Uttar Pradesh: India¡¯s emerging silicon heartland for electronics and semiconductors

Uttar Pradesh has over the years, emerged as the nerve centre of the electronics sector thanks to its business-friendly policies and stellar infrastructure. From facing an economic slowdown for multiple reasons, India¡¯s most populous state has now transformed into the go-to destination for companies across segments such as mobile and communication devices and consumer electronics. This has essentially established Uttar Pradesh as the driving force of the country¡¯s economy.

UP continues to ¡®charge¡¯ the mobile and communication devices segment

Uttar Pradesh leads the way when it comes to mobile phone manufacturing. In 2024, the state accounted for 55% of the country¡¯s mobile production. This means it leads over states such as Andhra Pradesh(~10%) and Karnataka (~1%)

Home to 14 fully functional Special Economic Zones (SEZ¡¯s) and three Electronics Manufacturing Clusters (EMCs), Uttar Pradesh is the catalyst behind the country¡¯s economic growth. EMCs ensure that companies have direct access to state-of-the-art factories and warehouses, which helps them stay ahead of the competition.

Statewise % break-up of India's mobile sector in 2024. | Credit: Indiatimes

Similarly, SEZs have proved to be a game-changer for the state and the country¡¯s economy. Companies based in these specialised areas enjoy tax holidays, which shield them from the cumbersome and unnecessary bureaucratic procedures. These initiatives have fostered a favorable investment climate, encouraging key international players to bet big on Uttar Pradesh.

In 2020, Samsung decided to invest ?4,825?crore to relocate its mobile and IT display manufacturing operations from China to Noida. Similarly, Vivo is set to invest Rs 7,000 crore in Uttar Pradesh and establish a well-equipped manufacturing plant in Greater Noida. Global giants Oppo, Haier and Lava too have a strong presence in the state, which has further proved to be a boon for the segment.

UP powers the consumer electronics segment

Uttar Pradesh has also grown by leaps and bounds in the consumer electronics (durables) segment, accounting for nearly 15% of the country¡¯s exports. This puts it ahead of states such as West Bengal (~5%) and Telangana (~2%), and

Consumer electronics firms enjoy several benefits under the Uttar Pradesh Electronics Manufacturing Policy 2020, which was amended in 2022. They include 15% capital subsidy on investments up to Rs 1,000 crore, 100% exemption on stamp duty, and up to 100% exemption on electricity duty for a period of 10 years.

Opoo has a strong presence in UP. | Credit:OPPO

These initiatives have further rejuvenated the already flourishing segment, encouraging enterprises to set up shop in Uttar Pradesh. Nearly 20 firms have expanded their operations in the state over the last five years, bringing in a total investment of ?21,642 crore. These include global leaders such as Haier (Rs 584.5 crore) and Oppo (Rs 4000 crore).

Additionally, the state¡¯s robust educational infrastructure¨C equipped with 71 universities and over 4,300 colleges¨C serves as a big asset for the consumer electronics sector by providing a highly-trained workforce.

The future looks bright

The state is set to further consolidate its standing as the the hub of the electronics sector through the UP Semiconductor Policy 2024. It aims to transform UP into a haven for enterprises through benefits such as up to 25% capital subsidy and land rebates.

Uttar Pradesh is also set to welcome the HCL¨CFoxconn OSAT Plant in Jewar by 2027. Projected to produce 36 million display driver chips/month, this game-changing initiative is likely to create over 2,000 direct jobs and generate Rs 1000 crore a year. In other words, Uttar Pradesh is on course to becoming a powerhouse in this segment in the next couple of years.

This exponential growth essentially means that UP is in prime position to further consolidate its standing as the preferred destination for enterprises hoping to thrive in the electronics sector.