UP Footwear, Leather and Non-Leather Sector Development Policy, 2025: Key incentives, eligibility

POLICY AT A GLANCE

 What is the Uttar Pradesh Footwear, Leather and Non-Leather Sector Development Policy?

The Uttar Pradesh Footwear, Leather and Non-Leather Sector Development Policy, 2025, is intended to cover the complete value chain, including leather and non-leather footwear, accessories, machinery, components, design, research, exports and allied manufacturing. It took effect from its notification date and is to remain operative for five years, subject to any earlier amendment or cancellation.

Uttar Pradesh Footwear, Leather and Non-Leather Sector Development Policy scope 

The  policy is a state incentive and industrial-development framework for attracting new investment and supporting expansion in footwear, leather and non-leather manufacturing, including: 

• Leather footwear
• Non-leather footwear made from polyurethane, ethylene vinyl acetate, rubber, synthetic materials and textiles
• Sports and woven footwear
• Footwear components and ancillary products
• Handbags, wallets, gloves, upholstery, leather garments, saddlery and travel goods
• Machinery used in footwear and leather production
• Design studios, product-development centres and research facilities
• Clusters and allied units forming part of the supply chain

A unit may qualify as a new project, expansion or diversification project. An existing enterprise must increase its gross block by at least 25 per cent through new capital investment for an expansion or diversification proposal to qualify. Diversification must involve an entirely different product rather than a variation of an existing product.

Why was the policy introduced?

• Limited availability of developed industrial land
• Need for common effluent-treatment and waste-management infrastructure
• Dependence on machinery and components sourced from outside the state
• Need for product design, research and international certification
• Skill shortages
• Environmental-compliance requirements
• Limited access to finance and modern technology among smaller enterprises.

It also seeks to expand the state’s manufacturing base beyond leather into non-leather footwear, components and production machinery.

What are the main objectives?

• Promote exports of footwear, leather and non-leather products
• Attract new domestic and foreign investment
• Support expansion of existing businesses
• Improve technology, productivity and product quality
• Create a skilled workforce
• Promote environmentally sustainable production
• Encourage international quality compliance
• Develop Uttar Pradesh as a centre for product design and innovation
• Support dedicated parks, clusters and common facilities

The government also proposes to promote up to 10 Centres of Excellence during the policy period, with no more than one centre in a district.

Key provisions of the policy

Private industrial parks

Developers are also eligible for full stamp-duty exemption. Land cost is excluded from eligible investment.

A qualifying park must contain at least five units, and no single unit may occupy more than 80 per cent of the industrial land. At least 25 per cent of the total area must be reserved for greenery and common infrastructure. Parks of 25–100 acres must ordinarily be completed within five years, while parks of at least 100 acres must be completed within six years.

Eligible park infrastructure may include internal roads, street lighting, drainage, water and sewerage networks, effluent-treatment facilities, electricity and gas distribution, communication networks, parking, firefighting systems, warehousing, testing centres, training facilities and research centres.

Land-cost grant

For standalone footwear, leather-product and machinery units, the land-cost grant is:

• 25 per cent in Paschimanchal;
• 35 per cent in Madhyanchal, Purvanchal and Bundelkhand.

For mega anchor units and clusters, it rises to:

• 75 per cent in Paschimanchal;
• 80 per cent in Madhyanchal, Purvanchal and Bundelkhand.

The grant applies only to land allotted by an Industrial Development Authority, state government entity or cluster promoted under the policy. Where a unit claims the land subsidy, the land cost cannot also be included in eligible capital investment for calculating the capital subsidy.

The cluster provisions contain an internal inconsistency. The threshold table specifies minimum investment and employment, while the accompanying notes say these thresholds do not apply to clusters. Applicants should obtain a formal clarification from the nodal agency before relying on either interpretation.

An allied unit must derive at least 50 per cent of annual turnover from a footwear or leather-product manufacturer and hold a supply contract of at least five years. Cluster units must be located on contiguous land, and a mega anchor unit is mandatory within the group.

What financial incentives are available?

An allied unit may receive 25 per cent of eligible capital investment over five years, capped at Rs 1,200 crore, with an annual ceiling of Rs 240 crore.

Stamp duty

Eligible units receive full stamp-duty exemption against a bank guarantee of an equivalent amount. The guarantee is to be released after commercial production begins. The policy also refers to full reimbursement of stamp duty. The operative mechanism should be confirmed from the relevant government order.

Employment and training

A unit employing more than 1,000 direct workers covered by the Employees’ Provident Fund may receive reimbursement equal to the employer’s contribution for five years, capped at Rs 50 crore.

Training support is 30 per cent of the course fee, capped at Rs 15,000 per trainee. The ceiling increases to Rs 20,000 for women, Scheduled Caste and Scheduled Tribe candidates and persons with disabilities. Eligible unit-led training must be certified by the Uttar Pradesh Skill Development Mission and the National Skill Development Corporation.

Power support

Units creating at least 1,000 jobs may receive a power-tariff subsidy of Rs 2 per billed kilowatt-hour for five years, capped at Rs 60 lakh per unit annually. Electricity from captive plants or open-access purchases is excluded.

Research, design and innovation

The policy provides:

Reimbursement of 70 per cent of patent, copyright, trademark and geographical-indication registration costs, capped at Rs 1 crore per unit;

• A grant of 50 per cent of the cost of a design-innovation laboratory or footwear-prototyping centre, capped at Rs 1 crore;
• Support of up to 50 per cent of project cost for a Centre of Excellence, capped at Rs 10 crore.
• A maximum of 10 Centres of Excellence may be supported during the policy period.

