Daybreak - Why Uttar Pradesh's industrial success stops at Noida

Episode Date: December 17, 2025

Uttar Pradesh now makes more than half the smartphones produced in India. Big electronics companies have set up factories in and around Noida. A place once known for small industries is suddenly part of a global supply chain.In this episode, we look at how that happened. What changed after the pandemic. Why policy, infrastructure and geography mattered. And why almost all this growth is packed into a small belt near Delhi.Tune in.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too? It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production.

Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get alert, as soon as we release our first studio recording, episode, please follow intermission on Spotify and Apple Podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. It's lunchtime and we are outside Gamma Shopping Complex in Great Anoider. The queue starts early.

It snakes past these stores, the burger joints and the doors of fast food chains that barely have time to shut before the next car. customer walks in. Auto rickshas blared their horns non-stop. Students spill out of nearby colleges and factory workers streamed in front of the Surajpur EcoTech Industrial Belt, hungry and short on time. Inside a Domino's Pizza outlet, a staffer darts across the floor. He's already sweating. He tells my colleague the Ken reporter Priel Mahata, during lunchtime we don't even get a minute to breathe. but just five years ago, this place used to be empty. And that is where our story starts today.

What's changed in this place is not just footfall. It is the kind of work that people are doing. Factory work mostly. Electronics manufacturing, assembly lines that run in shifts and release hundreds of workers at the same time. Uttar Pradesh was not expected to be a part of the story. For decades, the state has been known for small-scale industry, poor infrastructure, unreliable power, and an uneasy investment climate.

It was never seen as a serious contender in high-value manufacturing. And yet, today, nearly 200 electronic companies operate in the state. More than half of the smartphones that are made in India come from UP. Samsung, Vivo, Dixon. When global supply chains were disrupted during the pandemic, companies began to look beyond China. We know this. India moved quickly, and Uttar Pradesh became a part of that move. Government incentives followed, industrial corridors took shape, plug-in-play land parcels appeared along the Yamuna Expressway.

An international airport in Noida is finally expected to be opened by mid-December this year after years of delay. So, on paper, it looks like quite the turnaround for the state. But here's the thing. Nearly all of this growth is packed in. into one narrow belt, greater noida, the Yamuna Expressway corridor, and Noida. Basically, a tiny slice of one of India's largest states. So here's the question that we're asking today. Is Uttar Pradesh building a manufacturing economy of its own? Or is this boom just happening because it's right next to Delhi?

Welcome to Daybreak, a business podcast from the Ken. I'm a host Nagda Sharma and I don't chase the new cycle. Instead, every day of the week, my colleague Rachel Variety, Gies and I will come to you with one business story that is worth understanding and worth your time. Today is Thursday the 18th of December. It was a regular Tuesday when my colleague Priel visited Lava International's smartphone plant in sector 63 Noida. Workers in blue aprons stood at the assembly lines. Each station had a paper clip to the top laying out the instructions step by step.

Movements were precise, rehearsed and quiet. Every line here produces nearly. 4,000 phones every 12 hours. Factories like this one helped Uttar Pradesh climb to India's business rankings, from number 12 in 2018 to number two the next year. By 2022, the state was labeled a top achiever under the business reform action plan. And the timing of all of this mattered. As global companies searched for alternatives to China,

India launched a production-linked incentive scheme or PLI scheme. and nearly 40,000 crore rupees was allocated. Companies were offered incentives of 4 to 6% on incremental production. Uttar Pradesh was ready. The state already had an electronics manufacturing policy in place since 2017. In 2020, it added more incentives. Capital subsidies, interest subsidies, electricity duty waivers, full stamp duty exemptions for large investors.

Land became easier to work. access, especially under the Yamuna Expressway Industrial Development Authority through faster allotments and plug-in-play parcels. U.P. also secured two electronic manufacturing clusters, one in Greater Noida and another near the Yamuna Expressway. A third is expected soon in eastern Uttar Pradesh. Now, one of the reasons why this happened is because of policy continuity. Yogi Adityyanat became the first chief minister in two decades to serve consecutive terms. and that stability allowed reforms to stick. A single window clearance system was created.

By September 2021, it had cleared more than 300,000 applications. Approval times dropped from four months to three weeks, faster than states like Tamil Nad, Maharashtra or Gujarat. Geography played its part too. The 165-kilometer-long Yamuna Expressway already existed. Noida was already an IT hub. Urban infrastructure was already in place. Talent could be housed, connectivity was strong, but there was a catch.

