Uttarakhand

Uttarakhand is one of the fastest growing states in India thanks to the massive growth in capital investment arising from conducive industrial policy and generous tax benefits. The state is situated in the foothills of the Himalayas. The presence of several hill stations, wildlife parks, pilgrimage places and trekking routes make Uttarakhand an attractive tourist destination.

Uttarakhand, known for its rich spiritual heritage and diverse wildlife, is a prominent destination for both religious and eco-tourism in India. Its varied topography, ranging from the lush foothills and fertile plains to the snow-capped peaks of the Himalayas supports a wide spectrum of climatic zones, making it ideal for agro-horticultural activities.

At current prices, Uttarakhand's GSDP (at current prices) is estimated at Rs. 3,81,889 crore (US$ 43.21 billion) in 2025-26 and is projected to increase by 12% to Rs. 4,27,716 crore (US$ 46.49 billion) in 2026-27. From FY19 to FY26, the state's GSDP is expected to grow at a compound annual growth rate (CAGR) of 8.07%, reflecting its steady economic expansion across sectors.

The main growth drivers in the economy have been identified as hill agriculture with emphasis on horticulture including aromatic and medicinal plants (promoted by AYUSH) and tourism to improve productivity and create sustainable livelihood, especially for people in the higher reaches of the state.

The Micro, Small and Medium Enterprises (MSME) sector is cross-cutting across all other sectors, due to its employment generation potential, and is hence, extremely important in the growth strategy of the state.

Simultaneous efforts to develop two other sectors, renewable energy in the form of small hydropower and expansion of IT to all parts of the state economy will make the growth plan sustainable and strengthen its fundamentals. Uttarakhand as a state has great potential for the clean option of hydropower and the smaller and environmentally friendly hydel projects offer renewable sources of energy.

The IT sector has consolidated strengths in the state by digitising many public services, especially by provision through the Common Service Centres (CSCs) under the e-governance programme. It has also established convenient Wi-Fi services for promotion of tourism in the state and is expanding mobile & Internet connectivity throughout the state among its other achievements.

Some of the major initiatives taken by the government to promote Uttarakhand as an investment destination are:

1. Policy for Skill Development & Entrepreneurship 2018
2. Start-up Policy 2018
3. Tourism Policy 2018
4. MSME Policy-2015
5. Mega Industrial and Investment Policy 2015
6. Solar Energy Policy-2018
7. Industrial Hill Policy 2011
8. Information and Communication Technology & Electronics Policy 2016-2025
9. Policy for Harnessing Renewable Energy Sources in Uttarakhand

According to Department for Promotion of Industry and Internal Trade (DPIIT), Uttarakhand attracted FDI equity inflows worth Rs. 1,906.92 crore (US$ 242.16 million) between October 2019 and March 2026, accounting for 0.07% of India's total FDI inflows. Major items exported from Uttarakhand are Engineering Goods and Drugs and Pharmaceuticals, Electronic Goods, Plastic and Linoleum, etc.

Government Initiatives:

• Prime Minister Mr. Narendra Modi inaugurated the Rs. 12,000 crore (US$ 1.30 billion) Delhi–Dehradun Economic Corridor in April 2026. The 213-km expressway is expected to reduce travel time between Delhi and Dehradun to around 2.5 hours, boosting connectivity, tourism and economic activity in Uttarakhand.
• Prime Minister Mr. Narendra Modi inaugurated and laid the foundation stone for multiple development projects worth Rs. 8,260 crore (US$ 0.93 billion) in Uttarakhand in November 2025 the state's foundation day. The projects span infrastructure, tourism and connectivity and are aimed at strengthening the state's economic development.
• Kedarnath Ropeway Project: The Rs. 4,081 crore (US$ 0.44 billion) Sonprayag–Kedarnath Ropeway Project was approved to enhance pilgrimage connectivity. The 12.9-km ropeway will reduce travel time to Kedarnath from 8–9 hours to about 36 minutes and strengthen religious tourism infrastructure in the state.
• On October 17, 2025, the Uttarakhand government, in collaboration with the India AI Mission and the Ministry of Electronics and Information Technology, hosted the Uttarakhand AI Impact Summit 2025 as a pre-summit event to the India AI Impact Summit 2026. The summit emphasised responsible, inclusive AI growth and pledged to make world-class computing power accessible at less than a dollar an hour.
• In August 2025, the Government of India has sanctioned Rs. 547.8 crore (US$ 62.4 million) for power infrastructure modernisation in Rishikesh and Dehradun in Uttarakhand. In Rishikesh, the funds will facilitate underground cabling to enhance safety and reduce outages. In Dehradun, deployment of a Supervisory Control and Data Acquisition (SCADA) system will enable real-time grid monitoring and smarter load management. These upgrades support the state’s aim of delivering reliable, resilient and future-ready electrical services.
• For FY26, the State has been allocated Rs. 4,641 crore (US$ 528 million) for infrastructure and safety works, nearly 25 times higher than the 2009-14 annual average.
• Uttarakhand’s tourism sector is being strengthened through fiscal incentives such as the reduction of Goods and Services Tax (GST) on hotel tariffs up to Rs. 7,500 (US$ 85.07) to 5% from 12%, aimed at making travel more affordable and boosting tourist inflow to key destinations including Nainital, Mussoorie, Auli, Haridwar, Rishikesh and Chopta. The initiative benefits around 80,000 individuals employed directly and indirectly in the tourism ecosystem while also promoting linkage with cottage industries and traditional crafts to support local livelihoods.
• The Cabinet Committee on Economic Affairs (CCEA), has sanctioned the development of a 12.4 km ropeway project connecting Govindghat to Hemkund Sahib Ji in Uttarakhand. This initiative will be executed under the Design, Build, Finance, Operate, and Transfer (DBFOT) model, with a total capital investment of Rs. 2,730 crore (US$ 319.9 million).

