FDI inflows into UP surge as electronics projects gain ground, says additional chief secretary Deepak Kumar
Uttar Pradesh is rapidly transforming into a prime destination for foreign direct investment (FDI), with inflows reaching ₹5,963 crore in just the first half of FY26. This growth is attributed to strategic policy incentives targeting high-growth sectors like electronics and semiconductors.
NEW DELHI: Foreign direct investment into Uttar Pradesh rose to ₹5,963 crore ($660 million) during the April-September period of FY26 as India’s third-largest state economy aspires to become a $1 trillion economy with key policy incentives for high-growth sectors, a top official said.
“Uttar Pradesh has moved decisively from being a marginal recipient of foreign investment to a more serious and organized FDI destination," UP’s additional chief secretary and infrastructure & industrial development commissioner Deepak Kumar said in an interview to Mint. “The sharp rise in FDI in just the first half of FY26 shows growing confidence in our policy framework, land aggregation and single-window systems."
The state received ₹550 crore as FDI in the first half of FY25, minister of state for commerce and industry Jitin Prasada said in a written reply to the Rajya Sabha in February 2025.
The UP official said the FDI surge reflects a structural shift rather than a one-off spike and added that the state’s objective is to align itself with the Centre’s $100 billion FDI ambition rather than chase headline rankings alone.
“Our expectations and strategic roadmap for the coming years include a projected investment pipeline of 22 formal applications with a total investment value of ₹17,810 crore," he said. “In addition, the state is tracking a further 29 potential applicants with proposed investments amounting to ₹56,347.30 crore."
The focus is on attracting investments in high-growth sectors such as electronics and semiconductors, especially along the Noida-Greater Noida-Yamuna Expressway belt, as well as technical textiles and green hydrogen, Kumar said.
Projects showcased by the state include the ₹3,700-crore electronics manufacturing hub being developed by HCL Technologies in partnership with Foxconn in the Noida-Greater Noida-Yamuna Expressway region, which is positioned as a base for electronics and semiconductor-linked manufacturing, Kumar said.
Dedicated country desks for Japan, South Korea, Taiwan, Germany, France, Singapore and Gulf countries have been created to provide end-to-end handholding, from site selection to post-investment support.
GCCs, textiles
Global capability centres (GCCs) already operating in UP, including MetLife, InMobi and Barclays, have strengthened the state’s services pitch, while the government is tracking 83 GCC leads with an estimated investment pipeline of about ₹5,000 crore, Kumar said.
Technical textile investments, particularly by Taiwanese firms in and around Kanpur for sportswear and functional textiles, have also contributed to recent inflows, alongside logistics and manufacturing proposals linked to expressway corridors.
However, UP continues to trail the country’s traditional investment magnets such as Maharashtra and Karnataka. The state’s FDI inflows increased to ₹3,700 crore in FY25 from ₹2,762 crore in FY24.
Cumulative FDI inflows into UP from 2000 to September 2025 stood at ₹22,279 crore. In comparison, Maharashtra alone attracted ₹91,337 crore in the first half of FY26, Karnataka ₹80,997 crore, Tamil Nadu ₹30,685 crore, Delhi ₹19,843 crore and Gujarat ₹19,325 crore during the same period.
Experts said the sudden increase in FDI inflows into a state like UP is notable, given that other states developed their FDI ecosystems due to logistical advantages, including being located along the coast.
“The trend reflects growing investor confidence, improved law and order, and the state’s potential for further growth," said Abhash Kumar, a trade economist.
Foreign investment into India during April-September 2025 (FY26) rose about 20% to $50.4 billion, including equity inflows of $35.2 billion, from $42.1 billion and equity inflows of $29.8 billion in the same period a year earlier. The Centre has targeted foreign investments of $100 billion in FY26.
Critical incentives
According to Kumar, policy incentives played a critical role in converting proposals into investments. Under the Uttar Pradesh FDI Policy 2023, the state offers front-end land subsidies of 25% in Paschimanchal (western UP) and Madhyanchal (central UP) and 20% in Bundelkhand (southern UP) and Purvanchal (eastern UP), with higher reimbursement by the state government in the latter regions.
Capital subsidies of up to ₹100 crore are available in staggered instalments, stamp duty and registration charges are fully exempted or reimbursed, electricity duty is waived for five years, and state GST refunds are provided on eligible investments. These are supplemented by Nivesh Mitra 3.0, which the government says will reduce documentation by about 50% and approval timelines by about 30%.
On infrastructure, the top official said the state’s push goes beyond Noida. A 100,000-acre industrial land bank has been aggregated across regions, while projects such as the Jewar (Noida International) Airport and its proposed aerotropolis, 27 manufacturing and logistics clusters along expressways, the Bundelkhand Industrial Development Authority covering over 56,000 acres, and inland waterway connectivity on National Waterway-1 are intended to support investors at scale.
“Our focus is on sustained conversion — getting projects on the ground, creating capacity and jobs, and building confidence for repeat investments. That is how Uttar Pradesh will close the gap over time," he said.
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