Madhya Pradesh: The emerging manufacturing hub

  • Articles
  • Sep 30,23
As India gains the center stage of the world, Madhya Pradesh is slowly emerging as the centre of attraction for establishment of industries and investment. With MP targeting for $ 550 billion state GDP by 2026, the government is laying emphasis on technology-driven economy with a focus over enhancing productivity in all the sectors.
Madhya Pradesh: The emerging manufacturing hub

Madhya Pradesh - considered to the heart of incredible India - offers excellent support infrastructure for industrial growth. It has a robust rail network, national highway network, five commercial airports and six inland container depots. The state has a strong base of mineral resources and accounts for 14 per cent of India's total cement production.

While India is aiming for an economy of $ 5 trillion by 2026, Madhya Pradesh is targeting to reach $ 550 billion by then. "Madhya Pradesh has already created the blueprint for achieving a $ 550 billion SGDP whilst laying emphasis on technology-driven economy and with a focus over enhancing productivity in all the sectors including textiles," said Dr Navneet Mohan Kothari, Managing Director, Madhya Pradesh Industrial Development Corporation (MPIDC), during an event in Mumbai recently.

There are more than 300 industrial areas and three parks (for food, plastics & medical devices) in the state. The state is continuously working on encouraging investment in the state in sectors like pharma, automobile, skill development, information technology, defence, renewable energy, textiles, etc. Madhya Pradesh is now setting-up a floating power plant on the water surface of dams in Omkareshwar.



Madhya Pradesh is home to all types of industries which range from automobile to pharmaceutical and from software to retail and from textile trading to real estate. While the textile manufacturing and trading is oldest business to contribute to economy, the real estate has emerged very fast in past few years. There are several economic zones in state which promote exports and economic development of Madhya Pradesh. On the automobile industry front, Pithampur is also known as Detroit of India due to presence of Indore special economic zone. Companies based on mineral substances and readymade garments also play a significant role in industrial growth of state. 

About the economy
Madhya Pradesh’s economy has witnessed annual growth of about 6.6 percent on average between 2011-12 and 2021-22, the fourth highest rate of growth among states with a state GDP (GSDP) of Rs 1 trillion and above during this period, as per The Print report. During this 10-year period, manufacturing output of the state saw a growth of 6.22 per cent per annum. At present, manufacturing, the backbone of industry, accounts for 17 per cent of MP's GDP. 

Madhya Pradesh has been developing policies according to the needs of various industries. In order to establish more MSMEs in the area of manufacturing production or the businesses sector, MP Government has come up with Mukhya Mantri Udyam Kranti Yojna. Under this scheme, the government gives 3 per cent interest subvention for loans ranging between the amount of Rs 50,000 to Rs 50 lakh. The SC/ST and OBC departments also have come up with their own schemes pertaining to establishment of businesses and MSME units.

The government is developing the Indore-Pithampur economic corridor, which has 500 acres of commercial land available on both sides, in plug-play infrastructure model. While MP has established IT parks in Bhopal, Gwalior, and Jabalpur, it has set up electronics manufacturing clusters in Bhopal and Jabalpur.

Cultivating growth
At the two-day flagship event of “Invest Madhya Pradesh: Global Investors Summit” in January 2023, the state received investment proposals to set up industries worth more than Rs 15,425 billion (refer Table 1). These proposals are expected to provide employment to 29 lakh people.



Some of the companies investing in the state are:

  • Adani Agro Oil and Gas: Plans to invest Rs 600 billion in sectors such as minerals, energy, agriculture, and coal
  • Reliance Industries: Keen to make a big investment in the solar energy sector and setting-up complete textile processing units in the state
  • ITC Group: Targets to increase ITC-operated farmer produce companies (FPOs) in the state from 300 to 1000, with an investment of Rs 15 billion
  • Hong Kong’s Epic Group: To invest Rs 4 billion in a vertical fabric and garment unit near Bhopal

Textile parks
The textile and garment sector offers employment to a large number of people. MP stands in fourth place in the production of readymade garments but is aiming for the top position in the country. Of the seven PM Mega Integrated Textile Region and Apparel (MITRA) parks announced by the Union Government, one will be set up in Bhainsola village in Dhar on more than 1,200 acre. As textile and apparels are a labour intensive sector, the industry department has planned for constructing dormitories and accommodation for the workforce along with several other industrial friendly features equipped with advanced technology and solutions.

Dhar park is expected to play an important role in the already existing supremacy of MP in the textile sector. The scheme also aims to boost exports by strengthening the competitiveness of the textile sector and helping achieve economies of scale.

"Madhya Pradesh is competing not only to achieve the top slot in textile production and exports in the nation but is directing its efforts to position itself a leading hub for textiles and with the upcoming PM MITRA Park across at 1563 acres at Bhensola, Dhar shall further add to State’s inherent strengths in this sector to achieve 'Farm to Fibre to Fabric to Fashion to Foreign'," commented Dr Navneet Mohan Kothari.

Automotive: Speedy growth
Automotive and auto component industries also have major presence in the state. Currently, Madhya Pradesh houses one of the leading auto clusters of India at Pithampur near Indore and at Mandideep near Bhopal. There are more than 10 Original Equipment Manufacturers (OEMs) and 200 auto component manufacturers present in the state, which employs a workforce of about 200,000 technical professionals. The Pithampur Auto Cluster alone employs 25,000 persons.

The state has support infrastructure for the auto industry like an Indo-German Tool Room, two central farm machinery training and testing institutes, and an auto-testing track.


Promoting defence production
Madhya Pradesh leads in the production in the defence sector. The state has six ordnance factories 4 of which are located at Jabalpur (vehicle factory, grey iron foundry, gun carriage factory, and ordnance factory Khamaria) and 1 each at Katni and Itarsi. The factories are run by Ordnance Factories Board and manufacture a variety of products for Indian armed forces. Now, the state government, in collaboration with the centre, plans to establish military equipment industries in Madhya Pradesh. By virtue of its centralised location, Madhya Pradesh has excellent connectivity to several parts of India and is idol destination for centralise manufacturing and distribution hub.

The state government has a dedicated Defence Production Investment Promotion Policy under which defence manufacturing units intending to invest Rs 500 crores or more are incentivised. Defence and heavy engineering companies and their suppliers have been operating in the state for over 40 years. Madhya Pradesh has excellent ecosystem of defence institutes and is also coming up with world class R&D centres. Thus, skilled manpower is available in plenty in the state.

Incredible growth
As India gains the center stage of the world, Madhya Pradesh is slowly emerging as the centre of attraction for establishment of industries and investment due to the geographical location of the state, available natural resources, better law and order, skilled human resources, availability of resources and effective implementation of Ease of Doing Business. Not only Indian, but also multinational companies (from Japan, Canada, Germany, etc) are also prioritising Madhya Pradesh for setting-up their units. Considering these factors, it looks like Madhya Pradesh is all set for an incredible growth.

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