

Chinkara Motors

Caterpillar

Eicher Motors

Source: Scribd

Textiles and apparel

India’s textile and apparel production capacity encompasses cotton and synthetic textiles, knitwear, woolen apparel, and home textiles. As one of the world’s largest exporters in this sector, India experiences strong demand from markets in the U.S., Europe, and the Middle East.

 Key clusters:

  1. Tiruppur (Tamil Nadu): Known as the “Knitwear Capital of India,” Tiruppur specializes in knitted garments, particularly cotton-based products. It is a major export hub for textiles, serving markets in Europe and the U.S.
  2. Ludhiana (Punjab): This city is famous for its woolen apparel and knitwear, producing a large volume of winter wear for domestic and international markets.
  3. Surat (Gujarat): A prominent textile cluster, Surat specializes in synthetic textiles and is one of the largest centers for the production and processing of polyester fabrics in India.
  4. Bhiwandi (Maharashtra): Known for its power loom industry, Bhiwandi is a major player in producing synthetic and cotton fabrics.

1.      Textile Parks under SITP

S.No.

Name of Park

Location

State

1

Brandix India Apparel City Private Limited

Vishakhapatnam

Andhra Pradesh

2

Hindupur Vyapar Apparel Park Limited

Ananthpur

3

MAS Fabric (India) Park Ltd

Nellore

4

Guntur Textile Park

Guntur

5

Rangaraya Textile Park, Godavari

West Godavari

6

Tareshkewara Textile Park Pvt. Ltd

Nellore

7

Goutham Budha Textile Park

Guntur

8

Prag Jyoti Textile Park

Darrang

Assam

9

JVL Textile Park

Rohtas

Bihar

10

Gujarat Eco Textile Park Limited

Surat

Gujarat

11

Mundra SEZ Textile & Apparel Park Limited

Kutch

12

Fairdeal Textile Park Pvt. Ltd

Surat

13

Vraj Integrated Textile Park Limited

Khed

14

Sayana Textile Park Ltd

Surat

15

Surat Super Yarn Park Limited

Surat

16

RJD Integrated Textile Park

Surat

17

Kejriwal Integrated Textile Park Pvt. Ltd

Surat

18

Madhav Textile Park

Surendrenagar

19

Amitara Green Hi Tech Textile Park

Kheda

20

Palsana Textile Park

Surat

21

Shanti Textile Park Gujarat

Surat

22

NSP Infrastructure

Surat

23

Karnaj Integrated Textile Park

Surat

24

Aalishan Eco Textile Park Pvt. Ltd

Panipat

Haryana

25

Himachal Textiles Park

Una

Himachal Pradesh

26

Kashmir Wool and Silk Textile Park

Ghatti

J &K

27

Jammu & Kashmir Integrated Textiles Park

Kathua

28

Doddabalapur Integrated Textile Park

Doddabalapur

Karnataka

29

Gulbarga Textiles Park

Gulbarga

30

CLC Textile Park Pvt Ltd

Chhindwara

Madhya Pradesh

31

Baramati Hi Tech Textile Park Limited

Baramati

Maharashtra

32

Islampur Integrated Textile Park Pvt. Ltd

Islampur

33

Latur Integrated Textile Park Pvt. Ltd

Latur

34

Metro Hi-Tech Cooperative Park Limited

Ichalkaranji

35

Pride India cooperative Textile park Limited

Ichalkaranji

36

Purna Global Textile Park Ltd

Hingoli

37

Asiatic Cooperative Powerloom Textiles Park

Solapur

38

Deesan Infrastructure Pvt. Ltd

Dhule

39

Asmeeta Infratech Pvt. Ltd

Bhiwandi

40

Kallappana Awade Textiles Park, Kolhapur

Ichalkaraji

41

Khed Textile Park

Pune

42

Sundararao Solanke Cooperative Textile Park

Beed

43

Dhule Textile Park

Dhule

44

Satyaraj Integrated Textile Park

Kolhapur

45

Shree Ganesh Integrated Textile Park Pvt. Ltd

Dhule

46

Hinganghat Integrated Textile Park

Vidharbha

47

Lotus Integrated Tex Park

Punjab

Punjab

48

Rhythm Textile & Apparel Park Ltd

Nawanshahr

49

Ludhiana Integrated Textile Park Ltd

Ludhiana

50

Progressive Integrated Textile Park

Bhatinda

51

Jaipur Integrated Texcraft Park Pvt. Ltd

Bagru

Rajasthan

52

Jaipur Texweaving Park Limited

Kishangarh

53

Kishangarh Hi-Tech Textile Park Limited

Kishangarh

54

Next Gen Textile Park Pvt. Ltd

Pali

55

Jaipur Kaleen Park Ltd.

