Last updated: Sep, 2023
Introduction
Himachal Pradesh is located in the northern region of India. The state is surrounded by Jammu and Kashmir on the north, Punjab on the west and the south-west, Haryana on the south, Uttar Pradesh on the south-east, and China on the east.
At current prices, Himachal Pradesh’s gross state domestic product (GSDP) is estimated to be Rs. 2.14 trillion (US$ 25.92 billion) in 2023-24.The state’s GSDP (in Rs.) increased at a CAGR of 8.16% between 2015-16 and 2023-24.
Total exports from Himachal Pradesh stood at US$ 2,147.46 million in FY22, and US$ 909.47 million in FY23 (until August 2022).
As of April 2023, Himachal Pradesh had a total installed power generation capacity of 4,489.90 MW, comprising 2,030.19 MW under private utilities, 1,062.21 MW (state utilities) and 1,397.50 MW (central utilities). Himachal Pradesh has immense potential for hydropower as it is naturally blessed with abundant streams and rivers flowing down from towering mountains.
The State Government of Himachal Pradesh offers a wide range of policy and fiscal incentives for businesses under the Industrial Policy, 2017. The state has also undertaken other policies such as Tourism Policy 2005 and IT Policy 2001 for upgradation of these sectors in the state. Himachal Pradesh has announced a Revised Solar Policy 2016, under which it plans to establish 700 MW of solar photovoltaic cell capacity.
Himachal Pradesh will have the world’s longest and highest tunnel by 2025, which will connect Zanskar Valley in Ladakh to Lahaul in Himachal Pradesh, and will be 4.25 km in length.
According to the Department for Promotion of Industry and Internal Trade (DPIIT), the cumulative FDI inflows in Himachal Pradesh were valued at US$ 194.86 million between October 2019-March 2023.
Key Sectors
- In October 2022, Prime Minister Mr. Narendra Modi flagged the new Vande Bharat Express from Amb Andaura, Una to New Delhi.
- In October 2022, Prime Minister Mr. Narendra Modi laid the foundation stone of two hydropower projects in Chamba, Himachal Pradesh - the 48 MW Chanju-III Hydro-electric Project and the 30 MW Deothal Chanju Hydro-electric Project. Combined, these will generate 270 million units of electricity yearly.
- In October 2022, Prime Minister Mr. Narendra Modi laid the foundation stone of the Bulk Drug Park at Haroli in Una district, which will be built at a cost of Rs. 1,900 crore (US$ 231.35 million) and provide employment to more than 20,000 people.
- In September 2022, in accordance with the National Education Policy, the Himachal Pradesh Cabinet approved the Himachal Pradesh Early Childhood Care and Education Tutor Scheme-2022 for children in government primary schools between the ages of 3 and 6.
- In July 2021, Sonalika Group invested Rs. 200 crores (US$ 26.93 million) in Himachal Pradesh to build India's largest harvester manufacturing facility.
- Amidst the current rabi season in June 2021, Himachal Pradesh procured a record 1,00,657 quintals of wheat.
- Agriculture is the main occupation and the major source of employment in the state, as 89.96% of the population lives in rural areas. With suitable agro-climatic conditions, Himachal Pradesh has realised the importance of commercial crops, including off-season vegetables, potatoes and ginger. To increase production of foodgrains, emphasis has been laid on distribution of seeds of high-yielding varieties to the farmers. During 2020-21, 1,340 hectares of additional area was envisaged to bring under fruit plants, against which 2,589 hectares of area has already been brought under plantation.
- In March 2022, the Central Government approved Rs. 108 crore (US$ 13.95 million) for the Integrated Digital Agriculture Platform in Himachal Pradesh, which will increase in-house capability in supplying farmers with information and communication technologies (ICT)-based services, saving administrative time and enhancing efficiency.
- Himachal Pradesh is one of the fastest-growing regions in the pharmaceutical industry in India, driven by incentives announced by the state Government in its Industrial Policy, 2004. In FY22, drug formulations and biologicals exports from Himachal Pradesh stood at US$ 975.08 million, which accounted for 45.4% of the total exports.
- The tourism sector of Himachal Pradesh contributes 7% to the state GDP. Domestic tourist inflow in the state reached 5.63 million in 2021, while foreign tourist arrivals reached 4,932. As of December 2019, there were 3,679 registered hotels in the state.
- In September 2022, the central government sanctioned the Urban Transport Ropeway Project worth Rs. 1,546.4 crore (US$ 187.92 million) for Shimla in Himachal Pradesh.
- In April 2022, the Ministry of Civil Aviation and the Himachal Pradesh government signed an MoU (Memorandum of Understanding) for the development of a Greenfield Airport in Nagchala, located in the district of Mandi in Himachal Pradesh. The project is estimated to cost around Rs. 900 crore (US$ 116.24 million), excluding the cost of land.
- In April 2022, National Highways Logistics Management Limited (NHLML) and the Himachal Pradesh government signed a memorandum of understanding (MoU) on for seven ropeway projects in the state under the Parvatmala Yojna at a total cost of Rs. 3,232 crore (US$ 417.44 million). The project will cover a total length of 57.1 km.
