UP surpasses Delhi, becomes India’s second most preferred business destination: Reports

Uttar Pradesh (UP) has become India’s second-most preferred destination for new business incorporations, surpassing Delhi and trailing only Maharashtra. Between April 2024 and January 2025, UP registered 15,590 new companies, compared to Delhi’s 12,759 and Maharashtra’s 21,000, according to data from the Ministry of Corporate Affairs. This surge in company registrations highlights the state’s growing role in India’s industrial landscape.

As of January 2025, UP had 1,50,703 active companies, overtaking states like West Bengal, Tamil Nadu, and Karnataka in the past five years. While Maharashtra (3,46,555) and Delhi (2,50,162) still lead in total operational firms, UP’s rapid expansion in new business formations signals a shift in corporate activity. The state’s GDP growth has ranged between 7.5% and 11.4% since 2021-22, exceeding the national average.

Government initiatives, financial incentives, and policy reforms have played a key role in attracting businesses to UP. The state has rolled out sector-specific policies benefiting industries such as food processing, electronics, IT, pharmaceuticals, tourism, and handlooms. "Uttar Pradesh has rolled out sector-specific policies and financial incentives for businesses, including MSMEs and startups," said Manmeet Kaur, Partner at Karanjawala & Co. The improved ease of doing business, along with a 55-56% working-age population and a large consumer base of over 240 million, has further boosted investor confidence.

UP has also strengthened its presence in emerging industries. The state contributes 40% of India’s mobile handset production and 55% of mobile components, ranking sixth in software exports. Additionally, over 14,000 startups now operate in UP, supported by state-backed incentives. The lower cost of real estate in Noida, compared to Delhi, has made it an attractive business hub for investors.

With its rising business activity, UP continues to attract investments across multiple sectors. While Maharashtra remains the top destination for company incorporations, UP’s increasing registrations indicate its growing importance in India’s economic landscape.