Govt. Targets Economic Growth in Tier 2 & 3 Cities

24 Jan 2025 CW Team

The Commerce Ministry has directed all states and Union Territories (UTs) to develop a "City Level Economic Vision for 100 Tier 2 and 3 Cities" by June 2026. This initiative aims to foster manufacturing hubs in 1,039 out of 7,935 towns across India, extending beyond traditional Tier 1 industrial cities.

The plan, outlined by the Department of Promotion of Industry and Internal Trade (DPIIT), was discussed during the Fourth National Conference of Chief Secretaries in December 2024. The goal is to substantially increase the manufacturing sector's contribution to India’s Gross Value Added (GVA) from its current share of 17%.

Strategic Shift to Tier 2 and 3 Cities

Manufacturing in Tier 2 and 3 cities is seen as crucial to India's economic development. The government aims to tackle infrastructure issues, improve land availability, enhance logistics, develop workforce skills, and reduce the compliance burden on businesses to establish a thriving manufacturing ecosystem.

The initiative will focus on capital-efficient and labor-intensive industries in states with low Gross State Domestic Product (GSDP), while states with higher GSDP and established manufacturing bases will prioritize R&D and high-tech industries. This regional approach ensures that states can leverage their unique strengths and address specific challenges.

Key Timelines and Enablers for Growth

The government has earmarked specific timelines and key enablers to support these reforms. By June 2026, states are expected to implement State Logistics Action Plans based on the LEADS (Logistics Ease Across Different States) assessment. Additionally, states are urged to streamline business processes by decriminalizing certain state laws and improving single-window systems by December 2025.

In terms of industrial infrastructure, the Ministry has set a target to develop 100 "plug and play" industrial parks with flexible land lease policies by December 2025. States are also expected to integrate the PM Gati Shakti National Master Plan for large-scale industrial projects and upgrade the infrastructure of 1,000 Industrial Training Institutes (ITIs) to support skills development.

Boosting Employment through Manufacturing

By shifting manufacturing focus to Tier 2 and 3 cities, the government aims to increase the share of manufacturing in employment from the current 12% to 22% by 2047. The strategy is seen as a crucial step to create a more balanced economic ecosystem that drives employment growth and boosts industrial output across the country.

Your next big infra connection is waiting at RAHSTA 2025 – Asia’s Biggest Roads & Highways Expo, Jio World Convention Centre, Mumbai. Don’t miss out!

The Commerce Ministry has directed all states and Union Territories (UTs) to develop a City Level Economic Vision for 100 Tier 2 and 3 Cities by June 2026. This initiative aims to foster manufacturing hubs in 1,039 out of 7,935 towns across India, extending beyond traditional Tier 1 industrial cities. The plan, outlined by the Department of Promotion of Industry and Internal Trade (DPIIT), was discussed during the Fourth National Conference of Chief Secretaries in December 2024. The goal is to substantially increase the manufacturing sector's contribution to India’s Gross Value Added (GVA) from its current share of 17%. Strategic Shift to Tier 2 and 3 Cities Manufacturing in Tier 2 and 3 cities is seen as crucial to India's economic development. The government aims to tackle infrastructure issues, improve land availability, enhance logistics, develop workforce skills, and reduce the compliance burden on businesses to establish a thriving manufacturing ecosystem. The initiative will focus on capital-efficient and labor-intensive industries in states with low Gross State Domestic Product (GSDP), while states with higher GSDP and established manufacturing bases will prioritize R&D and high-tech industries. This regional approach ensures that states can leverage their unique strengths and address specific challenges. Key Timelines and Enablers for Growth The government has earmarked specific timelines and key enablers to support these reforms. By June 2026, states are expected to implement State Logistics Action Plans based on the LEADS (Logistics Ease Across Different States) assessment. Additionally, states are urged to streamline business processes by decriminalizing certain state laws and improving single-window systems by December 2025. In terms of industrial infrastructure, the Ministry has set a target to develop 100 plug and play industrial parks with flexible land lease policies by December 2025. States are also expected to integrate the PM Gati Shakti National Master Plan for large-scale industrial projects and upgrade the infrastructure of 1,000 Industrial Training Institutes (ITIs) to support skills development. Boosting Employment through Manufacturing By shifting manufacturing focus to Tier 2 and 3 cities, the government aims to increase the share of manufacturing in employment from the current 12% to 22% by 2047. The strategy is seen as a crucial step to create a more balanced economic ecosystem that drives employment growth and boosts industrial output across the country.

Real Estate

05 Sep 2025

Vitizen Hotels Signs Deal at Manyata Tech Park

Vikram Kamats Hospitality, as part of its ongoing expansion in key metropolitan markets, announced that its material subsidiary, Vitizen Hotels, has signed a long-term lease agreement for a 45-key hotel property at Manyata Tech Park, Bengaluru.Strategically located in the city’s prominent IT hub, the property is well-positioned to serve corporate travelers, business professionals, and long-stay guests. The addition aligns with the company’s asset-light growth model, leveraging long-term leases to expand its footprint in high-demand urban markets.The hotel is expected to strengthen the comp..

Infrastructure Transport

05 Sep 2025

CONCOR Signs MoU with BPIPL to Operate Container Terminal at Bhavnagar Port

Container Corporation of India (CONCOR) has signed a Memorandum of Understanding (MoU) with Bhavnagar Port Infrastructure (BPIPL) on September 4, 2025, in New Delhi to operate and maintain the upcoming container terminal at the northside of Bhavnagar Port, Gujarat.BPIPL had earlier entered into an agreement with the Gujarat Maritime Board (GMB) in September 2024 for the port’s development. Under this arrangement, 235 hectares of land has been leased to BPIPL for 30 years, with provision for expansion by an additional 250 hectares.The new terminal is expected to significantly enhance logistic..

Infrastructure Transport

05 Sep 2025

Concord Launches India’s First Indigenous Zero-Emission Rail Propulsion

Concord Control Systems (CCSL), a leader in embedded electronics and critical rail technologies, has announced the development of India’s first fully indigenous zero-emission propulsion system, marking a significant step toward the country’s railway electrification and net-zero goals for 2030.Powered by Lithium Iron Phosphate (LFP) batteries and featuring a DC chopper-based drive, the propulsion system eliminates idling losses common in diesel engines, offering higher efficiency, lower costs, and zero emissions.What sets this innovation apart is its completely indigenous design. Except for..