Madhya Pradesh Facilitation Centre for NRI's: Government of Madhya Pradesh:M.P. State Industrial Development Corporation Limited, Bhopal



STATE PROFILE : Advantage Madhya Pradesh

Investment climate in M.P.

The new Madhya Pradesh government is committed to “Growth with Employment”. To facilitate “Growth with Employment” the M.P. Govt. has taken bold policy initiatives & has drawn out strategies to ensure desired outcomes from these policy frame works.

A brief summary of Industrial development and Investment Scenario in Madhya Pradesh is given below:


Earlier days the investments used to follow trade but in the present global scenario trade is followed by pouring investments in opportunity areas. All recent reports from FICCI, World Bank, Mckinsey & others have confirmed that investments in Infrastructure, Manufacturing, Agriculture & Service sectors fuel growth. These reports also suggest that the G.D.P. growth of India can be enhanced by at least 2-3% points if the procedural bureaucratic delays can be avoided.

Taking cue from these two focal points the new  Madhya Pradesh Government has put forward its vision, & strategies to meet the national objective of attaining 8-10% annual GDP growth on a sustained basis. The Madhya Pradesh Government has now come up with Industrial Promotion Policy, 2004 (being restructured again based on feedbacks from Investors).

It is advantageous to set up units in Madhya Pradesh because the land and knowledge workers are available at a very low cost. It is an industrially peaceful state with fewer law & order problems. As per the CMIE report September 2009, Investment proposals worth about Rs. 3, 19,418 crore ($67b approx) are in different stages of consideration in Madhya Pradesh.

Never before has the investment climate been so upbeat.

To a great extent, the Industrial Policy 2004 is responsible for generating an atmosphere of confidence in industry. This is a new Madhya Pradesh, which truly means "Business". Whether in the field of infrastructure or manufacturing or the service sector, fresh investments are pouring into Madhya Pradesh.

On it's part, the Madhya Pradesh Government is making every possible endeavor to market the State, invite investments, and offer incentives and conducive environment to facilitate fresh investments.


  A promotional assistance equivalent to 50-75% of the Commercial Tax & Central Sales Tax deposited in the first year shall be given in the second year. This promotional assistance shall be given for 3-10 years depending upon the category of the district & the amount of assistance shall not be more than the total investment of the installed unit.

v   Special package for mega project.

v   Concession/Exemption of stamp duty.

v   Exemption from ”Electricity Duty” for first 5 years on Captive power generation.

v   Partial reimbursement of expenditure for Quality Certification.

v   Capital Investment Subsidy, Exemption from Entry Tax for 5 years.

v   Subsidy to Industry under thrust sector, Exemption from Mandi Tax for Agro Processing Industry. 


Madhya Pradesh has traditionally been one of the leading states in the field of textiles. Indore was the city where the first mega mills: Hukumchand Mills, Raj Kumar Mills, Hope Textiles etc. were established. Once again the textile sector in Madhya Pradesh is throbbing with activities.

Mahavir Spinning Mills of Ludhiana (SP Oswal Group) has set up an integrated textile mill at a total investment of almost Rs. 850 crore, which is now being revised to  Rs. 1900 crore (in two phases) by attracting other cluster based industries like garment & knitting etc. Trident group of Barnala, Punjab has set up a Mega Textile Project in Budhini with investment of Rs 350 Crore. An Apparel Park for integrated textile units is being built up within the SEZ in Indore. This will have State of the Art Common Effluent Treatment Facilities (CETP). Separately a ready-made garment complex has also been built in Pardesipura in Indore.

Auto Sector:

Auto manufacturing & Auto components units have a sizable presence in Madhya Pradesh. Companies like Bajaj Tempo, Eicher & Hindustan Motors have their units at Pithampur near Indore. It is projected that fresh investments of almost Rs. 1000 crore from the Auto and Auto Components Industries shall come in soon.

The Government of India, through the Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce & Industry, has formulated an Industrial Infrastructure Upgradation Scheme (IIUS), targeted at improving the global competitiveness of functional clusters in the country through the provision of grant funding for the creation of quality infrastructure.

The automotive cluster in Pithampur near Indore is one of the identified clusters under the IIUS. Under the IIUS, the Government of India will provide a grant of up to 75% of the total cost of infrastructure creation and upgradation in the identified clusters, subject to a limit of Rs. 50 cr per cluster. The balance investment requirements would be financed by local (cluster) stakeholders, with cluster industry contribution at a minimum level of 15% of the total project cost. An Auto cluster is being developed at Pithampur to make it India's most vibrant hub for the production of Medium/Heavy Commercial vehicles for passengers/cargo. Likely turnover of OEM in Pithampur area will be Rs. 10,000 crore in the year 2009-2010, and Auto Components industry will have estimated turnover of Rs. 4,500 crore in 2005-2010.

