India's INR 33,660 Crore BHAVYA Scheme to Accelerate Industrial Park Development and Manufacturing Expansion

June 11, 2026

On June 1, 2026, the application window opened for the first round of the BHAVYA Scheme, the largest centrally funded industrial park development programme in India since the establishment of the National Industrial Corridor Development Corporation. States, state industrial development corporations, and eligible SPVs have until July 31, 2026, to submit proposals for the first tranche of 20 industrial parks.

A second application round will run from August 1 to September 30, completing the selection of up to 50 parks under Phase 1. The BHAVYA Scheme (Bharat Audyogik Vikas Yojna) was approved by the Union Cabinet on March 18, 2026, with an outlay of Rs 33,660 crore to develop 100 industrial parks over six years, from 2026-27 to 2031-32. DPIIT issued the operational guidelines on May 23, 2026.

The programme comes at a time when India's manufacturing sector is expanding rapidly. FDI increased 15% year-on-year to USD18.6 billion in Q1 FY2025-26, while PLI schemes have generated investment commitments of approximately INR 2 lakh crore. Semiconductor fabs, EV gigafactories, steel plants, and pharmaceutical clusters are all competing for industrial land simultaneously. BHAVYA is the government's supply-side response to this unprecedented industrial investment cycle, and states must now compete to secure a share of the programme.

What BHAVYA Is, and Why the Design Matters More Than the Headline Number

The INR 33,660 crore BHAVYA Scheme is more than a funding programme for industrial park development in India. Financial support is provided as equity to Special Purpose Vehicles (SPVs) and is linked to two factors: the value of land contributed by the state or implementing agency and the achievement of defined project milestones. Eligible projects can receive support of up to INR 1 crore per acre. This milestone-based structure is designed to support investment-ready projects rather than provide unconditional grants.

The SPV is responsible for the full project lifecycle, including planning, infrastructure creation, investor facilitation, and long-term operations. The National Industrial Corridor Development Corporation (NICDC) serves as the Project Management Agency, overseeing project evaluation, monitoring, and implementation. This framework is intended to strengthen accountability within the industrial development scheme in India.

Project selection under the BHAVYA Scheme application process for industrial parks in India is competitive. Proposals are evaluated on connectivity, site suitability, infrastructure quality, digital governance, and sustainability. The objective is to create high-quality plug-and-play industrial parks and strengthen industrial infrastructure in India to support future manufacturing expansion in India and large-scale greenfield manufacturing projects.

The Plug-and-Play Standard: What Investment-Ready Actually Means

The concept of plug-and-play industrial parks has existed in Indian industrial policy for years, but the BHAVYA Scheme gives it a defined implementation framework. Selected parks must provide ready infrastructure, including roads, power substations, water supply, effluent treatment systems, broadband connectivity, digital management platforms, and underground utility corridors. Green-energy integration and alignment with PM GatiShakti connectivity principles are also mandatory requirements.

For companies planning factory setup in India, this approach addresses one of the biggest causes of project delays: utility infrastructure readiness. Under BHAVYA, essential services such as power, water, and connectivity must be in place before plots are marketed to investors. This strengthens industrial infrastructure in India and reduces execution risks for greenfield manufacturing projects.

The scheme also introduces stronger financial accountability. Funding is linked to project milestones, meaning parks that fail to deliver infrastructure commitments cannot access further central support. This milestone-based model is designed to improve the quality and reliability of industrial park development in India.

The Geography: Minimum 100 Acres, Upto 1,000 Acres, and the Northeast Provision

The BHAVYA Scheme has been designed to accommodate different regional realities. For most states, eligible projects require a minimum of 100 contiguous acres, with parks up to 1,000 acres qualifying for support. Connected land parcels may also qualify if they meet specified size and proximity requirements. For hilly states, northeastern states, union territories, and smaller states, the minimum requirement is reduced to 25 acres, making the scheme more accessible to regions with geographical constraints.

This flexible approach supports broader industrial park development in India and encourages participation from states that have historically attracted limited industrial investment. Regions such as Sikkim, Meghalaya, Manipur, and the Andaman Islands can now compete for funding under the scheme despite having smaller land parcels available for development.

The design also aligns with ongoing efforts to drive manufacturing expansion in India beyond traditional industrial hubs. Combined with initiatives in food processing, textiles, and other sectors, the scheme creates new industrial investment opportunities in India and expands access to modern industrial infrastructure in India across emerging manufacturing regions.

The Industrial Investment Implications: What This Means for Manufacturers and Developers

For manufacturers evaluating factory setup in India, the BHAVYA Scheme materially changes the supply side of the industrial land and infrastructure equation. The current bottleneck to manufacturing expansion in India is often not capital availability or regulatory approvals, but the shortage of genuine plug-and-play manufacturing infrastructure in India sites.

Manufacturers have historically faced delays of 1–2 years waiting for power connections, water supply, road upgrades, and effluent-treatment infrastructure after acquiring land. BHAVYA's infrastructure-first model is designed to eliminate this problem by ensuring that core utilities and industrial infrastructure are in place before manufacturers arrive.

For industrial park developers, state governments, and investors pursuing industrial investment opportunities in India, the scheme creates an immediate planning imperative. The first application window, running from June 1 to July 31, is a short timeframe to prepare proposals that meet NICDC's evaluation criteria, including land availability, connectivity, infrastructure planning, SPV formation, and financial projections.

States that have already developed industrial park concepts under AMRUT 2.0, the National Industrial Corridor Programme, or state-level industrial policies now have a central funding mechanism to accelerate those projects. While the second application round provides another opportunity, the competitive nature of the scheme means that well-prepared states are likely to secure the strongest locations and funding allocations in the first round.

The broader investment context is equally significant. The BHAVYA Scheme arrives alongside major industrial investments, including JSW Steel's INR 65,000 crore Paradip greenfield project, NTPC's nuclear feasibility studies across 14 states, the JSW–MG Motor battery and EV complex in Odisha, and continued PLI-driven manufacturing expansion in India across 14 sectors.

Together, these initiatives reflect a shift toward large-scale industrial infrastructure in India development supported by milestone-based funding, competitive project selection, and stronger institutional execution. BHAVYA is the latest expression of this strategy, and the states and developers that prepare the strongest proposals will help shape India's next phase of industrial growth.

The BHAVYA application window opened today. The states and developers who understand what investment-ready actually means, and can prove it in two months, will anchor India's manufacturing geography for the next decade.

About IMARC Engineering

IMARC Engineering is an end-to-end EPCM and industrial park set up consulting firm supporting industrial park developers, state governments, SPVs, and manufacturing investors with master planning, feasibility studies for industrial park, DPR preparation, site selection, infrastructure design, utility systems engineering, factory setup planning, procurement management, construction supervision, and commissioning for greenfield and brownfield industrial parks and manufacturing facilities across India.

With deep expertise in industrial park development and manufacturing plant setup, backed by IMARC Group's market intelligence, IMARC Engineering helps states, SPVs, and private developers design and deliver BHAVYA-eligible, investment-ready industrial infrastructure that attracts manufacturers, passes competitive selection, and delivers on its employment and investment commitments from Day 1.