The state government says companies with a business unit here can serve most of India, and capture a huge segment of the population in the adjoining states. The state has numerous connectivity options — extensive expressways, railways and five airports — providing easy access to markets throughout the country. It also boasts of six inland container depots — at Malanpur (Gwalior), Mandideep (Bhopal), Pawarkheda (Itarsi), Pithampur, Tihi and Dhannad (Indore). Madhya Pradesh has competitive power charges, economical land rates, a 5% interest subsidy for 7 years on term loans for plant and machinery.
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The state’s industrial landscape is quite varied. Key sectors with a significant presence include textiles, agriculture-based industries, engineering, auto and pharmaceuticals, among others. Over the past few years, these industries and the downstream sectors have witnessed significant growth.
Saurabh Singh Mehta, Executive Director, based where Kirti Industries, is of the view that the centrally located state has ample space for industrial expansion and the development of specialised industrial zones. “Madhya Pradesh can serve as a pivotal location for businesses, facilitating efficient distribution and connectivity across the country. The government needs to adopt a cluster-based approach to foster industries in various areas such as building products, industrial goods, heavy equipment, and related services. Currently, we rely on neighbouring states for such services and products, and it’s crucial to bridge this gap, especially at the MSME level. A big opportunity is where national roads are being laid; industrial clusters can be developed alongside that,” says Mehta, whose industrial group is active in manufacturing and food processing domains.
Notably, in the 2023 Ease of Doing Business rankings released by the Department for Promotion of Industry and Internal Trade (DPIIT), Madhya Pradesh ranked fourth in India. The state was preceded by Andhra Pradesh, Uttar Pradesh, and Telangana, with Andhra Pradesh topping the rankings.Madhya Pradesh ranked fourth in the 2023 Ease of Doing Business rankings released by the Department for Promotion of Industry and Internal Trade (DPIIT). The state was preceded by Andhra Pradesh, Uttar Pradesh, and Telangana.Mehta says some pockets in MP such as Indore have evolved into “appealing cities for professionals and high-calibre talent”. The state is power surplus and has a readily available labour force.
He says providing additional fiscal incentives can attract core industries to the state. Another thrust area that Mehta wants the government to look at is investing in creating a vibrant and competitive industrial atmosphere. This, in his view, can be done by focusing on skill development and training programmes to nurture a skilled workforce. “We have seen how a work culture has helped Indore remain the cleanest city for 7 consecutive years. Such a dedicated focus needs to be replicated across industries,” he adds.
Agriculture: a growth driver
Madhya Pradesh’s economy depends on agriculture; around 72% of the population lives in rural areas. According to the Department of Industrial Policy and Investment Promotion, the state has always been “one of the food baskets” of India.
MP ranks first in the country in the production of soybean, gram, urad, tur, masoor and linseed; second in the production of maize, sesame, ramtil, moong; third in the production of wheat, sorghum, and barley; fifth in millets and potatoes. This provides an enabling ecosystem for industries like food processing. Giants such as ITC, Cargill India and Britannia have large manufacturing plants and warehouses throughout the state. MP also boasts of the largest area under organic cultivation in the country, at 27% of India’s land under organic cultivation. The state government says MP contributes 43% of India’s and 24% of the world’s organic cotton production.
Besides several things going right for the state, there are pain points too, that need policymakers’ attention.
Proprietor of Indore-based Shri Om Foods Keshav Das says the state’s agricultural output is highly dependent on rainfall. “Insufficient or untimely rains often lead to poor crop yields and this affects our production too,” he says, adding that erratic weather patterns, such as unseasonal rains, droughts, and floods, further exacerbate the challenges faced by farmers, leading to crop damage and yield losses.
Farmers and agri suppliers have to deal with high input costs, including seeds, fertilisers, pesticides and machinery. “The lack of adequate infrastructure support, such as irrigation facilities and storage facilities, hampers our ability to maximise productivity and access markets effectively,” he adds.
Echoing similar views, Mehta of Kirti Industries says MP is a leading producer of agri commodities but the food processing industry loses huge value and quantity due to mismatched supply-demand and lack of infrastructure. He stresses the government should invest in post-harvest and processing infrastructure to minimise wastage and enhance the efficiency of the sector.
Textiles: Weaving is a success, yet bottlenecks need to be addressed
Textile and handloom industries are also key strengths of Madhya Pradesh. These sectors are among the oldest and most established in the state.
MP is known for its cotton, silk and woollen textiles. Industry officials tell ET Digital that the availability of skilled labour and traditional designs in MP are its strengths. Major textile hubs are at Indore, Bhopal, Ujjain, Dewas, Bhopal, Sehore, Raisen Chhindwara, Burhanpur, Dhar, Khargone, Jabalpur, Khandwa and Gwalior.
The readymade garment cluster at Indore comprises over 1,200 units. The Indore SEZ has a dedicated facility for apparel design, too. This thriving sector has a robust infrastructure of 60 large textile mills, over 4,000 looms, and 2.5 million spindles.
Major players such as Raymond, Trident Group and Welspun anchor MP’s textile ecosystem. There is also a robust network of small and medium enterprises (SMEs), making this sector a big employment generator. More technology infusion and better supply chain management can help the local industry overcome challenges in modernisation and competition from global markets.
SIDBI, in association with The Economic Times, is starting a series of events nationwide that will bring together micro, small & medium enterprises (MSMEs), policymakers and ecosystem enablers. The first event will start from Indore on January 9th, followed by events in cities such as Bhubaneswar, Ludhiana, Aurangabad, Rajkot and Belagavi.
To register for the Indore conclave, click here.
