Uttar Pradesh, the state with a population of more than 20 crores, has the existing capacity to become the “factory of the world”. Just like Silicon Valley emerged as the tech capital of the world and China became the global manufacturing hub in the last three decades, Uttar Pradesh can emerge as a global factory, thanks to the availability of cheap skilled and unskilled labour.
Most recently South Korean electronics major, Samsung, announced an investment of ₹ 5,000 crores in smartphone display manufacturing facility unit. The export-oriented unit (EOU) will be ready for commercial production by April 2021. “So far, the company has already invested about ₹ 1,500 crores in the greenfield plant. Once the unit is operational, India would become only the third country in the world having Samsung’s smartphone display manufacturing facility,” UP industrial development minister Satish Mahana said.
Compared to the Chinese workforce which is now old and costly, the cost of labour is very cheap in Uttar Pradesh and also, very young with a median age of 21. On the other hand, the median age of China is 38 years while the cost of labour is 10 times more than that of Uttar Pradesh. Unfortunately, the state did not have an investment-friendly government before but with the arrival of Yogi, things have been moving rapidly.
The first thing Yogi fixed was the state’s fragile policing system. The government made a good investment in law enforcement and increased the budget by double digits. With the investment in law enforcement and political backing, many encounters of the criminals were carried out and the corrupt leaders who extorted money from industrialists were put behind bars.
With the improvement in law and order, policing system, and an active government chasing companies for investment, many national and international companies are coming to the state. As per a report by Department of Industries of Uttar Pradesh, the state has received investments of ₹ 172 crores per day in the last three years.
The total realized investment in the state in the last three years is around 1,88,000 crore rupees. The state received an investment of ₹ 6,700 crores in the first half of this fiscal year, despite the pandemic induced lockdown. Companies from the United States, the United Kingdom, Germany, South Korea, Japan, France, and several domestic companies made investments in the state in the last few months.
The presence of a decisive government and pro-industry policies have accelerated the flow of investments in Uttar Pradesh in the last few years, and now it is becoming a favourite destination for the investors. The Yogi government has organized various investor summits and expos in the last few years to attract private investment. And these events have been quite successful, with the promise of investment worth ₹ 4.68 lakh crore in UP Investor summit and more than ₹ 70,000 crores in the defence expo which was organized only a few months ago.
Given the flexible labour laws and benefits like GST breaks, the state is emerging as a preferred destination for electronics manufacturing, textile and food processing industries apart from traditional sectors like IT and ITeS.
In the last few months, the state received more than ₹ 30,000 crores investment in the electronics manufacturing segment with ₹ 10 thousand crores from World Trade Center, ₹ 7,429 crores from Vivo Mobiles, ₹ 2,000 crores from Oppo Mobiles India Private Limited, ₹ 1,772 crores from Holitech India Private Limited, and ₹ 1,500 crores from Sanvoda Electronics India Private Limited. Moreover, KHY Electronics India Private Ltd. has started operating in the state by investing ₹ 358 crores and Lianchuang (LCE) has invested ₹ 281 crores in Gautam Buddha Nagar.
Uttar Pradesh has the existing capacity to replace China as the ‘factory of the world’ with a population of ₹ 22 crores and young demography. Unfortunately, the state has not had an investment-friendly government before, but under Yogi, things have been moving rapidly. The Yogi government must be applauded for transforming the state from a nightmare for industrialists to heaven for law-abiding companies. We are hopeful that these untiring efforts for the state might soon be fruitful.