Dausa

56

Himmada Integrated Textiles Park

Balotra

57

Srinath Integrated Textile Park

Bhilwara

58

Palladam Hi-Tech Weaving park

Palladam

Tamil Nadu

59

Karur Integrated Textile Park

Karur

60

Madurai Integrated Textile Park Ltd

Madurai

61

The Great Indian Linen & Textile Infrastructure Company

Perundurai

62

SIMA Textile Processing Centre

Cuddalore

63

Komarapalayam Hi-Tech Weaving Park Ltd.

Komarapalayam

64

Kanchipuram Arigrar Anna Handloom Park

Kanchipuram

65

SLS Textile Park

Hosur

66

Pallavada Technical Textiles Park Ltd.

Erode

67

Pochampally Handloom Park Limited

Pochampally

Telangana

Telangana

68

Whitegold Integrated Spintex Park

Ranga Reddy District

69

Avantika Textile Park

Medak

70

Ecotex Textile and apparel park Pvt. ltd

Mirganj

Uttar Pradesh

71

Sri Lakshmi Textile Park

Kanpur

72

Farrukhabad Textile Park Pvt. Ltd.

Farrukhabad

73

EIGMEF Apparel Park Limited

Kolkata

West Bengal

74

Hosiery Park

Howrah

Source: Ministry of Textile

Pharmaceuticals and biotech

India’s pharmaceutical industry presents investment opportunities in producing APIs, biosimilars, vaccines, nutraceuticals, as well as food and drug testing and contract research. India stands as the world’s largest producer of generic drugs, supplying significant markets in the U.S., Europe, and Africa. Emerging areas include focus on delivering complex solutions, including molecule generation, synthesis of active ingredients, preclinical studies, pharmaceutical production technology, clinical trials, and the experimental production of pharmaceutical products.

Key clusters:

Maharashtra, Gujarat, Andhra Pradesh, Himachal Pradesh, Rajasthan, Telangana, Uttar Pradesh, Goa, Karnataka, Tamil Nadu, Haryana, Uttarakhand host the major pharmaceutical manufacturing clusters in the country.

  1. Hyderabad (Telangana): Referred to as “Genome Valley,” Hyderabad is a leading hub for pharmaceutical manufacturing and biotech research. Major companies like Dr. Reddy’s Laboratories and Aurobindo Pharma are based here.
  2. Ahmedabad (Gujarat): Ahmedabad is home to major pharmaceutical companies such as Zydus Cadila and Torrent Pharma. It also focuses on bulk drug manufacturing.
  3. Mumbai (Maharashtra): The pharmaceutical and biotech cluster in Mumbai houses both large companies like Lupin and Sun Pharmaceuticals and many smaller firms involved in formulation development.

Electronics and IT hardware

India’s electronics and IT hardware industry encompasses the production of smartphones, consumer electronics, telecom equipment, and IT hardware. The country is gradually establishing itself as a key exporter in this sector, particularly focusing on mobile phones, IT hardware, and electronic components. Various policies like the PLI Scheme and Electronics Manufacturing Cluster 2.0 Scheme support investments in this area.

Key clusters:

  1. Bengaluru (Karnataka): Known primarily for its IT industry, Bengaluru has also emerged as a significant hub for electronics manufacturing, particularly in semiconductors and embedded systems.
  2. Noida (Uttar Pradesh): Noida has become a key center for consumer electronics manufacturing, with global giants like Samsung and Oppo setting up major facilities.
  3. Sriperumbudur (Tamil Nadu): This cluster is home to major electronics manufacturing, including Foxconn and Flextronics, which produce smartphones and other consumer electronics for brands like Apple and Xiaomi.
  4. Chennai (Tamil Nadu): Chennai is another important hub for electronics, including telecom equipment and consumer electronics.

