Madhya Pradesh has witnessed massive investments in infrastructure – Rs 1.27 trillion in the last five years – in what could make it a key destination for Corporate India, which is about to start another investment cycle after a long gap. The state will showcase its potential across sectors during the Invest Madhya Pradesh Global Investors Summit to be held at Indore on January 11 and 12.

It has offered a bucket of incentives to investors across the sectors in recent years, with special focus on labour-intensive sectors like garments, food processing and pharmaceuticals.

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In November, in a meeting with industrialists, chief minister Shivraj Singh Chouhan called upon them to make optimum use of the investment opportunities in the state. Earlier, he had addressed an investor summit in Mumbai and in October, a round table conference in New Delhi on the textile industry. 

According to sources, the Investment Promotion Assistance (IPA) being made available for large-scale industrial units has found many takers in recent months. Under the scheme, investment in plant and machinery of more than Rs 10 crore gets assistance varying from 10 to 40% based on a formula. For food processing units, 1.5 times additional incentives are given. Export-oriented units with shipments of 25-75% of their total sale would be eligible for 1 to 1.2 times aid over and above basic IPA.

Officials expect greater inflows of foreign direct investments (FDI) also into the central Indian state, given the improvement in infrastructure facilities. The state, the second largest in India by area, has proximity to 50% of India’s population, reported 10.12% growth in gross state domestic product (GSDP), much higher than the national average of 8.7% in 2021-22.

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Between October 2019 and September 2022, Madhya Pradesh drew FDI of $519 million. It occupied the 15th spot among states in grabbing the FDI during this period, showed the latest official data.

The state has good connectivity to large markets and major metro cities such as New Delhi, Mumbai, Ahmedabad, Hyderabad and Kolkata. MP possesses a road network of 2,30,000 km and over 550 trains pass through the state daily. It is connected to all major metro cities by air.

To leverage its strategic location and overcome the challenges of landlocked economy the state has developed 7 Inland Container Depot (ICDs) and is also developing Multi-Modal Logistics Parks.

With the automative industry increasingly moving towards electrically powered and fuel cells based vehicles (EVs), MP is also gearing up to become EVs hub. Automotive original equipment manufacturers (OEMs) and ancillaries received $356.5 million in foreign capital investment in the state. Indore, the commercial capital of central India, has emerged as an automobile and industrial hub.

Madhya Pradesh’s natural advantages include forests, lands, electricity and mineral resources. It has also been a major producer of agricultural items. The key areas identified for investments are agri-business, food processing, renewable energy and education.

For the garment sector, there is a special package of incentives offered such as an interest subsidy of 5% for 7 years on a term loan taken for plant & machinery and employment generation assistance of `5,000/ employee/ month for maximum 5 years for new employees. The state also offers skill development and training expenses reimbursement assistance of Rs 13,000/ new employee for MP domicile employees.

About 50% discount on the development fee in case of taking lease land in the industrial area. Among others, reimbursement of stamp duty and registration fee on land, electricity duty exemption for 7 years and concessions on power tariff.

Madhya Pradesh is one of the two states which will meet the doubling of farmers’ income in seven years through June 2023. MP’s target was to raise the average farmer’s income from agri-based activities to Rs 2,01,813 in 2022-23 from Rs 89,434 in 2015-16. MP has abundant raw materials like grains, oilseeds, horticulture, floriculture and medicinal plants for food processing plants to flourish. It has a ready infrastructure with eight dedicated food parks.