Sustainability incentives

Eligible units may receive:

• Reimbursement of 50 per cent of expenditure on carbon-credit certification, energy audits and renewable-energy certification, capped at Rs 50 lakh;
• A 50 per cent subsidy for biodegradable tanning agents, waterless dyeing and bio-based alternatives, capped at Rs 1 crore;
• A 75 per cent subsidy for specified international environmental certifications, capped at Rs 1 crore;
• An additional capital subsidy of 5 per cent for allied units producing plant-based, bio-fabricated or laboratory-grown leather, capped at Rs 15 crore.

The total state incentive under the policy cannot exceed 100 per cent of eligible capital investment. Assistance under Union government schemes may be combined with the policy, but benefits under other Uttar Pradesh policies cannot ordinarily be combined, except those under the prevailing state export policy.

How can an applicant access the benefits?

The Directorate of Industries is the nodal agency. The policy provides for an online portal linked with Nivesh Mitra and the state’s incentive-management system. Each applicant is to receive a unique identification number.

An evaluation committee will examine applications. Proposals involving investments of up to Rs 150 crore will be considered through an empowered committee and placed before the principal secretary of the Department of Micro, Small and Medium Enterprises and Export Promotion. Proposals above Rs 150 crore, including mega anchor units, clusters and allied units, require recommendation by a high-level empowered committee and sanction or disbursement approval from the state Cabinet.

Detailed application documents, claim deadlines and disbursement procedures were not specified fully in the policy text reviewed. Applicants should therefore consult the current implementation guidelines and portal instructions before making expenditure commitments.

Implementation and progress so far

The official policy and incentive information are available through Invest UP and MSME 1-Connect. However, no consolidated official data were identified on:

• Applications received
• Projects approved
• Industrial parks sanctioned
• Land allotted
• Incentives sanctioned or disbursed
• Investment realised
• Units commencing production
• Employment generated

The proposed Mega Leather Park in Kanpur is mentioned as a separate project in the policy context. It should not be treated as an operational achievement under this policy unless a subsequent official source confirms approval, construction or commissioning under the 2025 framework.

How does the policy support Uttar Pradesh’s wider economic strategy?

The policy links large anchor investments with clusters of suppliers, component manufacturers, machinery producers and smaller enterprises. Regional differentiation gives higher land and capital support in Madhyanchal, Purvanchal and Bundelkhand.

Its coverage of non-leather footwear and alternative materials also broadens the industry beyond traditional tanning and leather goods. Export benefits are to be accessed under the prevailing Uttar Pradesh Export Promotion Policy rather than duplicated within this policy.

Key challenges and limitations

• High entry thresholds: Standalone incentives begin at Rs 50 crore, which may exclude many existing micro and small units from the main capital-support provisions.

• Environmental compliance: Leather processing requires reliable effluent treatment, water management and compliance with pollution-control standards.

• Internal drafting inconsistency: The cluster threshold provisions require formal clarification.

• Approval complexity: Larger projects require high-level committee review and Cabinet sanction.

• Limited implementation disclosure: Project-level approvals, disbursements and outcomes were not available in the official sources reviewed.

What businesses should keep in mind

Applicants should verify:

• Project category
• Regional classification
• Minimum investment and employment thresholds
• Whether land was allotted by an eligible public agency
• Treatment of land in the capital-subsidy calculation
• Eligible investment dates
• Environmental approvals
• Whether another state incentive has been claimed
• Current implementation guidelines and government orders

Eligibility and benefits remain subject to the notified policy, subsequent amendments, applicable government orders and approval by the competent authority.

FAQs

What is the official name of the policy?

Its official title is the Uttar Pradesh Footwear, Leather and Non-Leather Sector Development Policy, 2025.

Does it cover non-leather footwear?

Yes. Synthetic, rubber, textile, sports and other specified non-leather footwear and components are included.

What is the minimum investment for a standalone unit?

The policy prescribes investment from Rs 50 crore to Rs 150 crore for standalone product and machinery units.

Are incentives higher outside western Uttar Pradesh?

Yes. Land and capital subsidies are generally higher in Madhyanchal, Purvanchal and Bundelkhand than in Paschimanchal.

Does the policy support private industrial parks?

Yes. Qualifying parks may receive 25 per cent of eligible infrastructure investment, subject to acreage-based ceilings.

Which agency processes applications?

The Directorate of Industries is the nodal agency.

How long is the policy valid?

It remains in force for five years from its notification date unless amended or cancelled earlier.

Conclusion

The policy creates a dedicated framework for footwear, leather, non-leather products, machinery, clusters and industrial parks. Its incentives are substantial, particularly for large projects outside western Uttar Pradesh, and it also covers training, design, sustainability and environmental certification.

Its practical impact will depend on the implementation guidelines, timely approvals, common environmental infrastructure and the participation of smaller suppliers around anchor projects. Official information on approvals, disbursements and operational outcomes remains a key area to monitor.

Sources

• Uttar Pradesh Footwear, Leather and Non-Leather Sector Development Policy, 2025, Department of Micro, Small and Medium Enterprises and Export Promotion, Government of Uttar Pradesh.
• Leather & Footwear Policy, 2025, Invest UP, Government of Uttar Pradesh; policy page updated June 3, 2026.
• Leather & Footwear Policy, 2025 — Incentive Details, MSME 1-Connect, Government of Uttar Pradesh.
• Policies and Government Orders, Invest UP, Government of Uttar Pradesh.