Electronics Manufacturing Cluster 2.0 (Approved Projects)

S.No.

PIA Name

Location

Area

Approved Date

1

Karnataka Industrial Areas Development Board (KIADB)

Kotur & Belur (V), Dharwad (T)

224.50 Acres

23.03.2023

2

Maharashtra Industrial Development Corporation (MIDC)

Village Shirur & Village Karde Pune district, Maharashtra

297.11 Acres

31.10.2022

3

Telangana State Industrial Infrastructure Corporation Limited (TSIIC)

Divitipally, Mahabubnagar, Telangana State

377.65 Acres

29.08.2024

4

State Infrastructure and Industrial Development Corporation of Uttarakhand Limited (SIIDCUL)

SIIDCUL Integrated Industrial Estate, Kashipur, Opposite IIM Kashipur Campus,

133.82 Acres

28.04.2023

5

Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC)

Ambavaram (V), Vallur (M); Kopparthy (V), C.K.Dinne (M) and Rampathadu (V), Pendlimarry (M)

540.00 Acres

18.03.2021

6

Haryana State Industrial and Infrastructure Development Corporation Ltd (HSIIDC)

Industrial Model Township, Sohna (Haryana)

500.00 Acres

30.09.2021

Source: Ministry of Electronics and Information Technology

 

State

Location

Project Name

Area

(In acres)

Date of Final Approval

1

Andhra Pradesh

Sathyavedu Mandal, Chittoor

EMC at Satyavedu Mandal, Sri City, A.P (M/s. Sri City Pvt. Ltd.)

94.00

20-Jul-2016

2

Andhra Pradesh

Tirupati

EMC-I at Tirupathi, A.P (M/s. Andhra Pradesh Industrial Infrastructure Corporation)

113.27

07-Dec-2017

3

Andhra Pradesh

Yerpedu Mandal, Chittoor

EMC-II at Vikruthamala, Tirupathi, A.P (M/s. A.P. Industrial Infrastructure Corporation-APIIC)

501.40

02-Aug-2017

4

Assam

Kamrup

EMC at Bongora, Assam (M/s. Assam Electronics Development Corporation Ltd.-AMTRON)

100.00

01-Feb-2018

5

Chhattisgarh

Raipur

EMC at Naya Raipur, Chhattisgarh (M/s. Chhattisgarh State Industrial Development Corporation Ltd.-CSIDC)

116.48

07-Jan-2016

6

Goa

North-Goa

EMC at Tuem, Pernem, Goa (DoIT, Government of Goa)

147.55

03-Mar-2017

7

Gujrat

Kutch

EMC at Mundra, Gujarat (M/s. Mundra Solar Technopark Private Limited-MSTPL)

631.38

04-Jul-2016

8

Jharkhand

Saraikela-Kharsawan

EMC at Adityapur, Jharkhand (M/s. Adityapur Industrial Area Development Authority -AIADA)

82.49

22-Sep-2015

9

Karnataka

Mysore

CFC at Mysore, Karnataka (M/s. Mysore ESDM Cluster)

1.50

15-Sep-2015

10

Kerala

Ernakulam

EMC at Kakkanad, Kerala (M/s. Kerala Industrial Infrastructure Development Corporation -KINFRA)

66.87

24-Aug-2016

11

Madhya Pradesh

Bhopal

EMC at Badwai-Bhopal, M.P. (M/s. Madhya Pradesh State Electronics Development Corporation Ltd.-MPSEDC)

50.00

25-Aug-2014

12

Madhya Pradesh

Jabalpur

EMC at Purva-Jabalpur, M.P (M/s. Madhya Pradesh State Electronics Development Corporation Ltd.-MPSEDC)

40.00

25-Aug-2014

13

Maharashtra

Aurangabad

CFC at Aurangabad, Maharashtra (M/s. Deogiri Electronics Cluster Pvt. Ltd.-DECPL)

1.98

03-Mar-2017

14

Maharashtra

Pune

CFC at Pune, Maharashtra (M/s. MCCIA Electronic Cluster Foundation-MECF)

0.61

13-Dec-2017

15

Orissa

Khurda

EMC at Bhubaneswar, Odisha (M/s Odisha Industrial Infrastructure Development Corporation-IDCO)