A separate company has been set up for the development of this Auto Cluster called "Pithampur Auto Cluster Limited". This is going to be a professional company. Pithampur is one of the largest Growth Centres in Central India and a well-developed industrial town of Madhya Pradesh. Located 30 kms from the city of Indore, the Growth Centre is spread across an area of nearly 1,900 hectares. With about 122 medium and large-scale industrial units, and more than 455 small-scale industries, Pithampur has attracted cumulative investment of over Rs. 68,250 million and today provides employment to approximately 25,000 people. The automotive industry is one of the most significant constituents of the Growth Centre

A proposal for setting up an "Auto Testing Track" involving an area of more than 4000 acres of land near Pithampur is under process and the land for the same has been acquired.

Food, Agro Processing & Herbal:

Madhya Pradesh is the largest producer of oil seeds & pulses in India. 60% of country's Soybean & 40% of Gram is grown here. Madhya Pradesh is the largest producer in India of spices such as Garlic & Coriander. Internationally exportable variety of wheat & potato are grown here.

11 out of 18 Agro climatic zones in India pass through Madhya Pradesh. Rare species of medicinal plants are grown in 10000 hectares.

The knowledge pool on Agriculture & Herbal sector is very high in M.P. It could be an ideal State for investments in Agro, Herbal & Bio tech sectors, because of its biodiversity.

Legal frame work for Contract framing is operational in M.P. & is benefiting thousands of farmers.

In spite of being the 2nd leading State in the areas of fruits & vegetables in India, the food-processing sector in Madhya Pradesh is relatively un-developed. Now it is being treated as a thrust sector in the New Industrial Policy and various concessions & incentives have been provided for this sector. Investment proposals for more than Rs. 200 crore are in the offing. Many proposals for organic farming and production and herbal products have been received.

In the year 2003-2004 Government of India has sanctioned six "Agriculture Export Zones" (AEZ) for six agro products in Madhya Pradesh. This initiative would strengthen the infrastructure in Food Processing.

The M.P. villages are well connected by ITC-E chaupal model and contract farming is being done by corporate sector. Notable among them is Pepsi, which is doing contract farming in 10000 ha of land in Ujjain division for potato farming (Chip variety).



Gems & Jewellery:

Madhya Pradesh has the only running Diamond mine (at Panna) in the country.A state of art Gems & Jewellery park at Indore with an area of 18,1999 sq. meters is under construction.


M.P. is the third largest producer of cement in the country. It caters to 13% of the National demand. The state is rich in cement producing minerals & the logistical advantages of these sites reduces the overall cement manufacturing & supply chain cost, helping the cement companies to get a higher return on investment (ROI).

The state has the appropriate know how & knowledge pool to run cement plants. At present several major groups like Birla Corporation, Vikram Cement, Prism Cement, J.P. Rewa, Diamond Cements, Maihar Cement & ACC own manufacturing plants in Madhya Pradesh. Out of these units J.P. Rewa & ACC are in process of investing Rs. 1100 crore ($ 24 Million approx.) for expanding their production capacities.


Government of India has identified Govindpura, Bhopal as an Engineering Cluster destination. In the year 2002-2003 the total production of engineering goods from Govindpura was Rs. 350 crore ($ 76 Million approx), which is likely to double in next 5 years.

Due to large sum of money being invested in power sector, all the electrical Engineering industries are likely to grow at a rapid pace & locations like Bhopal & Indore can expect an investment of Rs. 450 crore ($ 100 Million approx) in next 5 years.

Potential areas:

- International Standard Tool Room.

- Up gradation of ITI (Industrial Training Institutes).

-Setting up light manufacturing units & heavy Engineering.

Information Technology:

Various facilities are available in Madhya Pradesh for starting of Call Centers and IT units. A fully integrated IT Park known as the Crystal IT Park is being built at Indore. It has 32740sq meters(3.5 lakh sq.ft.) built up space. It will be an intelligent building with all modern facilities and management systems etc. A Rs. 100.00 crore ISRO facility has started functioning at Bhopal from April, 2005 this would enable IT related industry to grow around Bhopal. At last; the stage has been set for IT growth in Madhya Pradesh, which now has 107, Engineering Colleges & one National Institute of Information Technology and Management at Gwalior.

Government of India has recently sanctioned an Institute of Information Technology & Design at Jabalpur.

