UPDIC Attracts Rs 25,000 Crore in Investments, Set to Drive Real Estate Growth: 360 Realtors Report

Lucknow / September 17, 2024: India’s leading real estate advisory, 360 Realtors, has released a white paper on the UP Defense Industrial Corridor (UPDIC). Announced in 2019, the project has so far witnessed over 150 MOUs for sectors including missiles, arms & ammunition, aerospace, satellite hardware, military apparel, radars, and navigation systems. These projects have attracted investments totaling around Rs 25,000 crore (over USD 3 billion), a significant rise from the Rs 1,250 crore (USD 218 million) invested in 2021, a statement from 360 Realtors said. 

According to the report, India is one of the fourth biggest military markets in the world, comprising around 3.6% of the global spend, only behind the USA, China, and Russia. India’s Military spend has reached USD 87 billion in 2023, growing steadily at a CAGR of 5.1% over the past 5 years. The South Asian economy’s growing geopolitical influence necessitates a larger defense budget. However, the Indian defense sector is highly import- reliant, which the government wants to reduce by developing indigenous capabilities.

“As a part of its strategy to lower import dependence, India has developed the Defense Corridor in the state of UP. It is the second dedicated defense corridor alongside the one in Tamil Nadu (TN). These corridors will create ecosystems to design, engineer, and produce defense equipment & hardware. There is already a well-developed network of Ordnance Factories, HAL, military establishments, testing ranges, etc. which further makes the region conducive for defense enterprises to take off and thrive,” Quoted, Ankit Kansal, MD, 360 Realtors.

The UP-Defense corridor is backed by a world class infrastructure in the form of extensive highways, roadways, airports, etc. It is located in close proximity to the WDFC, which can seamlessly connect the manufacturers to other parts of India. In fact, around 57% of the WDFC either passes through UPDIC or is in close proximity. Likewise, it is also located strategically with the DMIC (Delhi Mumbai Industrial Corridor), the statement added. 

There are numerous incentives & impetus for manufacturers planning to set up in UPDIC. Businesses can avail 7% capital subsidy. Likewise, 50% of logistics cost for raw materials (30% for finished goods) is available. Provision for 100% stamp duty waiver is there alongside 25% discounts in land prices.

Various big enterprises have started their operations at UPDIC. Adani has set-up a factory at Kanpur Node to produce short range missiles, ammunitions, etc. In the city of Kanpur, Genser aerospace is also building a factory to produce aircrafts with an intended yearly capacity of around 1200 units. Korwa-based Ordinance Factory has inked a JV with Russia based Rostec State Private Ltd. to produce Kalashnikov AK 203 assault rifles. Already the first batch of 5000 units has been produced. Work is going at a full pace at the Brahmos Missile facility at Outer Ring Road (ORR) at Lucknow. The India-Russia JV will start operating from 2026 with an annual production capacity of around 100 units. Tata will prepare a 500 acre Common Facility Centre in the region.

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“The mega project will unlock new real estate opportunities across the state of UP. As mega units and anchor units are set, the demand for warehousing, fulfilment centres, distribution centres, industrial parks, office buildings are steadily growing. Similarly, the corridor is a thriving ground for MSMEs, start-ups, etc, which is also feeding into demand for office spaces, co-working spaces, etc. With growth momentum setting in, the demand for retail, mass housing, healthcare, schools, and common infrastructure will also pick up,” added Kansal.