Trade, Commerce and industries of UP

Introduction

Uttar Pradesh, with a population of approximately 22 crores (16.7% of India’s population), benefits from a rich demographic dividend, a strong culture of handicrafts, technical expertise, entrepreneurial spirit, and a youthful workforce.

Uttar Pradesh contributes significantly to handicrafts, processed meat, carpets, and leather goods exports from India.

Trade & Commerce

• Trade involves the exchange of goods and services, primarily focusing on buying and selling, while commerce is a broader term encompassing activities like transportation, finance, and logistics in addition to trade.
• Trade’s main function is transferring products, while commerce involves financial management, legal compliance, and support services.
• Trade primarily aims for profit, while commerce has multifaceted goals, including profit generation, risk management, and market expansion.
• In essence, trade is a subset of the broader concept of commerce, which facilitates the complex exchange of goods and services in modern economies.

Trade

UP is a major centre for trade. It exports a variety of goods, including agricultural products, textiles, chemicals, and pharmaceuticals. UP also imports a variety of goods, including machinery, electronics, and petroleum products.

Top exports from UP

• Agricultural products: wheat, rice, sugarcane, fruits, vegetables, and dairy products
• Textiles: cotton, wool, and silk
• Chemicals: fertilisers, pesticides, and pharmaceuticals
• Pharmaceuticals: generic drugs and vaccines
• Engineering goods: machinery, equipment, and components

Top imports to UP

• Machinery
• Electronics
• Petroleum products
• Iron and steel
• Coal

UP’s Export Performance

• source – Niryat Patrika, September, 2022.
• Part 1 (April 2020 – March 2021 to April 2021 – February 2022)

Export increased by 29%, going from INR 121,140 Crore to INR 156,897 Crore.

UP’s share of India’s total exports fluctuated around 5%. It started at 4.8% in April 2021, dropped to 4.6% in August 2021, but consistently exceeded 5% from November 2021, ending at exactly 5% in March 2022.

• Trade Partners

Key export destinations included the USA (21%), UAE (10%), Nepal (6%), UK (5%), and Germany (5%).

Other potential markets explored by UP included Egypt, Netherlands, France, Italy, Spain, Malaysia, Bangladesh, and Indonesia.

The top three trade partners for Uttar Pradesh were the USA, UAE, and Nepal, contributing to around 40% of the state’s exports.

• District wise share in UP’s exports

The top 10 exporting districts from the state are namely as follows: G.B. Nagar (46%), Ghaziabad (7%), Moradabad (6%), Kanpur Nagar (5%), Agra (4%), Aligarh (4%), Sonbhadra (3%), Bhadohi (2%), Unnao (2%) and Bulandshahr (2%).

G.B. Nagar remained the highest exporting district from the state accounting for 46% of the export from the state.

Industrial Scenario

Uttar Pradesh is a state of medium industrial development. Due to a lack of minerals, infrastructure facilities, and capital investment, the development of non-agriculture-based industries has been limited, while agriculture-based industries and small-scale and cottage industries have seen more growth. The state’s agriculture-based industries include textiles, sugar, vegetable oil, and more. Other major industries in the state include cement, textiles, leather, alcohol, paper, glass, chemicals, agricultural machinery, and glass, among others.

Udyog Bandh :

• In 1981, Udyog Bandhu was established in the state as a high-level committee to facilitate the establishment of small, medium, and large-scale industrial units and ensure the resolution of related issues. The aim was to provide appropriate assistance for addressing timely setup and problem-solving for industrial units. In June 2020, Udyog Bandhu was updated and reconstituted as “Invest UP.”

Industrial Investment and Employment Promotion Policy :

• On November 3, 2022, the state government approved the Uttar Pradesh Industrial Investment and Employment Promotion Policy 2022. This policy aims to facilitate the rapid availability of land for large investors to establish industrial units, encourage the relocation of industries established abroad to Uttar Pradesh, and provide special incentives to investors who take over sick industries.

Uttar Pradesh Industrial Investment and Employment Promotion Policy 2017 :

• In July 2017, the state government of Uttar Pradesh announced the Uttar Pradesh Industrial Investment and Employment Promotion Policy 2017. This policy emphasises the development of Uttar Pradesh as a high-level investment destination to create maximum employment opportunities and achieve sustainable and balanced development in the state.
• “Make in UP” Division was established in this policy, and it was mentioned that the Uttar Pradesh Investment Promotion Board, chaired by the Chief Minister, would also be formed.

