Chhattisgarh in talks with US, Russian defence firms to set up manufacturing, says chief minister Sai
Summary
- With a ₹1 trillion investment target, Chhattisgarh aims to become a key player in India’s defence and green energy sectors.
New Delhi: Chhattisgarh is courting defence firms from Russia and the US to set up manufacturing units in the state under its new Industrial Development Policy 2024-30, as it looks to position itself as a key player in India’s defence supply chain.
"Numerous companies from Russia, the US, and other countries participated in our investment summit in Mumbai, and these investments will come to Chhattisgarh," chief minister Vishnu Deo Sai told Mint in an interview. He, however, did not disclose specific companies or deal sizes.
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The second leg of the investment summit, held in Mumbai on 23 January, saw Chhattisgarh attract ₹6,000 crore worth of investment proposals across sectors.
The largest commitment came from Ambuja Cement, which proposed an investment of ₹2,367 crore, according to the state government. However, details on any MoUs signed with defence firms remain unclear.
"We expect investments of up to ₹1 trillion under the new Industrial Development Policy," he added.
The new industrial policy, closely tied to job creation, offers a range of financial incentives to manufacturers investing at least ₹1,000 crore and employing 1,000 local workers. These include concessions in electricity duty, stamp duty waivers, partial Employee Provident Fund reimbursement, and transport subsidies for exporters.
The state government is also open to customized incentive packages for large investors, Sai said.
Under the policy, defence equipment manufacturers must invest at least ₹10 crore in plant and machinery to qualify for benefits, while suppliers must invest a minimum of ₹1.4 crore.
Chhattisgarh is positioning itself as a defence manufacturing hub, leveraging its existing Durg-Bhilai-Raipur industrial belt, which houses several defence component makers.
Green push and challenges
Despite being a coal-rich state, Chhattisgarh is aligning itself with global green manufacturing policies. Sai emphasized that renewable energy is now cheaper than coal-based electricity, making it a viable industry alternative.
As of March 2024, about a third of Chhattisgarh’s total 9,176 MW power generation came from non-fossil fuel sources, including solar, wind, and hydroelectric plants, according to the Ministry of Power.
However, the ministry noted that Chhattisgarh must expand its renewable energy capacity over the next decade to meet growing demand and reduce its total unserved energy count.
Read this | India stocking up coal for high power demand, aims 50 mn tn inventory at plants by April
Expanding solar power remains a challenge due to dense forests and water bodies, which limit land availability. “We are planning to install floating solar panels on water bodies, and efforts are also underway to promote hydroelectric power generation," Sai said.
Growth and reforms
The state’s industrial sector was a key growth driver in FY25, with output expected to rise 9.2% from ₹2.12 trillion to ₹2.31 trillion, according to the state’s economic survey. Industry, including manufacturing, contributed nearly 48% to the state’s economy. Overall, Chhattisgarh’s GDP is projected to grow 7.5% in FY25, driven by services and industry.
The state has also secured ₹450 crore from the Centre under an interest-free loan scheme tied to economic reforms. In her budget speech, finance minister Nirmala Sitharaman announced a ₹1.5 trillion outlay for such loans in FY26, along with additional incentives for states implementing structural reforms.
Chief minister Sai said his government is working with the Union Ministry of Civil Aviation to develop Raipur as an international cargo hub, a move aimed at boosting exports of forest produce, rice, fruits, and vegetables.
Tourism is another focus, Sai said, with plans to promote destinations such as Chitrakoot waterfalls, historic caves, and the forests of Abujmarh. The government is working on infrastructure upgrades to support the sector.
Also read | On tourism, govt's heart is in the right place. Where's the money though?
The Industrial Development Policy includes provisions for private investments in amusement parks, hotels, museums, and eco-tourism centres. The state government will offer financial incentives to promote these projects.
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