Special Economic Zone (SEZ) BENEFITS:

M.P. has the first operational SEZ (at Pithampur) near Indore in the country, with several units starting their Commercial Production in December 2004. Already more than 15 units have started their preliminary project related work at the SEZ. The benefits of investing in SEZ Indore are - complete exemption from all state taxes duties, levies & liberalized labour laws; power supply on no loss-no profit basis; all the other benefits announced by Government of India for SEZ are also available; all the support facilities like offshore banking, post office & custom are available at SEZ with an added facility of a "Dry Port".

On similar lines, investors can build their own SEZ at Bhopal, Indore or any other place.


The state has developed an excellent infrastructure. It has 19 Industrial Development centers, 129 Industrial Areas, 6 (six) food parks, 8 integrated development centers, one stone park, one SEZ at Indore, 3 dry parks, one IT park, and one apparel park at Indore.

The Madhya Pradesh State Industrial Development Corporation & Industrial Development Corporation Indore have taken up an 80 crore project to bring water from Narmada river (from Nemawar which is 128 kms away from Dewas.) to Dewas under BOT scheme.

This project will not only solve the water problems of 460 industries located at Dewas but will facilitate further industrialisation of Dewas Industrial Belt.

Another project of Industrial hazardous waste disposal is being mooted near Indore to take care of Industrial waste generated at various places in Madhya Pradesh.

2000 Kms of road projects are already being completed under the BOT scheme in which, for the first time, private sector participation has ensured that Government spends only 50% of the capital cost of renovating the roads. Another 1100 Kms. of roads are to be completed under an Asian Development Bank Road Project. Further, another 2000 Kms. of road are planned on a BOT basis. This would take care of almost all major State Highways.


Apart from on-going projects on the river Narmada at Punasa and the Onkareshwar Project, several other projects are being flagged off. The Maheshwar Hydro Electric Project shall start its work soon. Madhya Pradesh Govt is setting up a 1000 Mega Watt Thermal Power Plant at Khandwa.

We are striving hard to make M.P. a power surplus state by the year 2011. This means that we shall have sufficient power for Agriculture use in next 2-3 years. Power reforms like bifurcation of State Electricity Board into 3 organizations has already taken place and the Electricity Regulatory Commission is in operation. Following are the major power projects coming up in the state.



Reliance Energy Ltd.

4000 MW

Essar Power Ltd.

1000 MW

BLA Power

140 MW

Malwa TPS

2*500 MW

Sanjay Gandhi Birsinghpur- Unit V

500 MW


Law, Order & Industrial Harmony:

The laws and order situation is satisfactory and on the labour front, reforms are being initiated as per new Industrial Promotion Policy 2004. It’s a matter of pride that no of man days lost is less than 1% of the total man days available during the period of last 5 years.


This is a Single Table clearance facility wherein the investor submits his project proposals for initial approvals.

Under the Single Table System - Clearance pertaining to departments of Housing & Environment, Madhya Pradesh State Electricity Board, Food & Drug Administration, Energy, Commercial Taxes, Revenue, Labour, Industry & Urban Administration are issued in a time bound manner.

The Chief Minister chairs an Apex Committee for mega projects. The committee has so far given clearances to 121 mega projects worth approx $ 13.56 billion.

The Chief Secretary chairs the Project Clearance & Implementation Board (PCIB) for speedy  clearances to project  proposals & monitoring progress. PCIB has so far  cleared projects worth approx $ 39.37 billion. 

The bottom line is that Madhya Pradesh is now making rapid strides towards socio-economic progress with an eye on globalization. The Industrial Promotion Policy – 2004-07, a friendly & committed bureaucracy (as reported in leading newspapers) with right kind of strategies & people's participation shall usher a new era of development in Madhya Pradesh. The sleeping giant, Madhya Pradesh is awakening.



Major investment proposals on the anvil

Major Proposed Mega Investments

(Manufacturing Sector)


Rs. Cr.

US $ Mn

BORL (Bina Refinery)



Hindustan Aluminium Co

(Aditya Birla Grp.)        Phase I

Phase II







ACC Cement



Satna Cement



Prism Cement



Jay Pee Rewa Cement






Bhilai J.P. Cement Ltd.



Nahar Poly Films Ltd.



Cummins Turbo Technologies



Liugong (India) Pvt. Ltd.



Regent Drugs (TEVA Pharma)







Major Proposed Mega Investments

(Infrastructure Sector)


Rs. Cr.

US $ Mn

Reliance Energy Ltd.



Essar Power Ltd.



Auto Testing Track (NATRIP)



BLA Power