A brief description of the state’s major industries

Cotton textiles / Handloom industry

Based on the recommendation of the “Ram Sahay Commission,” the Handloom and Textile Directorate was established in the state on September 16, 1972. This Directorate oversees 13 regional offices operating in various districts.

From the perspective of the handloom and textile industry, Uttar Pradesh ranks third in India. The handloom industry here is the second-largest employment provider after agriculture. One-fourth of the country’s total handloom entrepreneurs are found in this region. It is the largest industry in the state.

Uttar Pradesh has long been renowned for its artistic textiles, such as Varanasi’s silk sarees, Sitapur’s dharis, Gazipur’s katwa parda, Amroha’s pile work, Gorakhpur’s bed covers, Ghaziabad’s terry towels, and more.

Handloom weaving of cotton textiles is prevalent in cities such as Kanpur, Agra, Bareilly, Meerut, Ghaziabad, Tanda, Hardoi, Hathras, Aligarh, Saharanpur, Badaun, Prayagraj, Mau, Varanasi, Rampur, Muradabad, Mirzapur, Modinagar, and Ujhani, among others. Kanpur is often referred to as the “Manchester of North India.”

The manual production of textiles by hand is primarily carried out in cities like Varanasi, Mau, Bilaspur, Sandila, Lucknow, Gorakhpur, Maghar, Farrukhabad, Mathura, Rampur, Mirzapur, Aligarh, Agra, Tanda, Barabanki, Amroha, Mubarakpur, Devband, Sikandarabad, Dhamapur, Etawah, and other cities.

Varanasi’s silk saris, Lucknow’s Chikankari embroidery, and Rampur’s fine textile weaving are world-renowned.

The printing work of quilts and covers is carried out in Farrukhabad, Jehangirabad, Pilkhua, and Mathura. Mathura is known for its printing work on muslin fabric.

The work of making carpets and rugs is done in Mirzapur, Bhadohi, Mathura, Bareilly, Agra, Sitapur, and Aligarh.

Blankets are made in Muzaffarnagar, Najibabad, and Lavad (Meerut).

Approximately 6.64 lakh weavers earn their livelihood from this industry in the state.

Uttar Pradesh State Textile Corporation :

• Established in 1969 as a government company under Uttar Pradesh government.
• Converted into a public limited company in 1973.
• Operated a total of five mills:
  • Jhansi
  • Sandila
  • Meerut
  • Kashipur
  • Jaspur
• The last two mills (Kashipur and Jaspur) were transferred to Uttarakhand.
• The remaining three mills were closed due to financial losses.
• In 1974, two spinning institutions (U.P. State Spinning Co., Ltd. and U.P. State Yarn Co., Ltd.) were formed in the state to cooperate with this corporation.
• State Spinning Company Ltd. had a total of 4 spinning mills (Rae Bareli, Barabanki, Mau and Akbarpur) with 25,000 spindles. These were closed in October 2005.
• Uttar Pradesh State Yarn Company Ltd. had a total of 4 spinning mills (Meja-Prayagraj, Rasda-Balia, Jaunpur, and Banda) with up to 50,000 spindles, two of which were closed in 2000.

Reservation of Handloom Textiles in India :

• To prevent the production of textiles typically crafted by handlooms on power-looms, the Indian government introduced the Handloom (Reservation of Articles for Production) Act in 1985.
• This legislation reserves the production of 11 specific textile products, including cotton and silk sarees, cotton and silk dhotis, towels, gamcha, blankets, carpets, and lungi, exclusively for handloom weaving.
• The Act aims to support and protect the traditional handloom industry in India by ensuring that these designated products are crafted using handloom techniques, thereby preserving the unique artistry and craftsmanship of handwoven textiles.
• By safeguarding the handloom sector, the government aims to promote employment opportunities, especially in rural areas, and maintain the cultural heritage associated with handloom textiles.
• The reservation of articles for handloom production aligns with broader initiatives to promote sustainable and traditional craftsmanship in the textile industry.
• 10% discount is offered by the central government on the sale of handloom textiles. This discount is provided during special fairs/exhibitions.”
• With the assistance of the central government, the Handloom Export Scheme has been in operation since November 2007.

Uttar Pradesh Textile and Garmenting Policy-2022 :

• Approval Date : October 2022
• Main Objective : Establish Uttar Pradesh as a global textile manufacturing hub
• Promotion of Textile Industry : Encourage all types of units related to the textile industry
• Investment Target : Attract an investment of 10,000 crores INR
• Job Creation : Aim to create 5 lakh jobs in the textile industry.

