Madhya Pradesh: The story of incredible growth

  • Industry News
  • Sep 30,22
While Madhya Pradesh is home to all types of industries, defence and auto industries are expected to play major in propelling the state economy in the future.
Madhya Pradesh: The story of incredible growth

Madhya Pradesh is considered to the heart of incredible India. The state has the location advantage as it is geographically located at the centre of India and all four corners of the country are accessible in 24 hours by road - both East-West and North-South corridors crosses across the state. There are six Inland Container Depots (ICDs) at Malanpur (Gwalior), Mandideep (Bhopal), Pawarkheda (Itarsi), Pithampur, Tihi, and Dhannad (Indore).

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. Campanies based on mineral substances and readymade garments also play a significant role in industrial growth of state.

"Madhya Pradesh 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% of India's total cement production," says Pramod Dafaria, President, Association of Industries Madhya Pradesh.

At a recently held review meeting for industrial policy and investment promotion, the state government discussed action plan for making MP a major edible oil producer, developing new IT parks in Bhopal and Indore and assessing the potential of industrial development of areas along Chambal Expressway and Narmada Expressway to focus on export of pharmaceuticals. The possibilities of encouraging investment in labour-intensive sectors, such as food processing, textiles, engineering, electronics, apparel and hardware manufacturing were also discussed. The MP government has drawn up plans for setting up medical devices park Ujjain, IT park-3 Indore and greenfield airport in Dewas.

Taking a lead in 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.

Based on the current ecosystem, availability of land, geographical terrain, excellent connectivity with NCR and proximity to upcoming UP Defence corridor, MP is suitable for setting up of defence units. The UP Defence Corridor crosses from Agra, Jhansi which is just around 100 km from Gwalior and Datia district is just 30 km from Jhansi.

Madhya Pradesh is the focal point of following mega infrastructure projects; thus, offering world class connectivity for transportation:

  • Atal Pragati Path (Chambal Expressway): Connecting Sheopur, Morena and Bhind district
  • Narmada Expressway: Connecting Eastern MP with Western MP covering 13 districts
  • Delhi-Nagpur Expressway approved by NICDC has significant portion of the corridor passing through MP

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.

The state offers immense opportunities in defence and aerospace equipment manufacturing related to:

  • Automobile manufacturing: Indore hub of auto manufacturing having 100+ large units
  • Narmada Expressway: Connecting Eastern MP with Western MP covering 13 districts
  • Textile: Technical textiles can be utilised for manufacturing of bullet proofs jackets, armours,
  • Narmada Expressway: Connecting Eastern MP with Western MP covering 13 districts
  • etc. The state is fifth largest producer of cotton in the country
  • Narmada Expressway: Connecting Eastern MP with Western MP covering 13 districts
  • Heavy engineering: Presence of BHEL, vehicle factory and its ancillaries provide excellent ecosystem for defence electronics and heavy engineering like manufacturing of military motor
  • vehicles including Mine Protected Vehicles
  • IT & Telecommunications: Talent pool, emerging infrastructure and presence of large companies
  • Arms and Ammunition like ball powder propellant, composite propellants and cast double propellants, small arms ammunition, heavy caliber cartridge case
  • Precision manufacturing, forging, casting and sheet metal work
  • Opportunity for MRO: The airports of Bhopal, Jabalpur, Khajuraho, Shivpuri have adequate availability of land adjacent to making these airstrips suitable for aircraft manufacturing industries, MRO operations & UAV testing centres

Auto industry in the driver’s seat
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 state offers infrastructure including industrial parks, Inland Container Depots, industrial corridors, and testing facilities like Central Farm Machinery Training & Testing Institute at Budhni. The state also has skill development institutes such as the Indo-German Tool Room, Symbiosis Skill University and MSME technology Centre, besides other technical training institutes.

The initiatives taken by the Madhya Pradesh government in developing the auto sector have begun to pay dividends, as the Pithampur auto cluster has been an emerging auto hub of central India. The auto cluster is spread across a total area of nearly 4,500 hectares, housing over 100 large and 2,500 MSME units. The auto cluster has an investment of Rs 97,500 crore and exports goods worth Rs 1,500 crore.

The Government of India, under NATRiP, a flagship project of the Ministry of Heavy Industries, has been establishing a series of cutting-edge testing and research centres in the country since 2015. One of the research centres is the National Automotive Testing Tracks (NATRAX), which has been established in the Pithampur auto cluster. Admittedly, it has Asia’s longest high-speed track and the fifth-largest in the world. NATRAX is spread across an area of 1200 hectares with 11.3 km of testing tracks, established with an investment of $ 200 million. The facility has 14 types of test tracks, including Vehicle Dynamics, fatigue and NVH (Noise, Vibration and Harshness) testing facilities, among many others.

With auto sales in India expected to record strong growth in 2022-23 (following the recovery from the effects of the Covid-19 pandemic), the Indian auto industry is expected to reach up to Rs 18.18 trillion ($282.8 billion) by 2026. Being centrally located, Madhya Pradesh is expected to be one of the major driving forces behind the growth of the auto industry.

Inviting global investment
The Madhya Pradesh Government will hold the seventh edition of Global Investors' Summit (GIS) in Indore from January 9-11, 2023. "I am happy to share that we are organising the MP Investors' Summit on January 10 and 11, 2023, immediately after 'Pravasi Bhartiya Divas 2023' at Indore. Madhya Pradesh, the growth centre of India, is ready to welcome industry leaders, NRIs and global investors," informed MP Chief Minister Shivraj Singh Chouhan.

After two Covid-hit years, the MP government is aiming to brighten up its investment portfolio with GIS 2023 and continue its incredible growth journey.

Policy push
To encourage investment and industrialisation, the state government introduced a number of new/amended policies like:

  • Mandi Fee Exemption is provided for food processing industry
  • Interest subsidy for textile industry: 5-7%
  • Electricity duty exemption: 5 to 10 years for HT connection by a DISCOM
  • Rebate on power tariff: Rs 1 per unit for a period of 5 years
  • Green Industrialization Assistance
  • Assistance to industrial parks: Maximum of Rs 5 crore
  • Infrastructure development assistance: 50% assistance or Rs 1 crore subject to a maximum of Rs 3 crore for developing power, water & road infrastructure, on private land or undeveloped government land.

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