203.37

05-Sep-2016

16

Rajasthan

Alwar

EMC at Karoli IA,Rajasthan (M/s. Rajasthan State Industrial Development & Investment Corporation Ltd.-RIICO)

121.51

15-Dec-2017

17

Rajasthan

Bhiwadi

EMC at Salarpur IA, Rajasthan (M/s. ELCINA Electronics Manufacturing Cluster Pvt. Ltd.-EEMCPL)

50.34

15-Sep-2015

18

Telangana

Hyderabad

EMC at Hyderabad,Telangana (M/s. Telangana State Industrial Infrastructure Corporation Ltd.-TSIIC)

603.52

02-Aug-2017

19

Telangana

Ranga Reddy

EMC at Maheshwaram,Telangana (M/s.Telangana State Industrial Infrastructure Corporation Ltd.-TSIIC)

310.70

08-Aug-2017

20

Uttar Pradesh

Greater Noida

EMC at Greater Noida, UP (M/s. TEGNA Electronics Pvt. Ltd.-TEPL)

99.41

21-Feb-2018

21

West Bengal

South 24 Parganas

EMC at Falta,West Bengal (M/s. West Bengal Electronics Industry Development Corporation Ltd.-WEBEL)

58.04

04-Feb-2016

22

West Bengal

North 24 Parganas

EMC at Naihati, West Bengal (M/s. West Bengal Electronics Industry Development Corporation Ltd.-WEBEL)

70.00

21-Aug-2016

Source: Ministry of Electronics and Information Technology

Chemicals and petrochemicals

India’s industrial capacity in this sector includes the production of organic and inorganic chemicals, petrochemicals, specialty chemicals, and plastics. The country is a leading exporter of chemicals and petrochemical products, serving markets in Asia, Europe, and North America.

 Key clusters:

  1. Vadodara and Jamnagar (Gujarat): Gujarat is the epicenter of India’s chemicals and petrochemicals industry, with large refineries, petrochemical plants, and chemical manufacturing units. Jamnagar hosts the world’s largest oil refinery complex, operated by Reliance Industries.
  2. Mumbai (Maharashtra): Mumbai, being a major port city, is a hub for the chemical and petrochemical industries, including companies like BASF and Dow Chemicals.
  3. Ankleshwar and Vapi (Gujarat): These regions focus heavily on chemicals and dye production, housing some of the largest industrial estates dedicated to chemical manufacturing.

Petroleum, Chemical and Petrochemical Investment Regions (PCPIRs)

State

Location

Andhra Pradesh

Vishakhapatnam

Gujarat

Dahej

Odisha

Paradeep

Tamil Nadu

Cuddalore and Naghapattinam

Source: Department of Chemical and Petrochemical

Chemical Clusters in India

State

Location

Gujarat

Ahmedabad, Ankleshwar, Nandaseri, Valsad and Vapi

Kerala

Ernakulum

Uttar Pradesh

Ghaziabad

Jharkhand

Jamshedpur

Haryana

Karnal

Maharashtra

Thane

Source: Sectoral Roadmap for MSME (Chemical Industries), TERI Report

Plastic Parks in India

State

Location

Assam

Tinsukia

Chhattisgarh

Sarora

Jharkhand

Deoghar

Karnataka

Ganjimu,

Madhya Pradesh

Bilaua, Tamot

Odisha

Jagatsinghpur

Tamil Nadu

Thiruvallur

Uttar Pradesh

Gorakhpur

Uttrakhand

Sitarganj

Source: India Briefing

Petrochemical plants in India (Existing and New)

State

Location

Maharashtra

Ratnagiri, Nagothane, Mumbai

Kerala

Kochi

Tamil Nadu

Cuddalore, Tuticorn

Gujarat

Vadodara, Jamnagar, Ankleshwar, Dahej, Hazira

Haryana

Panipat

Punjab

Bhatinda

West Bengal

Haldia

Karnataka

Mangalore

Uttar Pradesh

Auraiya

Source: Report by Ministry of Chemicals and Fertilizers, Institute of Competitiveness

Gems and jewelry

India’s industrial production capacity in the gems and jewelry sector includes the crafting and processing of diamonds, gold, and precious gemstone jewelry. The country ranks among the top exporters of diamonds and gold jewelry, with significant markets in the U.S., Europe, and the Middle East.

