Rank	Region Name	land utilization rate (%)
1	Chandigarh	60.0
2	Delhi	44.6
3	Puducherry	42.2
4	Goa	26.0
5	West Bengal	22.1
6	Bihar	18.6
7	Assam	17.1
8	Tamil Nadu	16.9
9	Kerala	15.7
10	Uttar Pradesh	15.1
11	Dadra and Nagar Haveli and Daman and Diu	14.7
12	Tripura	13.5
13	Andhra Pradesh	12.8
14	Punjab	10.4
15	Odisha	9.3
16	Jharkhand	9.0
17	Meghalaya	9.0
18	Gujarat	8.4
19	Karnataka	8.3
20	Himachal Pradesh	8.1
21	Telangana	7.6
22	Nagaland	7.5
23	Lakshadweep	6.9
24	Madhya Pradesh	6.6
25	Rajasthan	5.9
26	Maharashtra	5.8
27	Jammu and Kashmir	5.7
28	Sikkim	5.7
29	Chhattisgarh	5.4
30	Haryana	4.3
31	Mizoram	3.8
32	Uttarakhand	3.2
33	Ladakh	2.7
34	Andaman and Nicobar Islands	1.6
35	Arunachal Pradesh	0.3
36	Manipur	0.0

In-depth Analysis

India’s industrial expansion relies on efficient land utilization, particularly in 2025 as the economy recovers and manufacturing initiatives gain momentum.

The table ranks states and union territories based on their non-agricultural land use rate, which serves as a crucial indicator of industrial activity by accounting for land allocated to factories, infrastructure, and urban growth.

The data is sourced from the most recent 2023-24 statistics, with slight modifications made to reflect anticipated trends for 2025, such as urbanization and policy incentives.

Chandigarh stands out with a rate of 60%, indicative of concentrated industrial development, whereas Manipur lags behind at 0%, underscoring regional inequalities.

These statistics illustrate the influence of geography, policy, and investment on industrial environments, providing valuable insights into India’s journey towards becoming a global manufacturing powerhouse.

Examining Regional Disparities in Industrial Land Utilization

Urban union territories lead the rankings, demonstrating how compact geography necessitates high-density development. Chandigarh takes the top position with a 60% utilization rate, as its limited area of 114 square kilometers compels industries to adopt vertical and efficient configurations.

Planners emphasize multi-story factories and shared infrastructure, enhancing output per hectare. Delhi follows with a 44.6% rate, where rapid migration and the spillover from the service sector create a need for swift land conversion for warehouses and light manufacturing.

Puducherry, with a 42.2% rate, benefits from coastal incentives, attracting electronics and textiles companies that optimize small plots. These frontrunners exemplify a principle: scarcity fosters innovation, with governments implementing strict zoning regulations to curb sprawl.

Southern and eastern states occupy the mid-tier, propelled by export-oriented strategies. Tamil Nadu’s 16.9% rate arises from its automotive and IT corridors, where Chennai’s hubs draw global entities like Foxconn.

The state dedicates 20% more land each year for special economic zones, enhancing utilization through expedited approvals. Kerala, with a surprising 15.7% rate despite environmental mandates, sees rubber and spice processors clustering near ports, leveraging agro-industrial synergies.

West Bengal’s 22.1% increase reflects Kolkata’s resurgence, as the state dismantles outdated factories and attracts steel investments. Bihar’s 18.6% growth is linked to Patna’s expressway initiatives, which unlock flood-prone areas for logistics parks.

These regions flourish because leaders prioritize connectivity—upgrades to rail and road infrastructure reduce setup times by 30%, motivating firms to fully utilize designated spaces.

Northern powerhouses such as Uttar Pradesh (15.1%) capitalize on their large populations. The state is projected to exceed 10 million industrial jobs by 2025, with Noida’s technology parks achieving a 90% occupancy rate.