Mahatma Gandhi Bunkar Bima Yojana ( MGBBY ) :

• The Mahatma Gandhi Bunkar Bima Yojana is being implemented by the Government of India since 2008-09.
• The objective of this scheme is to provide insurance coverage to registered weavers aged between 18 to 50 years and 51 to 59 years.

Khadi Gramodyog

Khadi-Gramodyog ( Khadi Village Industries ) :

• The term “Khadi” refers to cloth woven from hand-spun cotton, silk, or wool yarns, or a combination of these types of yarns. On the other hand, “Gramodyog” refers to industries located in rural areas. These industries produce goods with or without the use of electricity, provide services, and have a permanent capital investment per worker of less than fifty thousand rupees.

UP Khadi and Village Industries Board :

• In the state, the supervision of Khadi and Village Industries activities is carried out by the Khadi and Village Industries Board, established in 1960. The board’s objective is to establish small-scale industries and industries with low capital investment in rural areas, thereby creating more employment opportunities and strengthening the rural economy.
• The assistance/loan facility provided by the Uttar Pradesh Khadi and Village Industries Board is available to registered Village Industries Associations, registered NGOs, individual entrepreneurs, educated unemployed youth, women, as well as members of SC and ST communities.

Schemes under the Khadi and Village Industries Sector :

• Chief Minister’s Village Industries Employment Scheme : Provides loans of up to 10 lakhs INR to individual entrepreneurs.
• Prime Minister’s Employment Generation Programme : Aims to generate employment opportunities.
• Rural Employment Generation Programme : Offers loans up to 25 lakhs INR with a 10% margin money grant.
• Various training programs for different industries are also available.

On the occasion of Gandhi Jayanti, a 10% discount is offered on the sale of Khadi textiles and clothing by accredited Khadi institutions/committees for 108 working days, based on the state government’s revenue and expenditure.

Silk Industry

Introduction :

• China is the largest producer of natural silk in the world.
• India ranks as the second-largest producer of natural silk globally.
• There are four primary types of silk produced worldwide: Mulberry, Tussar, Eri, and Muga.
• India produces all four types of silk.
• Muga silk production is exclusive to India, particularly in Assam.

In Uttar Pradesh, the production of Mulberry, Tussar, and Eri silk occurs.

• Mulberry silk is derived from Mulberry tree leaves.
• Tussar silk caterpillars feed on Arjun and Saja tree leaves.
• Eri silk caterpillars feed on Castor plant leaves.

In the state, the production of Mulberry, Tussar, and Eri silk is carried out in 56 districts, including Lakhimpur Kheri, Mirzapur, Sonbhadra, Chandauli, Bahraich, and others.

In the state, there are a total of 160 government-owned Mulberry silk farms in 43 districts, including Sonbhadra, Bahraich, Chandauli, Lakhimpur, and others.

In the state, the Tussar silk development scheme is being implemented in 12 districts, including Sonbhadra, Chandauli, Mirzapur, Jhansi, Lalitpur, Fatehpur, Chitrakoot, Mahoba, Jaunpur, Sultanpur, Mathura, and others. Currently, there are a total of 63 government-owned Tussar silk farms established in the state.

The Eri silk development scheme is being implemented in 8 districts of the state, including Fatehpur, Kanpur Nagar, Kanpur Dehat, Hamirpur, Banda, Chitrakoot, Jalaun, and others. There are a total of 5 government-owned Eri (Castor) silk farms in the state.

In the total silk production in the state, the highest contribution comes from Mulberry silk, followed by Tussar and Eri silk, respectively.

In the state, most of the silk work is done in districts such as Varanasi, Mau, Etawah, and others. Varanasi’s silk sarees are globally renowned.

In 1992, the State Cooperative Sericulture Federation was established to promote growth in silk production. Currently, the federation has 74 cooperative societies as its members in the state.

Silk Research and Development Centers in Uttar Pradesh :

• Mulberry silk research and development : Subhagpur Silk Research and Development Centre (Gonda)
• Tussar silk research and development : Sonbhadra
• Eri silk development and research : Kanpur Nagar Silk Research and Development Centre

Sugar Industry

Introduction :

• Sugarcane is a major cash crop in the state.
• Uttar Pradesh contributes around 50% of the country’s total sugarcane cultivation.
• It provides employment to over 3 million sugarcane farmers, mill workers, and workers in the jaggery and khandsari industry.
• The Ganga-Yamuna Doab region is a significant hub for sugar production, accounting for approximately 65% of the state’s sugar production.
• The remaining sugar production occurs in the eastern districts of Uttar Pradesh.

