Major Policy Shift to Boost Local Manufacturing in Tier-2 Cities
The new initiative aims to create 1 million jobs by 2026 through tax incentives for MSMEs in smaller cities.
Business • REUTERS
Vikram Aditya
Bureau Chief
Mar 07, 2026 • 10:22 AM IST
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The central government announced sweeping policy changes aimed at boosting manufacturing capabilities in Tier-2 and Tier-3 cities across India. The new framework includes tax holidays for first-time manufacturers, subsidized land allocation, and streamlined regulatory approvals.
Industry experts have lauded the move, calling it a game-changer for regional economic development. The policy is expected to attract significant foreign direct investment to smaller cities that have traditionally been overlooked.
The initiative also includes provisions for skill development centers in partnership with local ITIs and engineering colleges, ensuring a steady pipeline of trained workers for the new manufacturing units.
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