 Key clusters:

  1. Surat (Gujarat): Surat is globally renowned for its diamond cutting and polishing industry, processing about 90 percent of the world’s diamonds. The city is home to a highly skilled workforce specializing in this trade.
  2. Mumbai (Maharashtra): Mumbai is the leading hub for gold jewelry manufacturing and exports, with many of India’s top jewelry brands headquartered here. It also plays a significant role in the diamond trade.
  3. Jaipur (Rajasthan): Famous for its colored gemstone industry, Jaipur is a global center for the cutting and polishing of precious and semi-precious stones.

Gems and Jewelry Manufacturing Clusters in India

Region/State

Major clusters

No. of manufacturing units

East

Paschim Medinipur, Howrah, Nadia, and South Twenty-Four Parganas

46

Gujarat

Rajkot, Surat, Vadodara, and Bhavnagar

12

North

Agra, Ghaziabad, Kanpur Nagar, and Varanasi

44

Rajasthan

Bikaner, Jodhpur, Nagaur, and Churu

21

South

Chittoor, Davanagere, Coimbatore, and Salem

36

West

Mumbai, Thane, Kolhapur, and Salem

26

Source: GJEPC

Engineering goods and machinery

India’s manufacturing capacity in this sector includes heavy machinery, pumps, automotive components, and industrial equipment.

Engineering goods represent a significant portion of the country’s exports, primarily targeting markets in the United States, European Union, Southeast Asia, and the Middle East. This category encompasses machinery, electrical equipment, and transport equipment, and makes a substantial contribution to India’s overall export portfolio.

 Key clusters:

  1. Coimbatore (Tamil Nadu): Known as the “Manchester of South India,” Coimbatore is a key center for the manufacturing of engineering goods, textiles machinery, pumps, and automotive components.
  2. Rajkot (Gujarat): Rajkot is a hub for the production of machine tools, bearings, and other engineering goods. It plays a vital role in supplying equipment for domestic industries and exports.
  3. Pithampur (Madhya Pradesh): Often referred to as the “Detroit of India,” Pithampur specializes in heavy machinery and engineering goods, catering to industries such as automotive, power generation, and agriculture.

Name of the Industrial Cluster

District

State

Engineering Cluster, Nashik

Nashik

Maharashtra

Hosur Engineering Industry Cluster

Krishnagiri

Tamil Nadu

Sirgitti Engineering Cluster

Bilaspur

Chhattisgarh

Source: Press Information Bureau

Other clusters in India

Science & Technology Clusters (S&T Clusters)

Cluster Name

Location

State

Bengaluru Science and Technology Cluster (BeST)

Bengaluru

Karnataka

Bhubaneshwar City Knowledge Innovation Cluster (BCKIC)

Bhubaneshwar

Odisha

Delhi Research, Implementation, and Innovation (DRIIV):

Delhi

New Delhi

Jodhpur City Knowledge and Innovation Cluster (JCKIC)

Jodhpur

Rajasthan

Pune Knowledge Cluster

Pune

Maharashtra

Research and Innovation Circle of Hyderabad (RICH)

Hyderabad

Telangana

Source: Report by Office of the Principal Scientific Adviser to the Government of India

Industrial corridors and SEZs in India: An Overview

India has been investing heavily in industrial corridors and Special Economic Zones (SEZs) to boost trade, attract investment, and drive economic growth. These zones and corridors are designed to foster industrial development, improve infrastructure, and enhance the ease of doing business.

However, challenges such as land acquisition, regulatory bottlenecks, and regional disparities need to be addressed for these initiatives to reach their full potential.

Delhi-Mumbai Industrial Corridor (DMIC)

The Delhi-Mumbai Industrial Corridor (DMIC) is one of the most ambitious infrastructure projects in India. It is a mega infrastructure initiative aimed at developing new industrial cities across six states, creating an economic backbone that links the national capital (Delhi) with India’s financial hub (Mumbai). Launched in 2006 in collaboration with the Japanese government, DMIC is a model of Public-Private Partnership (PPP) aimed at stimulating economic growth by developing smart, sustainable industrial zones.

