India is going through a technological revolution. As the country transitions into the digital era, industrial smart cities have become an essential driver of economic growth, urban development and industrial transformation. These cities not only integrate technology into urban and public services, they also revolutionise industries by combining modern infrastructure with innovative technology. By leveraging digital solutions in sectors like manufacturing, logistics, and energy, industrial smart cities are poised to become powerful catalysts for job creation and investment growth. What is an industrial smart city? An industrial smart city is an urban city where technology and innovation drive industrial activity. These cities rely on digital infrastructure, automation, Artificial Intelligence (AI), the Internet of Things (IoT), and emerging technology to enhance efficiency, productivity and sustainability. Unlike conventional smart cities that focus on improving citizen services, industrial smart cities focus on building an ecosystem that attracts industries, fosters innovation and creates opportunities for businesses and the working class.
In India, the development of industrial smart cities is part of the broad “Make in India” and “Digital India” initiatives, which aim to position the country as a global hub for manufacturing, innovation and investment. The vision is to create world-class industrial zones that provide advanced infrastructure, efficient logistics and digital services to industries, helping them compete globally.
Current landscape of industrial smart cities
The Indian government merged the development of smart cities with industrial corridors to create job opportunities outside metro areas. The goal is to boost manufacturing infrastructure, build connectivity, reduce logistical costs, create jobs, regional development, and prevent urban overcrowding. The government will build tech driven hubs with improved connectivity, offering technologically driven solutions.
- On-going projects
The first phase of India's mega project, the Delhi-Mumbai Industrial Corridor (DMIC), which aims to develop eight industrial smart cities between Delhi and Mumbai, is currently underway. This is one of the largest infrastructure projects estimated to cost US$ 90 billion. DMIC is India’s priority project as it is linked to the country’s long-term strategy of Viksit Bharat 2047. This project incorporates nine mega industrial zones of 200-250 sq. km, high-speed freight lines, three ports, six airports, a six-lane intersection-free expressway connecting the country's political and financial capitals and a 4,000 MW power plant. Industrial estates, clusters and hubs, with top-line infrastructure will be developed along this corridor to attract foreign investment.
The cities to be developed from scratch under this program are Dholera (Gujarat), Shendra-Bidkin (Maharashtra), Greater Noida (Uttar Pradesh), Ujjain (Madhya Pradesh), Manesar (Haryana), Khushkhera-Bhiwadi-Neemrana (Rajasthan), Ahmedabad-Dholera (Gujarat) and Pithampur-Dhar-Mhow (Madhya Pradesh). These projects will be developed in stages and are estimated to be completed by 2040.
Additionally, the government has approved the development of 12 new industrial smart cities under the National Industrial Corridor Development Programme (NICDP). This programme aims to create up to one million direct and three million indirect jobs, further improving balanced regional development and improving infrastructure across states. These industrial cities will be built across six major corridors in 10 states. This will bring the total number of industrial cities in India to 20, including the eight that are currently in progress.
- Investment scenario
The investment required for developing industrial cities is significant. Therefore, they are funded by the central, state, as well as international governments. The biggest Indian mega project, the Delhi-Mumbai Industrial Corridor (DMIC) is a joint venture between India and Japan. This US$ 90 billion project will be built with technical and financial aid from Japan. The newly approved 12 industrial projects have had approximate investment of Rs. 28,602 crores (US$ 3.41 billion).
- Smart Cities Mission (SCM)
To enhance economic growth, the government launched the “Smart Cities Mission” (SCM) concept in 2015 aiming to upgrade existing and create new cities. This project aims to support the increasing urban population, upgrade infrastructure, generate jobs and enhance living standards using data and technology in 100 selected cities. The mission focuses on sustainability, citizen participation in governance, and ensuring safe and smart cities.
More than 8,000 multi-sectoral projects are being developed by these 100 cities, amounting to Rs. 1.6 lakh crore (US$ 19.06 billion). More than 90% of the total projects, i.e. 7,244 projects amounting to Rs. 1,45,312 crore (US$ 17.31 billion), undertaken under the SCM have been completed. Financially, the total outlay of central assistance for the SCM was Rs. 48,000 crore (US$ 5.72 billion). As of September 2024, the Central Government has already released Rs. 46,787 crore (US$ 5.57 billion) to 100 smart cities under the SCM, of which over 90% has been used.
Job creation in industrial smart cities
Out of the several objectives, one of the objective of industrial smart cities is to generate employment. Although automation and technology could displace jobs, the reality is complex. These cities are designed not just to automate processes but to create opportunities in high-tech industries, manufacturing, logistics and ancillary services. Below are factors that contribute to job creation:
- Demand for skilled workers
India’s workforce is rapidly evolving; industrial smart cities will accelerate the demand for workers with specialised skills in AI, robotics, data analytics and other advanced technology. As industries adopt automation and digital solutions, workers will be needed to design, implement and maintain these systems. This will lead to a growing demand for engineers, IT specialists, technicians and data scientists, creating millions of new job opportunities in the coming years.
The Indian government has already recognised this need and invested in skill development programs through initiatives like Skill India. Vocational training centres and educational institutions are increasingly aligning their curriculum with the needs of modern industries. As industrial smart cities develop, they will serve as centres for skill development, allowing the workforce to upskill and prepare for new opportunities.
- Growth of emerging industries
Industrial smart cities will attract a range of industries, particularly those aligned with emerging sectors such as clean energy, biotechnology, advanced manufacturing and digital services. These industries not only create jobs in production and operations but also in research and development (R&D), marketing, sales and management.
For example, smart cities like Dholera in Gujarat attract industries dealing with renewable energy, defence manufacturing, and aerospace. As these sectors grow, they generate direct and indirect jobs. Engineers, scientists and skilled technicians are in demand to run these industries, while sectors like logistics, transportation and services also benefit from the industrial activity.
- Infrastructure and construction jobs
The development of industrial smart cities requires massive investment in infrastructure. From roads and bridges to smart power grids, transportation hubs and industrial zones, the construction phase itself is a significant employment source. India’s growing population and urbanisation further increase the need for housing, utilities and transportation networks within these cities, creating jobs in construction, civil engineering, project management and real estate development.
For example, the DMIC, a massive infrastructure project spread through six states, is expected to create millions of constructions and industrial jobs. With smart city projects planned along the corridor, the construction of smart industrial zones, housing, logistics hubs, and smart grids will generate employment for unskilled and semi-skilled labourers and boost India’s infrastructural capabilities.
Conclusion
The development of industrial smart cities represents a transformative initiative that uses technology and infrastructure to boost job creation, enhance economic growth and improve living standards. These projects, particularly the DMIC, aim to decentralise economic hubs from metro areas, promote balanced regional development and attract foreign investment. These projects, while having a long-term vision, have the potential to heighten India's trajectory. Once fully developed, they will help slow the migration of people from tier 1 and 2 cities or smaller towns to overcrowded metros. The GDP contribution of various states will gradually increase, bringing more regions at par with the traditionally dominant ones. However, success will depend on strategic planning and timely execution.
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Quelle/Source: IBEF, 05.04.2025
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