Most manufacturers did not come because Uttar Pradesh suddenly transformed on a massive scale. They came because Greater Noida sits right next to Delhi. Strip away this part of Western UP and the picture changes quite fast. Movese and this shift away from agriculture is barely visible. Industrial transformation does not follow. Infrastructure thins out. Even companies already operating in Noida hesitate to move deeper into the state.

For example, lava has manufactured phones in Noida for a decade. But expansion into interior Uttar Pradesh feels risky. Engineers and managers want livable cities, good schools, reliable infrastructure. Those basics, executives told my colleague, are still uncertain beyond the NCR belt. The imbalance shows up in numbers as well. Nearly half of the state's 22-lac-crow rupees gross state GDP in FY 2020-3, for example, came from Western UP only.

The eastern region contributed about one-third. So growth for now is concentrated, narrow and uneven in the state. More on this in the next segment. Stay tuned. Large-scale manufacturing needs fundamentals. Good roads, reliable power, skilled workers, stable law and order. And for decades, Uttar Pradesh has struggled on all four aspects. The state's industrial base was dominated by small-scale units. Leather, textiles, agricultural processing, logistics were unreliable.

Even today, highway and bridges collapsing are not uncommon, including new infrastructure. Electricity was another challenge. UPS's power distribution companies have long reported high losses. For years, aggregate technical and commercial losses stayed above 20%. Three years ago, they crossed 30%. States like Tamil Nadu and Karnataka stayed close to 11 to 13%. And this places UP alongside power-staffed states like Bihar and Jharkand. Power supply has improved in pockets like Noida and Noida-S-E-Z,

but statewide reliability remains uneven. In June, the government announced new reforms aimed at uninterrupted supply. But it is human capital that is the weakest link. UP has the second lowest per capita income in India after Bihar. Literacy rates are among the lowest in the country. And most importantly and worryingly, less than 6% of women participate in the workforce in Uttar. And that is a big problem for electronics manufacturing, which depends heavily on women for precision work. Tamil Nadu alone accounts for more than 40% of women employed in India's manufacturing

sector. UP has more than 3,200 industrial training institutes, but many suffer from outdated curricula and weak industry ties. Placement rates are low and the skill gap remains wide. Companies feel it on the shop floor. Lava, for example, recruits graduates from ITIs across UP, Bihar and Odisha. But training often misses industry needs. The curriculum is not current and practical exposure falls short. The state has announced plans to invest more than 8,000 crore rupees in workforce training. But it still trails states like Kamal Nadu and Karnataka, which have spent decades building

engineering clusters, R&D parks and university partnerships. And then there is the issue of law and order. Uttar Pradesh, as most of us know, has historically recorded high crime rates. That has hurt foreign investment. In FY 2025, the state received less than 1% of India's total FDI inflows, about 3,700 crore rupees only. Tamil Nad received eight times that. Karnataka, 15 times that.

Exports also tell a similar story. U.P. accounted for 15%, while Tamil Nad and Karnataka together crossed half. On the ground, this train is visible. Meanwhile, back in Surajpur EcoTech, lunch hour has ended. Workers are heading back to factories. Many of them are migrants from eastern UP and Bihar. Their wages are low and work conditions fragile. My colleague, Priel, spoke to one.

of them. Sukesh Kumar, who is 54 years old, lives in worker housing near Ecotech 3. His son earns 10,000 to 11,000 rupees a month at an electronics component unit. His salary has not increased in three years despite a promotion. Women earn even less. Rajjo, who is a former factory worker, quit due to poor conditions. She now runs a small eatery hoping that the lunch rush keeps her afloat. Electronics is called a sunrise industry, but for many families, tomorrow feels uncertain. Kumar's grandchildren do not attend school, rent and food leave nothing left for education. But there are some signs of improvement. At larger plants like lavas, workers are trained.

Safety protocols do exist and employees are on payrolls. Attrition is lower at organized units like Samsung's display module plant and salaries are also higher. Still, most manufacturers depend on Delhi's airport. U.P. is landlocked, no seaports, so growth hinges on roads and air connectivity. So maybe this boom will continue, even if incentives fade. But for Uttar Pradesh to actually sustain it, the state has to look inward and slowly step out of Delhi's shadow. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of a subscriber-only offerings

and a full subscription offers daily, long-form feature stories, newsletters and a whole bunch of premium podcasts. To subscribe, head to the ken.com and click on the red subscribe button on the top of the website. Today's episode was hosted and produced by my colleague, Snitha Sharma, and edited by Rajiv CN.