Yogi govt's excise policy 2025 spurs major investments in Uttar Pradesh

UP CM Yogi Adityanath

Uttar Pradesh’s excise policy for 2025 has delivered a strong boost to the state’s revenue system and positioned the state as a national leader in ethanol production. The steady rise in industrial investment, rapid expansion in ethanol output and widening market demand indicate that the state economy is entering a new phase of growth driven by manufacturing and allied rural activities.

Official data shows that Uttar Pradesh has produced 182 crore litres of ethanol till November 2025, the highest in its history. “This record output has been achieved due to structural reforms in the excise sector, smoother procedures for industrial clearances and greater adoption of modern technology across distilleries and bottling units. The state’s renewed focus on creating a business-friendly environment has enabled liquor, beer, wine and alcohol-based industries to scale up operations significantly,” Excise Minister Nitin Agarwal said.

Out of the total ethanol produced, 105.25 crore litres were sold within Uttar Pradesh while 40.96 crore litres were supplied to other states. This makes Uttar Pradesh one of the most dependable ethanol supply centres in India.

Mukesh Singh, Vice-President of Assocham UP, told Moneycontrol that the growth of the excise and ethanol sector is not limited to boosting industrial output but is also reinforcing the entire rural supply chain. He explained that sugarcane and grain-based distilleries, which form the backbone of ethanol production in Uttar Pradesh, directly support thousands of farmers who supply raw materials throughout the year. As production capacities grow, farmers receive a more assured market for their crops, quicker payment cycles and better price realisation.

The excise sector continues to attract strong interest from major corporate houses as well as medium-scale industries. Uttar Pradesh Excise Commissioner Dr Adarsh Singh said that under the Invest UP programme, a total of 125 agreements have been signed involving investment proposals worth Rs 30,735 crore. He said that land allocation has already been completed for 43 ready-to-launch projects that will together bring in investments of Rs 6,898.88 crore.

At present, 19 projects under Invest UP are fully operational and have collectively attracted more than Rs 2,900 crore in investments. These operational units have generated over 4,800 jobs. Outside the MoU framework, 28 excise-related projects are also active, bringing in an additional investment of Rs 2,752 crore. Officials say the steady launch of new units reflects growing investor confidence and contributes to the broader economic momentum across districts.

Excise Minister Nitin Agarwal said that the new excise policy introduced by the Yogi Adityanath government has helped draw investors to Uttar Pradesh and has given a fresh push to the state’s industrial base. He said that the government is working on new schemes to attract future investments in sectors such as bottling operations, new distilleries and bio-ethanol production. According to the minister, the sector has already created more than 25,000 direct and indirect employment opportunities.

He said the state is now linking industrial expansion with job creation so that young people can find better employment opportunities within Uttar Pradesh rather than migrating to other states. The minister explained that special steps have been taken to make the excise sector more appealing to investors. Under the new distillery policy, investors receive concessions on land, electricity and several categories of taxes. The introduction of an e-licensing system has made permit issuance faster, simpler and more transparent. The state is also encouraging units involved in bio-ethanol production in line with India’s green energy targets. Special incentives have been created for MSMEs to help them upgrade their technology and expand operations.

On future investments, the excise minister said that after December 2025, the government has already received investment proposals worth more than Rs 3,328 crore. These proposals include new projects in Gorakhpur, Mathura, Sambhal, Unnao, Ghaziabad, Muzaffarnagar, Purvanchal and several other districts. He added that new units would soon be established across multiple regions, which will boost state revenue and strengthen local economies through fresh job creation.

Officials say the rising excise revenue is playing a major role in Uttar Pradesh’s goal of becoming a one trillion dollar economy. The expanding ethanol production base is also supporting national energy priorities by reducing reliance on fossil fuels and encouraging a shift towards cleaner alternatives.

Mukesh Singh of Assocham said the rise of new distilleries has led to increased demand for agricultural produce in districts where sugarcane, maize and broken rice are cultivated in large quantities. This has encouraged farmers to expand cultivation and invest in better inputs, which in turn has strengthened allied sectors such as transportation, warehousing, machine repair units and agro-processing centres.

He added that the rural economy benefits from the employment created by these units, from plant operations to logistics and ancillary services. With more factories coming up in smaller towns, local youth are finding job opportunities closer to home, curbing migration to big cities. According to Singh, this cycle of industrial growth supported by agriculture-based supply chains is helping create a more stable and resilient economic model across rural Uttar Pradesh.