Yogi govt clears new aerospace, def unit policy to propel U.P’s growth
The policy sets an ambitious target of attracting ₹50,000 crore in investments, with the potential to generate direct employment for 1 lakh people across the state.
The Uttar Pradesh government on Wednesday approved 10 key proposals aimed at accelerating the state’s development.

These decisions were taken at a meeting of the state cabinet chaired by chief minister Yogi Adityanath at Mahakumbh Nagar in Prayagraj. Among the decisions, the Aerospace and Defence Unit and Employment Promotion Policy 2024 was introduced to position Uttar Pradesh as a leader in the sector, a state government spokesman said.
The policy sets an ambitious target of attracting ₹50,000 crore in investments over the next five years with the potential to generate direct employment for 1 lakh people across the state.
The cabinet meeting was held at the Triveni Sankul Complex auditorium at the Mahakumbh-2025 tent city in Prayagraj.
The Yogi ministers also approved a new FDI Policy to boost setting up of foreign industries in Uttar Pradesh in order to spur industrial and economic growth. Under this policy, the state government will offer up to 80% subsidy on land to foreign firms investing in the state. Additionally, major reforms have been introduced in the UP Industrial Investment and Employment Promotion Policy to further boost industrial development.
The Uttar Pradesh Aerospace and Defence Unit and Employment Promotion Policy 2024 aims to position Uttar Pradesh as a leading aerospace and defence hub, accelerating indigenous capabilities, fostering innovation, and promoting global collaboration to enhance national security and economic prosperity.
The policy aims to strengthen the aerospace and defence (A&D) sector in Uttar Pradesh by creating a robust, hi-tech, and efficient A&D manufacturing ecosystem within the UP Defence Industrial Corridor (UPDIC). It also seeks to attract startups and investments for the development of state-of-the-art facilities in the sector.
A&D-based common facility centres are planned to enhance the skills and capacities of startups and MSMEs in the UPDIC. The policy further aims to attract large A&D manufacturing projects and DPSUs, while promoting research and innovation, ensuring that Uttar Pradesh becomes a pivotal contributor to India’s defence and aerospace landscape.
Adityanath aims to drive the growth of companies that align with India’s vision of self-reliance in the aerospace and defence sector. The new policy encourages establishment of artificial intelligence and software development centers in A&D.
The policy offers significant incentives, including front-end subsidies for A&D units, land subsidies, stamp duty exemptions, and capital subsidies. Additionally, the Yogi government will provide benefits like exemptions on transportation charges, with special provisions for women entrepreneurs to encourage their participation in the sector. The ministry of defence has set an ambitious target to double the country’s A&D production to $25 billion and exports to $5 billion by 2025-26. By 2047, the A&D manufacturing sector is expected to contribute 25% to the nation’s GDP. To achieve these goals, two defence industrial corridors have been established in India—Uttar Pradesh and Tamil Nadu—positioning UP as a key player in this transformative vision.
The Uttar Pradesh cabinet has approved the transfer of the 166-bed Government Combined Hospital in Balrampur to the medical education department. This move aims to establish the Autonomous State Medical College, Balrampur, by converting the Balrampur satellite center of King George’s Medical University (KGMU).
The establishment of this medical college is intended to provide specialised healthcare to the public and create medical education opportunities for youth. Additionally, 1,394 academic and non-academic posts have been created in line with MCI/NMC standards to facilitate the conversion and operation of the medical college.
The Yogi government has approved the subsidy payment to UPSIDA for the land allotted to M/s Ashok Leyland Ltd. under the front-ended land subsidy provision of the Incentive Policy 2023, aimed at encouraging FDI and investments from Fortune 500 companies. The Empowered Committee’s recommendation from September 27 regarding this subsidy payment has been accepted.
As per the FDI Policy 2023, 75% of the land cost, amounting to ₹106.51 crore, is payable to UPSIDA for the land provided to Ashok Leyland. The proposed project will initially establish a facility with a production capacity of 2,500 buses per year, along with a center of excellence. The total project cost is estimated at ₹186 crore.
The Yogi Cabinet has approved the recommendations of the High-Level Authorised Committee (HLEC), chaired by the chief secretary, during its meetings in August and September 2024. Under the Industrial Investment and Employment Promotion Policy 2022, special facilities and concessions have been sanctioned for mega-category industrial units in the state.
As part of this initiative, ₹250 crore has been approved as a capital subsidy for Triveni Engineering and Industries Ltd in Moradabad, and ₹10,749 crore as SGST reimbursement for Gallant Ispat Ltd. in Mirzapur.
Under the Swami Vivekananda Yuva Sashaktikaran Yojana, the Yogi government will procure 25 lakh smartphones for free distribution to empower the youth technologically. The Cabinet has granted approval for the final bid document, and the scheme will be applicable for five years.
A budget of ₹4000 crore has been allocated for the financial year 2024-25. This innovative initiative aims to provide smartphones to skilled youth enrolled in higher education, technical education, health education, skill development training, and ITI programs, ensuring they become technically empowered and future-ready.
The cabinet has approved selection of successful bidders to operate medical colleges in public-private partnership (PPP) mode with viability gap funding from the Central government. This initiative targets unserved districts in Uttar Pradesh, including Hathras, Baghpat, and Kasganj, where no medical colleges currently exist in the government or private sector.
Following technical and financial evaluations of received tenders, Rajshree Educational Trust was selected as the lowest bidder (L-1) for Hathras and Kasganj, while Jaipal Singh Sharma Trust was chosen for Baghpat. This step aligns with the state’s policy to establish medical colleges in underserved districts through PPP mode, ensuring equitable access to medical education and healthcare facilities.
