Uttar Pradesh’s Aerospace and Defence Policy 2024 aims to attract Rs 50,000 crore in investments, creating 1 lakh jobs. Approved by the state cabinet, it focuses on building a hi-tech manufacturing ecosystem within the UP Defence Industrial Corridor, promoting startups, innovation, and self-reliance in India’s A&D sector while offering subsidies and incentives.
Uttar Pradesh Unveils Ambitious Aerospace and Defence Policy for Job Creation
The Uttar Pradesh government, under Chief Minister Yogi Adityanath, has rolled out the Aerospace and Defence Unit and Employment Promotion Policy 2024, a transformative initiative designed to position the state as a leading hub for aerospace and defence (A&D) manufacturing in India. Approved during a cabinet meeting in Prayagraj on January 22, 2025, the policy sets a target of attracting Rs 50,000 crore in investments over the next five years, with the potential to generate direct employment for 1 lakh youth across the state.
The policy focuses on creating a robust, hi-tech, and efficient A&D manufacturing ecosystem within the Uttar Pradesh Defence Industrial Corridor (UPDIC), which spans six nodes: Aligarh, Agra, Lucknow, Kanpur, Jhansi, and Chitrakoot. These nodes are strategically chosen for their proximity to expressways and highways, ensuring seamless connectivity for the transportation of goods. The initiative aligns with India’s broader vision of self-reliance under the ‘Make in India’ and ‘Atmanirbhar Bharat’ campaigns, aiming to reduce dependency on imports while boosting indigenous production.
To attract investments, the policy offers a range of incentives, including front-end subsidies, land subsidies, stamp duty exemptions, and capital subsidies. Notably, a 25% land subsidy is provided for anchor and mega anchor units, with a 100% stamp duty exemption. Units in western and central UP will receive a 25% capital subsidy, while those in Bundelkhand and Purvanchal will get 35%. Special provisions for women entrepreneurs and exemptions on transportation charges further enhance the policy’s appeal.
The UPDIC is poised to become a cornerstone of India’s defence manufacturing landscape, with plans to establish A&D-based common facility centres to enhance the skills and capacities of startups and Micro, Small, and Medium Enterprises (MSMEs). These centres will foster innovation and entrepreneurship, encouraging the development of state-of-the-art facilities. The policy also promotes the establishment of artificial intelligence and software development centres within the A&D sector, aligning with global technological trends.
The Ministry of Defence has set ambitious targets to double India’s A&D production to $25 billion and exports to $5 billion by 2025-26, with the sector expected to contribute 25% to the nation’s GDP by 2047. Uttar Pradesh, alongside Tamil Nadu, hosts one of India’s two defence industrial corridors, positioning the state as a key player in achieving these national goals. The policy’s emphasis on attracting large-scale A&D manufacturing projects and Defence Public Sector Undertakings (DPSUs) underscores its strategic importance.
Recent developments highlight the policy’s early progress. As of August 2025, the UPDIC has secured 177 Memorandums of Understanding (MoUs), with 61 units allotted land and nine already operational. An additional 15 units are expected to become functional by the end of FY 2026, signaling strong investor interest. The Uttar Pradesh Expressways Industrial Development Authority (UPEIDA), the nodal agency for implementation, has issued a Standard Operating Procedure (SOP) to streamline approvals and ensure transparency.
The policy also complements other state initiatives, such as the new Foreign Direct Investment (FDI) policy approved in the same cabinet meeting, offering up to 80% land subsidies for foreign firms. For instance, a Rs 106.51 crore subsidy was cleared for Ashok Leyland Ltd’s Rs 186 crore facility, which will produce 2,500 buses annually, demonstrating the state’s commitment to fostering industrial growth.
By promoting research, innovation, and global collaboration, the policy aims to enhance national security while driving economic prosperity. It is expected to create a ripple effect, generating indirect employment and stimulating local economies across the state’s defence nodes. With its focus on equipping youth with advanced skills, the initiative is set to transform Uttar Pradesh into a powerhouse of A&D manufacturing.
Disclaimer: This article is based on recent news reports and official statements from government sources, including Invest UP and media outlets like The Times of India, India Today, and Hindustan Times. Information is accurate as of August 6, 2025, and subject to change. Readers are advised to verify details through official channels for investment or policy-related decisions.