CCEA Approves Zaheerabad Industrial Smart City Under National Industrial Corridor Programme

What was decided

The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi on Wednesday approved a project to establish an Industrial Smart City at Zaheerabad in Sangareddy district. The project has been proposed as part of the 12 Industrial Smart Cities which will be established as part of the National Industrial Corridor Development Programme (NICDP) with an estimated investment of Rs 28,602 crore.

The industrial smart city in Zaheerabad will be developed at a cost of Rs.2,361 crore as a part of the Hyderabad-Nagpur Industrial Corridor (HNIC). This was one of twelve simultaneous CCEA approvals that day; the CCEA greenlit the development of 12 industrial smart cities across six major industrial corridors in 10 states, with an estimated investment of Rs 28,602 crore.

Operative area, boundaries and location

The Zaheerabad Industrial Node under Hyderabad Nagpur Industrial Corridor is spread across 17 villages of Nyalkal and Jharasangam Mandals in Sangareddy district. The overall project area (Phase 1 and 2) measures approximately 12,500 acres out of which Phase-I activation area of 3,245 acres is proposed under the National Industrial Corridor Development and Implementation Trust (NICDIT) framework for a project cost of Rs.2,361 crore.

NICDC's own project page gives a marginally different total, stating that the Zaheerabad Industrial Node, spanning 12,635 acres across 17 villages in Sangareddy District, Telangana, is part of the Hyderabad-Nagpur Industrial Corridor.

On connectivity, the site is in close proximity to the 4-lane NH-65 (Pune to Machilipatnam) and is located at a distance of approximately 9 km North of Zaheerabad and about 80 km northwest of Hyderabad, and is also at a distance of approximately 65 km to the Hyderabad Outer Ring Road (ORR), approximately 48 km west of Proposed Regional Ring Road and approximately 10 km northwest of Bidar Town, Karnataka. The tap off point for gas from where the main pipeline carrying petroleum products can be diverted is at a distance of 30 km from the site at Zaheerabad and Bidar.

Land-use breakdown for Phase I (3,245 acres)

Per later state government tendering documents, of the total Phase I area, 1,900 acres will be allocated for industrial purposes, 650 acres for green zones, and the remainder for amenities, logistics, residential, and commercial infrastructure. Officials also noted that the state government has already allotted large industrial plots within the project area — Vem Technologies received 511 acres, while Hyundai was allotted 408 acres — and following these allocations, the total area for Phase I was finalised at 3,245 acres, excluding the land already allotted to these companies.

Financing structure and SPV

Implementation runs through a dedicated special purpose vehicle. TGIIC will hold a 51 percent equity stake worth ₹620.96 crore, while NICDIT will contribute 49 percent, valued at ₹596 crore, with the remaining cost met through debt financing to the SPV, NICDIT Zaheerabad Industrial Smart City Limited, which has been set up for project execution. The NICDIT board approved the proposal, with the project estimated to cost ₹2,369 crore — a figure slightly revised from the ₹2,361 crore cited at the time of CCEA approval.

Target sectors and anchor allotments

Target sectors for the Zaheerabad Industrial Smart City have been identified as automobile, electrical equipment, food processing, machinery and equipment, metals and non-metallic based industries, transport equipment.

Ahead of the formal Cabinet approval, an anchor tenant had already been secured: Rajat Saini, CEO and managing director of National Industrial Corridor Development Corporation (NICDC), said that Hyundai agreed to set up an automobile hub on 450 acres at the Zaheerabad industrial smart city in Telangana before the Cabinet approval. Telangana officials separately said the 3,245-acre industrial smart city, approved by the Centre as part of the Rs 28,602 crore NICDP, had already allotted around 500 acres to anchor clients such as Hyundai (300 acres) for its R&D facility and test track and aerospace & defence player VEM Technologies.

Background: from NIMZ (2013) to Industrial Smart City (2024)

The node is not a new site — it revives a decade-old project. The decision was taken during a Union cabinet meeting in Delhi on Wednesday, August 28, with the smart industrial city seen as a revival of the National Investment and Manufacturing Zone (NIMZ) that was established in Zaheerabad in 2013 during the earlier Congress-led UPA government, brought now under the National Industrial Corridor Development Programme. A local MP noted it was the previous Congress-led UPA government which launched NIMZ-Zaheerabad in 2013 with land acquisition and compensation completed, while the previous BRS government neglected the project from 2014 to 2024. For the first phase, 3,100 acres had already been acquired by the Telangana government, and the Shareholders' Agreement (SHA) and State Support Agreement (SSA) had also been completed by the time of CCEA approval.

Status since approval (as of July 2026)

Notification is distinct from ground-level execution. Post-approval milestones recorded in NICDC's own project monitoring reports show steady but still-in-progress implementation:

• The project proposal was recommended by NICDIT during a meeting held on 18 July 2024, and the State Support Agreement between Telangana, TGIIC and NICDIT was executed, followed by the Shareholder Agreement executed on 6 December 2024.
• By mid-2025, 2,900 acres had already been acquired, with the balance to be secured soon, and tenders for infrastructure works were expected to be finalised by October 2025.
• A second-call EPC tender was floated on 28 October 2025 and the Letter of Award for the EPC contract was issued by the SPV to M/s GVPR-SRR (JV) on 12 January 2026.
• A kick-off meeting with the EPC contractor was held on 28 January 2026, by which point 2,916.97 acres of land had been transferred to the Project SPV by the state government and matching equity amounting to Rs 536.22 crore had been released by NICDIT to the SPV.
• Site establishment, clearing and grubbing, design and drawings, and site survey work were in progress.
• The Prime Minister laid the foundation stone for the Zaheerabad Integrated Industrial Smart City on 10 May 2026.

As of this writing (July 2026), the project remains under construction — foundation-stone laid and EPC works mobilising — and is not yet operational.

Practical effect

The CCEA decision converted a long-dormant, state-level NIMZ land bank into a centrally co-funded industrial node with dedicated Union equity/debt support via NICDIT, a formal SPV structure, and a defined Phase-I execution boundary. Officials said the project is estimated to generate about 1,74,000 jobs and attract investments worth Rs 10,000 crore, though later state-level briefings referenced higher figures. Telangana officials described the project as expected to attract investments worth over Rs 15,000 crore and create nearly two lakh direct and indirect jobs. For land in the notified villages, the approval means formal transfer to the project SPV and eligibility for compensation/allotment processes already underway; for investors, it means a government-backed plug-and-play industrial park with anchor tenants (Hyundai, VEM Technologies) already committed ahead of full masterplan rollout.