Development of Sugar Industry :

• Sugarcane is a plant of Indian origin.
• Initially, it was used to make jaggery and molasses.
• In 1903, the British established India’s first sugar mill in Pratappur (Deoria).
• Over 50 mills were established soon after.
• In 1935, the Sugar Department was formed to control and promote their development.
• In 1938, the Sugar Department was further developed, and the Sugar Factories Control Act-1938 was implemented.

Sugarcane Development Initiatives in Uttar Pradesh : 

1. Sugarcane Development Councils :
   1. In 1948-49, with the aim of implementing various measures to increase production in the sugarcane producing regions, Sugarcane Development Councils were formed.
   2. Currently, there are a total of 152 Sugarcane Development Councils in the state.
2. Sugarcane Development Committees
   1. In 1948-49, the state established several Sugarcane Development Committees.
3. Uttar Pradesh Cooperative Sugarcane Federation Ltd.
   1. The Uttar Pradesh Cooperative Sugarcane Federation Ltd. was founded in 1949 to support these committees.
   2. Presently, there are 169 cooperative sugarcane development committees operating under this federation.
4. The Lal Bahadur Shastri Sugarcane Farmers’ Institute.
   1. The Uttar Pradesh Sugarcane Farmers’ Institution was founded in 1975 in Lucknow.
   2. Its primary mission is to offer training in sugarcane farming practices and sugar industry-related technologies.
   3. The institution has been renamed as the Lal Bahadur Shastri Sugarcane Farmers’ Institution.
   4. Branch training centers affiliated with the institution are located in five districts : Gorakhpur, Moradabad (formerly Varanasi), Shahjahanpur, Gonda (Rajjanpur), and Muzaffarnagar.
5. Uttar Pradesh Council of Sugarcane Research
   1. The Uttar Pradesh Sugarcane Research Council was established in 1976-77.
   2. Its primary purpose is to conduct research on various aspects of sugarcane cultivation.
   3. There are 9 sugarcane research centers and seed development regions under this council.
   4. These centers are located in different districts, including Muzaffarnagar, Gorakhpur, Khiri, Kushinagar, Ghazipur, Sultanpur, and Balrampur.
   5. Kushinagar and Khiri districts have two research centers each.

Sugar producing Area :

1. Total of 44 sugarcane-producing districts in the state.
2. There are 9 sugarcane-producing regions: Meerut, Saharanpur, Moradabad, Bareilly, Lucknow, Ayodhya (Faizabad), Deoria, Gorakhpur, and Devaria.
3. Additionally, there are 3 sugar-producing regions: Meerut, Bareilly, and Lucknow.

The Uttar Pradesh Cooperative Sugar Factories Federation Ltd.

• In 1963, the Uttar Pradesh Cooperative Sugar Mill Federation was established.
• Currently, there are 24 sugar mills under it.

Uttar Pradesh State Sugar Corporation Ltd.

• The Uttar Pradesh State Sugar Corporation Ltd. was established in 1971 under the Uttar Pradesh Sugar Undertakings (Acquisition) Act.
• Initially, it oversaw 33 sugar mills in the state.
• Currently, the majority of these mills have ceased operations, with only 1-2 remaining operational.

Other facts :

• There are approximately 100 private sugar mills in the state.
• In order to attract capital investment in the sugar industry, the Sugar Industry Promotion Policy 2004 was announced in 2004.

Cement Industry

Cement industry is vital in the state. Cement factories are situated in various locations including :

• Chunar and Kajrahat (Mirzapur)
• Churk and Dalla (Sonbhadra)
• Gauriganj and Jagdishpur (Amethi)
• Kasganj
• Jhansi
• Sikandarabad (Bulandshahr)
• Tanda (Ambedkar Nagar)
• Raebareli

Electronic Industry

• Rapid development of the electronic industry in the state.
• Several electronic plants established in Gautam Buddh Nagar, Ghaziabad, and Lucknow.
• State government-owned Opteron factories located in Lucknow, Prayagraj, Jaunpur, and Varanasi.

Leather Industry

• The main centre of the leather industry in the state is Kanpur.
• Leather shoes, suitcases, belts, and wallets are produced in Agra, Lucknow, Meerut, Bareilly, and Kanpur.
• There are 86 centers in the state for tanning and dyeing leather.

Vegetable Industry

• The state has vegetable ghee factories located in Kanpur, Modinagar, Meerut, Prayagraj, Aligarh, and Ghaziabad.
• Additionally, modern large-scale edible oil mills are situated in Kanpur, Agra, Ghaziabad, Hapur, and Modinagar (Meerut).