Key Features of the DMIC

Corridor length

Approximately 1,500 km

States covered

Delhi, Uttar Pradesh, Haryana, Rajasthan, Gujarat, and Maharashtra

Primary objective

To create a global manufacturing and investment destination by offering high-quality infrastructure to industries

Smart cities

The project includes the development of several smart cities, with industrial parks, high-tech zones, and logistics hubs connected by high-speed rail, road, and ports.

Total investment

The project is expected to attract an investment of around $100 billion, with a significant contribution from Japan, which holds a 26 percent stake

Key components of DMIC:

  1. Dedicated Freight Corridor (DFC): A dedicated freight railway line connecting Delhi and Mumbai, enabling faster and more efficient transportation of goods. This will significantly reduce transportation time and costs.
  2. Industrial clusters: High-tech industrial clusters that will host manufacturing units, logistics hubs, and business parks. These clusters are designed to boost industrial output, with a focus on sectors like electronics, textiles, automobiles, and pharmaceuticals.
  3. Smart cities: Several smart industrial cities are planned along the corridor, including Dholera in Gujarat, Shendra-Bidkin in Maharashtra, and Greater Noida in Uttar Pradesh. These cities will benefit from modernized infrastructure, upgraded ICT systems, and green technology.

 Economic impact of DMIC:

  1. Boost to manufacturing: DMIC will significantly boost India’s manufacturing capabilities, making the country a global hub for various industries, such as automotive, electronics, and textiles.
  2. Employment generation: The corridor is expected to create millions of direct and indirect jobs. With large-scale industrial activity, DMIC will promote skill development and enhance local employment opportunities.
  3. Infrastructure development: The corridor will lead to the development of critical infrastructure, including roads, railways, airports, and ports. This will improve the efficiency of supply chains and reduce the cost of transportation for businesses.
  4. Attracting investment: DMIC has already attracted significant domestic and foreign investments. The presence of world-class infrastructure, coupled with supportive policies, is expected to bring more global corporations to set up manufacturing bases in India.
  5. Trade and exports: By connecting industrial hubs to ports and international markets, DMIC will enhance India’s export potential. It will enable faster movement of goods and reduce the logistics cost, thus improving India’s competitiveness in the global market.

SEZs in India

SEzs are geographically demarcated areas within a country that have economic laws different from the rest of the country. In India, SEZs were introduced to encourage foreign investment, promote exports, and develop infrastructure.

The concept of SEZs in India gained momentum with the enactment of the SEZ Act, 2005. These zones offer various incentives to attract businesses, including tax breaks, simplified regulations, and improved infrastructure.

Key features of SEZs in India:

  1. Incentives: Exemption from customs duties, excise duties, service tax, and income tax for a specified number of years.
  2. Infrastructure: SEZs are equipped with world-class infrastructure such as reliable power, efficient transportation networks, and modern facilities.
  3. Export-oriented units: Businesses in SEZs are primarily focused on exports, though they can sell in the domestic market under certain conditions.
  4. Ease of doing business: SEZs offer simplified administrative procedures and regulations, making it easier for companies to set up operations.

Types of SEZs in India

Sector-Specific SEZs

Multi-Product SEZs

These are dedicated to particular industries, such as IT/ITES, pharmaceuticals, textiles, or electronics.

These zones accommodate multiple industries and provide infrastructure for various types of manufacturing and services.

 

Special Economic Zones in India as of April 30, 2024

Number of Formal approvals (As on April 30, 2024)

423

Number of notified SEZs (As on April 30, 2024)

375 (Including 7 Central Govt.+12State Govt. / Private Sector SEZs set up prior to the enactment of SEZ Act, 2005)

Number of In-Principle Approvals (As on 30.04.2024)

35

Operational SEZs (As on March 31, 2024)

280

Units approved in SEZs (As on December 31, 2023)

5,711

Source: Fact Sheet, SEZ India

Economic impact of SEZs:

  1. Growth in exports: SEZs have played a significant role in increasing India’s exports. In sectors like IT and pharmaceuticals, SEZs account for a large proportion of the country’s total exports.
  2. Foreign direct investment (FDI): SEZs have been instrumental in attracting FDI, particularly in sectors such as electronics, automotive, and information technology.
  3. Job creation: SEZs have generated a large number of direct and indirect employment opportunities, particularly in manufacturing, IT, and services.
  4. Infrastructure development: The establishment of SEZs has led to the development of industrial infrastructure, including roads, ports, and power facilities.
  5. Regional development: SEZs are often set up in underdeveloped or rural areas, leading to the economic development of those regions.

