Investing in India’s Madhya Pradesh State: Multi-Sectoral Opportunities for Foreign Companies

The state of Madhya Pradesh, located in central India, actively encourages foreign investment in key sectors, including manufacturing, infrastructure, and renewable energy. Ambitious about its industrial objectives, the state is inviting foreign investors to benefit from its progressive policies leveraged alongside logistics infrastructure development.

Madhya Pradesh’s investment pitch at Davos: Infrastructure, policy depth, and execution focus

At the World Economic Forum Annual Meeting in Davos, Madhya Pradesh is positioning itself as a long-term investment destination anchored in infrastructure readiness, sector-specific policy frameworks, and execution capability. As per media reports, the state government has outlined a growth agenda, targeting a doubling of gross state domestic product (GSDP) to over INR 30 trillion (US$330.12 billion) within the next five years.

Infrastructure-led investment readiness

A central element of Madhya Pradesh’s investor outreach is its expanding industrial infrastructure. The state is developing 48 industrial parks across 19,300 acres, alongside the modernisation of 33 existing parks with investments exceeding INR 5 billion (US$55 million). These facilities include sector-focused industrial ecosystems such as the PM MITRA Mega Textile Park in Dhar, a medical device park in Ujjain, renewable energy equipment manufacturing zones, food processing clusters, and MSME-oriented industrial areas. Together, these parks are designed to offer plug-and-play infrastructure and faster project deployment.

Connectivity as a structural advantage

Connectivity is being positioned as a core competitive strength. Madhya Pradesh’s central geographic location enables efficient access to a large share of India’s population, supported by extensive road and rail networks. The state currently operates eight airports, with an additional airport under development in Ujjain. Further strengthening its logistics backbone, the central government is investing approximately INR 11 billion (US$121.04 million) in a multimodal logistics park to improve supply chain efficiency and reduce logistics costs for manufacturers and exporters.

Policy depth and sectoral focus

To enhance competitiveness, Madhya Pradesh has implemented 18 sector-specific policies in 2025 covering manufacturing, services, infrastructure, tourism, and innovation. Recent initiatives include the launch of a spacetech policy targeting communication, geospatial services, defence, and advanced manufacturing, alongside ongoing work on an artificial intelligence (AI) policy.

Madhya Pradesh’s strategic location and market access

As India’s second-largest state, Madhya Pradesh offers direct access to major domestic markets. Its location along the Delhi–Mumbai Industrial Corridor (DMIC) strengthens logistics efficiency and supply chain integration.

The state hosts:

• Over 100 industrial zones
• Seven smart cities
• 13 proposed greenfield industrial areas
• A road network exceeding 500,000 km
• Five major airports: Bhopal (international), Indore (international), Gwalior, Jabalpur, and Khajuraho
• Six inland container depots (ICDs) supporting multimodal exports

According to the state government, 50 percent of India is reachable within four hours from Madhya Pradesh, giving manufacturers a strong distribution advantage.

Land availability remains a key differentiator, enabling large-scale industrial development supported by a growing workforce and expanding infrastructure.

Madhya Pradesh’s economic performance and industrial ecosystem

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Madhya Pradesh recorded 11.05 percent year-on-year GSDP growth in FY 2024-25, reaching INR 15.03 trillion (US$165.3 billion), up from INR 13.53 trillion (US$148.8 billion) the previous year. GSDP is projected to rise to INR 16.94 trillion (US$192.14 billion) in FY 2025-26.

Per capita GSDP stood at INR 156,381 (US$1,720.9) in FY 2023-24, reflecting a 10.91 percent CAGR since FY 2015-16.

The state’s five major industrial regions—Bhopal, Indore, Gwalior, Jabalpur, and Rewa—host clusters in:

• Automotive and engineering
• Pharmaceuticals and medical devices
• Textiles and apparel
• Food processing
• IT/ITeS and electronics (ESDM)
• Cement and mining

Key industrial corridors such as Pithampur–Dhar–Mhow, Ratlam–Nagda, Shajapur–Dewas, and Neemach–Nayagaon are being developed as multi-sector investment zones.

Export growth and global integration

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Madhya Pradesh’s merchandise exports reached INR 662.18 billion (US$7.28 billion) in FY 2024-25, marking 6 percent growth year on year. IT-SEZ exports contributed INR 40.38 billion (US$444.28 million).

Top export categories included:

• Pharmaceuticals – INR 119.68 billion (US$1.31 billion)
• Animal feed – INR 60.62 billion (US$666.97 million)
• Machinery – INR 54.97 billion (US$604.8 million)

Major export destinations were the United States, the UAE, and Bangladesh, helping the state improve its national export ranking to 11th.

To sustain momentum, the government launched the Export Promotion Policy 2025, offering incentives for:

• Green manufacturing
• Logistics infrastructure
• First-time exporters
• Multimodal connectivity expansion

Investor-friendly policies and approvals

Madhya Pradesh is strengthening its investment proposition through:

• Industrial Promotion Policy 2025
• Invest MP Single-Window System
• Streamlined approvals and compliance support
• Financial incentives linked to exports, employment, geography, and FDI
• Strategic alignment with the DMIC for enhanced logistics access

Infrastructure and resource advantages

The state offers:

• 125,000+ acres of industrial land
• Surplus power at competitive tariffs
• Strong road, rail, and air cargo connectivity
• International air cargo facilities in Indore and Bhopal
• Six ICDs: Tihi, Mandideep, Dhannad, Malanpur, PowerKheda, and Kheda

Madhya Pradesh is also one of India’s most mineral-rich states, leading in:

• Limestone, copper, rock phosphate, manganese, dolomite
• Asia’s thickest coal seam (Singrauli)
• India’s only significant diamond mining operations (Panna)

In agriculture, the state contributes:

• ~32 percent of India’s pulse production
• ~22 percent of oilseed output
• Strong foodgrain production

With mega food parks, cold chains, and warehousing infrastructure, Madhya Pradesh is increasingly attractive for food processing and agribusiness investments.

FDI performance

Between October 2019 and June 2025, Madhya Pradesh attracted INR 47.60 billion (US$523.7 million) in cumulative FDI, reflecting rising foreign investor confidence.

Business incentives and policy framework

Madhya Pradesh offers investment assistance of up to 40 percent of Eligible Fixed Capital Investment (EFCI), with multipliers for:

• Export performance
• Job creation
• FDI inflows
• Regional development

Key sectors and investment opportunities

Leading multinational and domestic firms have invested in Madhya Pradesh in various sectors. Some of the major companies in key sectors are noted in the below table.

The Government of Madhya Pradesh has prioritized these sectors because they:

• Align with national industrial priorities (PLI, Make in India, EV mission)
• Have high employment potential
• Offer export growth opportunities
• Enable technology transfer and innovation
• Support balanced regional development

Each sector benefits from:

• Investment Promotion Assistance (up to INR 2 billion/US$22 million)
• Employment and export multipliers
• Infrastructure and power subsidies
• FDI-linked incentives
• Sector-specific industrial parks

(US$1 = INR 90.87)

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