Chemical Industry

• Sulphuric acid and bio-sulphide factory in Kanpur
• Soda ash and ammonia chloride factory in Varanasi
• Artificial rubber factory in Bareilly
• Factory for sulphuric acid and other chemicals in Ghaziabad
• Factory for preparing iron particles mixed with silica sand in Shankargarh, Prayagraj

Glass Industry

• Uttar Pradesh is a significant hub in the glass industry in India.
• Major glass production centers in the state:
  • Bahjoi ( Sambhal )
  • Prayagraj (Allahabad)
  • Firozabad
  • Ghaziabad
  • Meerut
  • Lucknow
  • Makkhanpur (Firozabad)
  • Hirangaon
  • Varanasi
  • Sasani
  • Hathras
  • Balabali, etc.
• Firozabad is particularly famous on a global scale for its production of glass bangles.

Aluminium industry

• Hindalco, the Hindustan Aluminium Corporation, situated in Renukoot (Sonbhadra), is involved in producing aluminium ingots and sheets using bauxite.
• Various cities, including Agra, Aligarh, Meerut, Kanpur, Mathura, Hathras, and others, host factories specialising in the production of utensils from aluminium sheets.

Engineering industry

The engineering industry manufactures various types of machinery and equipment. Such industries are established in districts like Ghaziabad, Kanpur, Prayagraj, Lucknow, Agra, and more in the state.

Fertilizer Industry

Major urea fertilizer production plants in Uttar Pradesh :

• Kanpur
• Bareilly
• Prayagraj (Phulpur)
• Gorakhpur (undergoing revival through private collaboration)

Phosphate fertilizer manufacturing plants in the state:

• Magarwara (Unnao)
• Kanpur
• Prayagraj

Spirit and Liquor Industry

Spirit and liquor manufacturing factories are located in Ghaziabad, Unnao, Lucknow, Rampur, Meerut, Gorakhpur, Saharanpur, Daurala, Mansurpur, and Nawabganj in the state.

Agricultural Machinery Industry

In the state, the agricultural machinery manufacturing industry is located in cities such as Agra, Aligarh, Meerut, Kanpur, Lucknow, and others. Here, various equipment for sowing, plowing, harvesting, sifting grain, dairy farming, poultry farming, pesticide production, and farm transportation, etc., are produced.

Bicycle Industry

In the state, the major centers of the bicycle industry are Agra, Varanasi, Rampur, Lucknow, Kanpur, and Prayagraj. Here, bicycles such as Royal Prince, Popular Hansa, Jai hind, Asia, Saibro, and others are manufactured.

Brass and Other Metal Industry

• In the state, the manufacturing of brass and brass utensils is carried out in Varanasi, Mirzapur, Farrukhabad, Hathras, Atrauli, Moradabad, Shamli, Hapur, and Badaun.
• The work of plating and carving on utensils is carried out in Moradabad and Mirzapur.
• Locks, brass pliers, knives, and scissors are manufactured in Hathras, Mathura, Aligarh, and Meerut, with Aligarh serving as the primary centre for lock production.
• Brass statues are manufactured in Aligarh, Moradabad, and Ayodhya.
• Iron weights are produced in Saharanpur and Agra.

Woollen Textile Industry

Woollen textile mills are located in Kanpur, Ghaziabad, Shahjahanpur, and Mirzapur. Kanpur’s Lal Imli Mill was India’s leading woollen textile mill, but it is currently closed.

Jute Industry

In Uttar Pradesh, there are three jute mills, with two in Kanpur and one in Shahjahanwan (Gorakhpur).

Soap Industry

In the state, soap manufacturing factories are concentrated in Kanpur, Agra, Modinagar, Ghaziabad, Meerut, and other cities.

Paper Industry

The state has the maximum number of paper mills in Muzaffarnagar, followed by Meerut, Saharanpur, Ghaziabad, Moradabad, Rampur, and Unnao. Bagasse is used as raw material in some of these mills.

Ceramic ( Pottery ) Industry

In the state, earthenware (pottery) utensils are manufactured in Khurja (Bulandshahr), Mirzapur, Sonbhadra, and Ghaziabad.

Wood and furniture industry

• The industry of crafting wooden furniture and toys in the state is concentrated in Hathras, Varanasi, Saharanpur, and Bareilly.
• Wood carving work is done in Saharanpur and Nagina (Bijnor).
• Wooden toys are made in Lucknow and Varanasi.
• Canes and sticks are made in Bareilly.
• Sports goods are manufactured in Meerut and Agra.

Overview of Economy of UP