Sector-wise Distribution of Operational SEZs (Data as of April 30, 2024)

Agro Processing

2

Airport based multiproduct

0

Alumina/Aluminium

2

Auto/Automobile Ancillary

2

Aviation/Aerospace/Copper

3

Mineral Based Industries

1

Biotechnology

7

Building Products / Transport equipments

2

Electronic product/ Semiconductor/ Telecom equipments

5

Engineering/Metallurgi cal Engineering

13

Footwear/Leather

4

Food Processing

2

FTWZ (including Multi Sector SEZ)

5

Gems and Jewellery

4

Handicrafts & Carpets

1

IT/ITES/Electronic Hardware and Software

169

Multi-Product

25

Multi-Services/MultiSector SEZ

3

Non-Conventional Energy

2

Petrochemical/ Petroleum/Oil and Gas

0

Pharmaceuticals/chemicals

14

Port-Based MultiProduct

3

Power/Solar

4

Textiles/Apparel/Wool

7

Writing and printing paper mills

0

Granite processing Industries and other allied machinery/ manufacturing

0

Source: Fact Sheet, SEZ India

Challenges for SEZ development in India:

  1. Land acquisition issues: Acquiring land for SEZs has been a significant challenge, often leading to conflicts with local communities.
  2. Regulatory complexity: Despite the incentives, businesses often face bureaucratic hurdles, which complicates the ease of doing business.
  3. Impact of external factors: Global economic slowdowns and shifting trade policies can affect the demand for exports from SEZs, impacting their growth.
  4. Regional concentration of SEZs: SEZs are concentrated in certain states, such as Maharashtra, Gujarat, and Tamil Nadu, leading to an imbalance in regional development.

State-wise Distribution of Operational SEZs (Data as of April 30, 2024)

Andhra Pradesh

25

Arunachal Pradesh

0

Chandigarh

2

Chhattisgarh

1

Delhi

0

Goa

0

Gujarat

21

Haryana

8

Jharkhand

1

Karnataka

37

Kerala

20

Madhya Pradesh

6

Maharashtra

38

Manipur

0

Nagaland

0

Odisha

5

Puducherry

0

Punjab

3

Rajasthan

3

Sikkim

0

Tamil Nadu

55

Telangana

38

Tripura

0

Uttar Pradesh

14

West Bengal

7

Source: Fact Sheet, SEZ India

Opportunities for export-oriented units in India

Export-Oriented Units (EOUs) are businesses in India focused on exporting goods and services to international markets. Established under the Export-Import Policy of 1980, EOUs play a vital role in enhancing exports and foreign exchange earnings by creating an export-driven ecosystem with various incentives. Defined in the Foreign Trade Policy (FTP), EOUs commit to exporting their entire production, excluding permissible sales in the Domestic Tariff Area (DTA). Their activities encompass manufacturing, repair, service rendering, software development, and agriculture.

To set up an EOU, an application must be submitted using the ANF 6A form, along with a fee of INR 5,000 (US$59.45) and necessary documents. The Unit Approval Committee reviews applications within 15 days, and upon approval, a Letter of Permission (LoP) is issued. EOUs must maintain a positive Net Foreign Exchange (NFE) and sign a Legal Undertaking with the Development Commissioner.

EOUs enjoy various benefits, including customs and excise duty exemptions on imported and locally procured goods, GST exemptions on exports, and access to duty-free raw materials. They also benefit from streamlined regulations, world-class infrastructure, and the ability to retain 100 percent of foreign exchange earnings, enhancing financial flexibility.

The growth opportunities for EOUs are substantial, driven by India’s integration into global supply chains, particularly in sectors like automotive, pharmaceuticals, textiles, and IT/ITES. Government initiatives, such as “Make in India,” further support export capacity. EOUs also gain from India’s strategic location and trade agreements that provide preferential market access.

Looking ahead, the future for EOUs is promising, with trends indicating a diversification of export markets, a shift toward sustainable manufacturing practices, and increased investment in technology. By focusing on producing high-value products and adapting to market demands, EOUs can significantly contribute to India’s economic growth and foreign trade performance.

(US$1 = INR 84.11)

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