State emerges as a strong economic powerhouse with robust growth in GDP, investments, and infrastructure
Lucknow, February 11, 2025 — Uttar Pradesh is on track to becoming a USD 1 trillion economy, driven by robust economic growth, improved ease of doing business, and significant investments in infrastructure, according to a report released by the PHD Chamber of Commerce and Industry (PHDCCI).
In its research report titled “Uttar Pradesh – Marching Towards USD 1 Trillion Economy,” PHDCCI highlighted the state’s impressive economic progress. Dr. Ranjeet Mehta, Secretary General and CEO of PHDCCI, emphasized during a meeting with Shri Abhishek Prakash, IAS, CEO of Invest UP, that Uttar Pradesh has strengthened its position as an economic powerhouse within India.
“The economic and business environment in Uttar Pradesh improves each day, driven by diverse industrial growth, a rich cultural heritage, and an expanding consumer market,” Dr. Mehta noted.
The Gross State Domestic Product (GSDP) of Uttar Pradesh surged from ₹16.44 lakh crore in 2020-21 to over ₹25.47 lakh crore in 2023-24. The state’s economy grew at an average rate of 9.6% between 2017-18 and 2019-20, and despite the challenges posed by the COVID-19 pandemic, it rebounded strongly with an average growth of 15.7% from 2021-22 to 2023-24.
Key Growth Drivers
The report identifies three key sectors driving Uttar Pradesh’s growth: services, agriculture, and industry. The services sector contributes 46.5% to the GSDP, with significant activity in tourism, real estate, finance, and hospitality. Agriculture, employing two-thirds of the workforce, contributes 27% to the state’s economy. Industrial activities account for 26.5% of the GSDP, with Uttar Pradesh emerging as a major manufacturing hub for electronics, textiles, automobiles, pharmaceuticals, and food processing.
The state’s strategic location, coupled with significant infrastructure investments, has enhanced its attractiveness to investors. Uttar Pradesh’s reforms in improving the Ease of Doing Business (EoDB) through regulatory simplification, single-window clearances, and digitalization have also played a pivotal role in boosting investor confidence.
Boost in FDI and Exports
Uttar Pradesh has attracted cumulative Foreign Direct Investment (FDI) inflows of USD 1.68 billion between October 2019 and June 2024, ranking 10th in India for FDI. The state has seen strong investments in IT, textiles, electric vehicles, and logistics. Its export sector, particularly in handicrafts, which account for 60% of total exports, has also shown robust growth.
MSME and Infrastructure Development
With nearly 90 lakh Micro, Small, and Medium Enterprises (MSMEs), Uttar Pradesh continues to drive manufacturing output and employment. State support through improved access to finance and innovation has enhanced MSME competitiveness.
The state has made significant improvements in logistics infrastructure, including rail, road, and waterways, which have facilitated seamless connectivity and bolstered industrial growth.
Path Forward
PHDCCI recommends continued investments in infrastructure, industry, and technology to sustain growth. Public-Private Partnerships (PPPs) will be key to further infrastructure development. Additionally, the focus on skill development, employment generation, and industrialization has led to a notable increase in per capita income, which reached ₹93,514 in 2023-24, reflecting 14% growth from the previous year.
“Uttar Pradesh is well-positioned to contribute significantly to India’s goal of becoming a developed nation by 2047,” Dr. Mehta concluded, highlighting the state’s potential in sectors like energy, agriculture, tourism, IT, and electronics manufacturing.