Uttar Pradesh’s new Aerospace and Defence Policy 2024 aims to attract Rs 50,000 crore in investments, creating 1 lakh jobs. Approved by the Yogi Adityanath-led cabinet, it focuses on building a hi-tech manufacturing ecosystem within the UP Defence Industrial Corridor, fostering innovation, and promoting self-reliance in India’s defence sector.
Uttar Pradesh Unveils Ambitious Aerospace and Defence Policy
In a significant move to bolster India’s defence capabilities, the Uttar Pradesh government, under Chief Minister Yogi Adityanath, approved the Aerospace and Defence Unit and Employment Promotion Policy 2024 on January 22, 2025, during a cabinet meeting in Prayagraj. The policy, designed to position Uttar Pradesh as a leading hub for aerospace and defence manufacturing, targets Rs 50,000 crore in investments over the next five years and aims to generate direct employment for 1 lakh youth across the state.
The policy focuses on strengthening the aerospace and defence (A&D) sector by creating a robust, hi-tech, and efficient manufacturing ecosystem within the Uttar Pradesh Defence Industrial Corridor (UPDIC), spanning cities like Lucknow, Kanpur, Jhansi, and Aligarh. It aligns with the Ministry of Defence’s goal 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.
To attract global and domestic investors, the policy offers a range of incentives, including front-end subsidies for A&D units, up to 25% land subsidies for anchor and mega-anchor units, 100% stamp duty exemptions, and capital subsidies. Special provisions for women entrepreneurs, such as exemptions on transportation charges, aim to encourage their participation in the sector. The state also plans to establish A&D-based common facility centres to enhance the skills and capacities of startups and Micro, Small, and Medium Enterprises (MSMEs) within the UPDIC.
A key feature of the policy is its emphasis on innovation and self-reliance. It encourages the establishment of artificial intelligence (AI) and software development centres tailored for the A&D sector, alongside research and development hubs to drive technological advancements. The policy also seeks to attract major A&D manufacturing projects and Defence Public Sector Undertakings (DPSUs), positioning Uttar Pradesh as a pivotal contributor to India’s defence and aerospace landscape.
The cabinet also approved a new Foreign Direct Investment (FDI) policy, offering up to 80% land subsidies to foreign firms investing in the state, further boosting industrial growth. For instance, a subsidy of Rs 106.51 crore was cleared for land allotted to Ashok Leyland Ltd., which plans to set up a facility producing 2,500 buses annually, demonstrating the state’s commitment to attracting large-scale investments.
The UPDIC, one of two defence industrial corridors in India alongside Tamil Nadu, is strategically positioned to leverage Uttar Pradesh’s existing infrastructure, including seven ordnance factories, four Hindustan Aeronautics Limited (HAL) units, and two small arms/field gun factories. The policy also includes plans for an Unmanned Aerial Vehicle (UAV) campus and an integrated testing facility for Unmanned Aerial Systems (UAS) near Kanpur, catering to the growing demand for drones in military, commercial, and recreational sectors.
Infrastructure and Industrial Development Principal Secretary Alok Kumar highlighted that the policy aims to create a world-class A&D manufacturing ecosystem by fostering global collaborations and promoting indigenous capabilities. The state’s focus on export-oriented manufacturing and a robust supply chain for MSMEs is expected to enhance Uttar Pradesh’s role in India’s vision of self-reliance in defence.
The policy’s implementation is seen as a strategic step to capitalize on the global expansion of commercial aviation, military fleets, and the rising demand for Maintenance, Repair, and Overhaul (MRO) services, where India’s cost advantage provides significant investment opportunities. By integrating advanced technologies like AI and fostering innovation, Uttar Pradesh aims to not only meet domestic defence needs but also emerge as a global player in the A&D sector.
Disclaimer: This article is based on recent reports and official statements from the Uttar Pradesh government and the Ministry of Defence, sourced from reputable news outlets such as India Today, Business Standard, The Times of India, and The Economic Times. The information reflects the latest available data as of September 2, 2025, and is intended for informational purposes only. Readers are advised to verify details through official government sources for investment or policy-related decisions.