Plug and Play Industrial Shed Policy (DBFOT Model), 2026

Need and Importance

The proposed Plug-and-Play Industrial Sheds Scheme under PPP (DBFOT) addresses a structural constraint in Uttar Pradesh’s industrial development, where MSMEs— forming the bulk of industrial units—face high upfront land and construction costs and long gestation periods under the prevailing “lease and build” model.

This results in delayed production, under utilisation of industrial land, and slower employment generation despite significant land availability. By shifting to a “rent and operate” model with ready-built industrial sheds and integrated utilities, the Scheme lowers entry barriers, enables quicker operationalisation of units, improves ease of doing business, and directly supports the State’s objective of accelerating industrial growth and achieving a USD 1 Trillion GSDP.

Key Provisions of the Scheme

The Scheme shall be implemented through a DBFOT Public–Private Partnership framework, with land ownership retained by the concerned Industrial Development Authority throughout the concession period.

The private Concessionaire will be responsible for design, finance, construction, operation and maintenance of plug-and-play industrial sheds and common infrastructure, and for sub-leasing units to eligible industries.

Target sectors / Industries include the following –

Primary focus: MSMEs and light-to-medium manufacturing

Target sectors include:

• Light engineering & fabrication
• Electronics & electricals
• EV components & auto ancillaries
• Textiles & garments
• Food processing & agro-based industries
• Plastics & packaging
• Defence, aerospace, ESDM
• Provision for sector-specific clusters in specialised industrial parks

Key provisions include the following

• Long-term concession period (45 years, extendable upto 15years based on performance)
• Minimum land size : 10 acres and preferred land size for pilots : 15–20 acres
• Clearly defined Minimum Development Obligations to ensure time-bound creation of built-up space (~50% built-up area in 2–3 years and 100% built-up area in 3–5 years)
• Safeguards against land hoarding including provisions for penalties on delay (0.1% per day of performance security), performance guarantee of 5% of total project cost

Financial provisions include the following –

• Upfront land premium (minimum 5-10% of prevailing land value), fixed annual concession fee (Typically ≥2% of land value, with escalation)
• Competitively bid revenue share (Base revenue share + quoted premium and H1 bidder selected)
• Supported by escrow mechanisms, performance security, independent engineering oversight, and multi-layer audits.
• All project assets, including buildings and infrastructure, will revert to the Authority free of encumbrances at the end of the concession.

Expected Economic Impact and Key Outcomes

• The Scheme is expected to significantly accelerate industrial operationalisation, enabling faster conversion of vacant and under utilised land into productive assets. Key outcomes include early employment generation, enhanced MSME growth and formalisation, development of local supply chains, improved industrial land productivity, and strengthened competitiveness of Uttar Pradesh as a manufacturing destination.
• Over the long term, the Scheme will contribute to sustained GSDP growth while generating stable, predictable revenues for Industrial Development Authorities without fiscal burden on the State.
• The DBFOT framework offers an attractive platform for private sector participation, with potential investor interest from industrial park developers, real estate and logistics players, infrastructure funds, and long term institutional investors seeking stable, rental yield assets.
• Long concession periods, assured demand from MSMEs, transparent revenue sharing mechanisms, and public land backing provide a balanced risk return profile and encourage credible private investment in industrial infrastructure.