State PCS - Uttar Pradesh (UP PCS)

• 05 Aug 2025

FDI in UP Shows Significant Growth

Why in News?

Foreign Direct Investment (FDI) in Uttar Pradesh (UP) has surged significantly in recent years, with the state government reporting significant growth between 2019 and 2023. 

Key Points

• Historical Challenges: Historically, UP struggled with a poor industrial ecosystem that discouraged foreign investors. A combination of factors contributed to this unfavorable environment, including:
  • Low rankings in ease of doing business
  • Absence of a streamlined single-window clearance system
  • Insufficient basic infrastructure
  • Unclear industrial policies
  • Unstable law and order conditions
• Shift in FDI Trends: From 2000 to 2017, Uttar Pradesh's FDI was limited to only Rs 3,000 crore, but it has surged in recent years.
  • Uttar Pradesh is now the 11th most attractive state for FDI, with a total inflow of $1.7 billion from October 2019 to September 2024.
  • The state ranks first in India for the export of consumer electronics, hosting 196 Electronics System Design and Manufacturing (ESDM) companies currently operating within its borders.
• Key Policy Reforms: 
  • The UP Investors Summit 2018 set the stage for the state’s investment-friendly initiatives. 
    • The summit attracted investment proposals worth Rs 4.28 lakh crore. 
    • Building on this success, the Global Investors Summit (GIS) in 2023 drew Rs 33.50 lakh crore in investment proposals.
  • Uttar Pradesh Foreign Direct Investment (FDI) Fortune Global 500 & Fortune India 500 Companies' Investment Promotion Policy-2023
  • Uttar Pradesh Industrial Investment and Employment Promotion Policy 2022
  • Uttar Pradesh Green Hydrogen Policy 2024
  • Uttar Pradesh Global Capability Centres Policy 2024
• Project Implementation: The UP government introduced the concept of Groundbreaking Ceremonies (GBCs). 
  • These events serve as a platform for launching large-scale investment projects statewide, with over 16,000 projects initiated across the first four GBCs, more than 8,000 of which are already operational.
    • For the upcoming GBC-5, the state government is targeting the grounding of projects worth Rs 5 lakh crore, with the potential to scale up to Rs 10 lakh crore by the event's date. 
    • The bulk of the investment has flowed into the manufacturing, services, and infrastructure sectors, with the manufacturing sector receiving the largest share at 62.25% of the total investment.