In the State Budget FY27,

• Uttarakhand received a record railway budget allocation of Rs. 4,769 crore (US$ 0.52 billion) for 2026-27 to accelerate rail connectivity projects, including the Rishikesh–Karnaprayag rail line, station redevelopment and network modernisation across the state.
• The Uttarakhand Budget 2026-27 has allocated Rs. 2,106 crore (US$ 0.23 billion) towards capital outlay on roads and bridges. It allocated 3.2% of its expenditure on roads and bridges in 2026-27.
• A capital outlay of Rs. 1,202 crore (US$ 140.7 million) has been designated for power projects.
• Expenditure on education, sports, arts and culture is estimated at Rs. 13,201 crore (US$ 1.43 billion) in 2026-27, representing a 7% increase over the revised expenditure of Rs. 12,338 crore (US$ 1.40 billion) in 2025-26.
• Uttarakhand expenditure on health and family welfare is estimated at Rs. 4,916 crore (US$ 0.53 billion) in state budget 2026-27, registering a 1% increase over the revised expenditure of Rs. 4,862 crore (US$ 0.55 billion) in 2025-26. The budget includes an allocation of Rs. 1,452 crore (US$ 0.16 billion) for allopathic rural health services and Rs. 798 crore (US$ 0.09 billion) for allopathic urban health services.
• Expenditure on agriculture and allied activities is estimated at Rs. 6,078 crore (US$ 0.66 billion) in state budget 2026-27, marking an 18% increase over the revised expenditure of Rs. 5,158 crore (US$ 0.58 billion) in 2025-26. The budget allocates Rs. 710 crore (US$ 0.08 billion) towards the development of horticulture and vegetable crops.
• Chief Minister of Uttarakhand, Mr. Pushkar Singh Dhami inaugurated the Tanakpur-Dehradun Weekly Express Train, marking the first express service from Tanakpur to Dehradun since independence, which will enhance connectivity for important cities and provide a convenient transport option for devotees visiting Maa Purnagiri.
• The Centre has allocated Rs. 559 crore (US$ 67.01 million) for 33 infrastructure projects in Uttarakhand, including funds for a tunnel parking facility at Kempty Fall, an inter-state bus terminal in Herbertpur, and health infrastructure improvements at Haridwar Medical College, as part of the 'Scheme for special assistance to states for capital investment 2023-24’.
• The Central government has approved Rs. 1,100 crore (US$ 131.86 million) under the National Health Mission to enhance healthcare infrastructure in Uttarakhand, including the construction of new hospitals, medical facilities, and maternal health initiatives over the next two years.

Uttarakhand is steadily shaping its identity as a high potential growth hub supported by a strong policy framework, rising capital investments and continued focus on sectors that align with its natural strengths. The state’s efforts to expand tourism, upgrade infrastructure, promote clean energy, strengthen digital services and empower its MSME base are creating a more resilient and inclusive economic environment. With sustained government commitment, targeted reforms and growing investor confidence, Uttarakhand is well positioned to accelerate its development journey and emerge as a competitive destination for business, innovation and sustainable livelihoods in the years ahead.