Chhattisgarh, once synonymous with Maoist terrorism and anti-Naxal operations, is scripting a remarkable turnaround, emerging as a hub for industrial growth and innovation. A transformative industrial development policy, effective since November 1, 2024, has catalysed investments worth Rs 4.5 lakh crore, positioning the state as a burgeoning powerhouse in manufacturing, technology, and services. This seismic shift, driven by strategic reforms and a focus on ease of doing business, is redefining Chhattisgarh’s economic landscape, even as security forces intensify efforts to curb Naxalism.
A new industrial dawn
Chhattisgarh’s industrial resurgence was marked by two landmark developments. In early May, Chief Minister Vishnu Deo Sai laid the foundation for India’s first Artificial Intelligence (AI)-based data centre park in Nava Raipur, a greenfield city poised to become a technology hub.
This followed the April inauguration of the state’s first Gallium Nitride (GaN)-based semiconductor fabrication unit, a Rs 1,143 crore project by Chennai-based Polymatech, with plans for an additional Rs 10,000 crore investment. These projects underscore Chhattisgarh’s ambition to diversify beyond its traditional strengths in coal, iron, and bauxite.
The state’s new Industrial Development Policy, a cornerstone of the Bharatiya Janata Party’s (BJP) 2023 election manifesto, has been instrumental in attracting these investments. Within six months of its implementation, the policy secured Memorandums of Understanding (MoUs) for projects valued at Rs 4.5 lakh crore—nearly equivalent to Chhattisgarh’s 2023-24 Gross State Domestic Product (GSDP) of Rs 5.09 lakh crore. If realised, these investments could potentially double the state’s economy. Nonetheless, the influx of capital signals a significant economic leap forward.
Security and development
While Chhattisgarh’s industrial landscape flourishes, the state continues to address its Maoist challenge. Earlier this month, security forces recovered 31 bodies during a weeks-long anti-Naxal operation near the Telangana border. On May 21, an additional 27 Maoists were neutralised in Narayanpur, aligning with Union Home Minister Amit Shah’s pledge to eradicate Naxalism by March 31, 2026.
“This is what a double-engine government looks like,” said Chhattisgarh Industries Minister Lakhan Lal Dewangan in an interview with media. “The Centre is tackling the security situation, while we at the state level are driving development.”
This dual focus—security and economic progress—has enabled Chhattisgarh to shed its image as a conflict-ridden region and pitch itself as an investment-friendly destination.
Crafting the Policy
The Industrial Development Policy was born out of meticulous planning. Following the BJP’s victory in the 2023 state elections, Chief Minister Sai formed a committee to design a policy tailored to Chhattisgarh’s unique strengths and challenges. The committee consulted industry associations, reviewed policies of neighbouring states, and engaged departmental officers to ensure a comprehensive approach.
“We wanted to leverage our potential in iron, coal, and bauxite while expanding into new-age industries,” said Ravi Mittal, Commissioner of Public Relations, as quoted in media reports. The policy emphasises core sectors like steel and cement while prioritising thrust sectors such as pharmaceuticals, textiles, agro-food processing, electronics, AI, robotics, IT, and data centres. These thrust sectors receive enhanced incentives to foster growth in nascent industries.
K.K. Shrivastava, Deputy Director of the State Investment Promotion Board, highlighted the policy’s focus on employment generation, particularly in the service sector. “We identified that the service sector has huge potential for job creation,” he was quotes saying in a report. The policy also addresses regional disparities by offering graded incentives, with higher benefits for industries in underdeveloped areas like Bastar and Sarguja.
A key challenge was overcoming Chhattisgarh’s reputation for bureaucratic red tape. “Industries faced multiple clearances across departments, strict land lease rules, and a lack of incentives,” said Nasim Ahmed Khan, a state government official, as per the report.
The new policy introduces a single-window clearance system, slashing compliance requirements through 350 reforms. The state has also established 34 industrial parks, with four more planned, including a pharmaceutical park and a smart industrial park in Janjgir-Champa.