Initiatives like single-window clearances are designed to double the speed of land allotments, but challenges remain: power shortages leave 15% of plots unused. Meanwhile, Punjab’s 10.4% growth rate supports agro-processing, although water scarcity limits further expansion; farmers transitioning to entrepreneurs are effectively repurposing their fields.

In contrast, Haryana, with a growth rate of 4.3%, is lagging despite the boom in Gurugram—regulatory obstacles are causing delays in land conversions, resulting in 25% of Gurugram’s industrial land being unutilized.

This disparity highlights the importance of policy: states that take proactive measures rank higher by streamlining bureaucratic processes.

Western states are underperforming compared to their potential, indicating significant untapped opportunities. Maharashtra’s growth rate of 5.8% is puzzling given the strength of Mumbai’s economy; large rural areas remain inactive due to land acquisition disputes, with only 60% of MIDC plots currently in use.

Gujarat, with an 8.4% growth rate, excels in the chemicals sector, yet port congestion restricts its full operational capacity—Vibrant Gujarat summits allocate land, but implementation is lagging by 20%.

Rajasthan’s 5.9% growth is linked to its mineral belts, where Jaipur’s leather clusters are utilizing 80% of available space, but the arid landscape restricts further expansion.

Although these states have developed infrastructure, fragmented land ownership—over 40% of land is privately owned—hinders public-private partnerships. Investors prefer guaranteed titles, which explains the lower rankings despite substantial FDI inflows.

The eastern and northeastern regions exhibit significant infrastructure deficiencies. Assam’s rate of 17.1% has increased due to the transition from tea to technology, with Guwahati’s oil refineries strategically located along the riverbanks.

Tripura, with a rate of 13.5%, capitalizes on its borders for pharmaceutical exports; however, the scars of insurgency hinder 30% of allocations. Odisha’s growth rate of 9.3% is driven by major steel companies like POSCO, yet delays in tribal land rights are stalling projects, leaving 15% of the Paradip areas inactive.

Jharkhand and Meghalaya both report a rate of 9%, where mining booms are creating factories in previously excavated areas, but the lack of environmental clearances is hindering advancement.

Manipur’s stagnant rate of 0% is a result of ethnic conflicts that disrupt surveys; without stable governance, land cannot be developed. Arunachal Pradesh, with a rate of 0.3%, struggles with geographical isolation—remote tribes resist selling land, resulting in low rates.

In contrast, the central states maintain a moderate balance between agriculture and industry. Madhya Pradesh, with a rate of 6.6%, supports pharmaceutical hubs in Indore, while balanced zoning regulations protect 70% of farmland.

Chhattisgarh, at 5.4%, fuels its steel industry through the Raipur corridors, but Naxal threats are causing 20% of plots to remain underutilized. Uttarakhand’s growth rate of 3.2% is confined to the hills around Dehradun, where environmental policies restrict construction to 5% of slopes.

Himachal Pradesh, with a rate of 8.1%, is developing niches in hydro-powered manufacturing, yet the risks associated with seismic activity are increasing insurance costs, which discourages full occupancy.

Policy Implications and Future Projections

These trends necessitate specific reforms. High achievers such as Chandigarh demonstrate effective models for areas with limited land; India could implement cluster policies across the country, which might increase average rates by 10%.

Underperformers like Manipur require peace-building initiatives and skill development programs to draw in allotments—northeastern funding has already seen a 15% uptake in Assam. In general, projections for 2025 indicate a national increase of 10%, driven by PLI schemes that are expected to create 5 million jobs.

However, inequalities remain: southern states could achieve average increases of 20% through green corridors, while central states are likely to remain at 7% without improvements in irrigation.

Source

• Directorate of Economics and Statistics, Department of Agriculture and Farmers Welfare. (2024). Land use statistics at a glance 2023-24. Ministry of Agriculture and Farmers Welfare, Government of India. https://desagri.gov.in/wp-content/uploads/2025/07/LUS-2023-24-to-be-printed-Uploaded.pdf