Energy and Steel Lead the Charge
Of the Rs 4.5 lakh crore in investment proposals, the energy sector accounts for Rs 3 lakh crore, with Rs 1 lakh crore earmarked for thermal power plants. Public Sector Undertakings (PSUs) will invest over Rs 40,000 crore, while Adani Power leads private investments with Rs 48,000 crore. Jindal Power plans to invest Rs 12,800 crore in a 1,600 MW thermal plant in Raigarh and Rs 10,000 crore in a 2,500 MW solar plant with NTPC Green.
Additionally, Renew Power Limited proposed Rs 11,500 crore for pump storage and green hydrogen projects during the Investors Connect Meet in Delhi in December 2024.
The steel sector, leveraging Chhattisgarh’s abundant iron ore, contributes Rs 1 lakh crore. Jindal Steel aims to expand its Raigarh facility’s capacity from 3.6 million tonnes per annum (mtpa) to 9 mtpa by 2027. Smaller players like Greentech Solutions will invest Rs 1,245 crore in a new steel plant, expected to create 500 jobs. “We produce 46 million tonnes of iron annually and aim to reach 65 million tonnes in five years,” said Minister Dewangan, emphasising self-sufficiency amid global trade tensions.
Other sectors, including IT, cement, and food processing, account for Rs 50,000 crore. Notable proposals include a Rs 1,650 crore electric vehicle (EV) kit manufacturing unit by TWI Group, a PepsiCo bottling plant, and a Rs 2,367 crore cement plant expansion by Ambuja Cement. In Bengaluru, Keynes Technology committed Rs 1,000 crore to IT/ITES, while Britannia pledged Rs 200 crore for food processing.
On-Ground Impact: From MoUs to reality
Unlike past MoUs, which often remained unrealised, the new policy emphasises actionable outcomes through “Invitations to Invest” (ItIs). “An ItI is drafted after detailed discussions with investors, ensuring clarity and commitment,” explained Minister Dewangan.
This approach has accelerated project timelines. For instance, Polymatech’s semiconductor unit moved from proposal to foundation-laying in just three months. Similarly, the AI-based data centre park, operated by RackBank Datacenters, is set to generate 2,000 direct and indirect jobs with a potential expansion to 150 MW capacity.
In another boost, Bharat Earth Movers Limited (BEML), a defence PSU, acquired 100 acres in Janjgir-Champa at a token rate of Rs 1 per acre to establish a Heavy Earth Moving Equipment manufacturing unit. This aligns with the “Make in India” initiative and is expected to drive employment and industrial growth. Land has also been allotted to Yash Fan and Appliances and Aditya Birla Renewables for projects in Nava Raipur and Mungeli.
Looking Ahead
Chhattisgarh is now targeting textiles, IT, and IT-enabled services (ITES). Last month, Chief Minister Sai signed an MoU with the Clothing Manufacturers Association of India (CMAI) to attract textile industries. The cabinet also approved a National Institute of Fashion Technology (NIFT) in Nava Raipur to bolster the sector’s ecosystem. However, textile investments remain modest, with MoUs like Rs 500 crore from Klene Paks and Rs 100 crore each from Gokaldas Exports and SRV Knit Tech.
To address this, the policy is being amended to increase incentives for textiles from 100 per cent to 200 per cent of Fixed Capital Investment. New thrust sectors, including toy manufacturing, graphene, high-tech farming, meat processing, and Ayurvedic drugs, are being added. The defence and aerospace sectors will receive special packages, while tourism has been elevated to industry status, with relaxed investment criteria for hotels and resorts in Bastar and Sarguja.
Challenges and optimism
Despite its successes, the policy faces challenges in translating proposals into reality, a common hurdle in large-scale industrial initiatives. The dynamic approach of the Industries Department, which incorporates industry feedback, is a positive sign. “This is one of the most unprecedented initiatives since Chhattisgarh’s formation in 2000,” said an official as quotes in media, emphasising the multi-sector focus that balances established industries with emerging ones.