Industrial Growth
Centre Approves Zaheerabad Industrial Smart City: Rs 15,000 Crore Investment, 2 Lakh Jobs Expected
The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi approved a project to establish an Industrial Smart City at Zaheerabad in Sangareddy district on August 28, 2024. The project is expected to attract investments worth over Rs 15,000 crore and create nearly two lakh direct and indirect jobs, positioning the region as a major manufacturing hub.
| Approval Date | August 28, 2024 (Cabinet Committee on Economic Affairs) |
|---|---|
| Project Development Cost | Rs 2,361 crore |
| Expected Private Investment | Over Rs 15,000 crore |
| Jobs Target | Nearly 2 lakh direct and indirect |
| Phase 1 Area | 3,245 acres (of 12,635 total acres across 17 villages) |
| Location | Nyalkal and Jharasangam Mandals, Sangareddy District, 9 km north of Zaheerabad town, 80 km from Hyderabad |
| Target Sectors | Automobile, electrical equipment, food processing, machinery, metals, non-metallic industries, transport equipment |
| Governance Structure | TGIIC (51% equity), NICDIT (49% equity) via SPV: NICDIT Zaheerabad Industrial Smart City Limited |
| Environmental Status | Environmental clearance obtained from Union Ministry of Environment and Forests |
| Corridor | Hyderabad-Nagpur Industrial Corridor (HNIC), part of National Industrial Corridor Development Programme (NICDP) |
What Was Decided
The project is part of the 12 Industrial Smart Cities being established under the National Industrial Corridor Development Programme (NICDP) with an estimated investment of Rs 28,602 crore. The Cabinet Committee on Economic Affairs approved an Industrial Smart City at Zaheerabad to be developed at a cost of Rs 2,361 crore as part of the Hyderabad-Nagpur Industrial Corridor.
Key Officials and Announcements
State industries and commerce special chief secretary Jayesh Ranjan noted that the project aligns with Telangana government's focus on decentralising industrial growth, occurring in a location with a large rural catchment. Union coal and mines minister G Kishan Reddy identified target sectors including automobile, electrical equipment, food processing, machinery & equipment, metals & non-metallic based industries and transport equipment.
Investment and Job Creation Targets
The project is expected to attract investments worth over Rs 15,000 crore and create nearly two lakh direct and indirect jobs, according to top Telangana officials. Earlier announcements had estimated around 1,74,000 jobs and investments worth Rs 10,000 crore, with the higher figures reflecting revised projections following the cabinet approval and environmental clearance.
Geographic and Connectivity Details
The site is located approximately 9 km north of Zaheerabad and about 80 km northwest of Hyderabad, in close proximity to the 4-lane NH-65 (Pune to Machilipatnam). Multi-modal connectivity includes 2-lane SH-14 (Zaheerabad–Bidar) about 2 km from the site and 2-lane SH-16 (Nizampet–Bidar) that abuts the site. Metalkunta Railway Station is 12 km away and Zaheerabad Railway Station is about 19 km away. The node spans 12,635 acres across 17 villages in Sangareddy District.
Existing Industrial Base
Zaheerabad is already Mahindra & Mahindra's manufacturing hub for small tractors and some commercial vehicles. Telangana has already allotted around 500 acres to anchor clients such as Korean auto giant Hyundai (300 acres) for its R&D facility and test track and aerospace & defence player VEM Technologies.
Project Structure and Funding
TGIIC will hold a 51 percent equity stake worth ₹620.96 crore, while NICDIT will contribute 49 percent valued at ₹596 crore, with remaining cost met through debt financing to the special purpose vehicle NICDIT Zaheerabad Industrial Smart City Limited. The project has bagged the requisite environmental clearances from the Union environment and forests ministry.
Timeline and Next Steps
The project, which was pending for over five years, will take about two to three years to develop. Tenders for infrastructure works are expected to be finalised by October, with construction and commissioning projected to take about 18 months after commencement. Prime Minister Narendra Modi is expected to lay the foundation stone for the project on May 10, 2026.
Strategic Significance
The plan will boost Zaheerabad as a big standalone industrial township with access to west coast ports, attracting companies that have import/export component in their business. There is a strong automotive cluster already present; focus will be on pushing more automotive, EV and energy storage players, with other sectors keen on port access also expected to set up.
Development phases
Land use
Frequently asked questions
When was Zaheerabad Industrial Smart City approved?
The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi approved the project on August 28, 2024.
How much will the project cost and how much investment is it expected to attract?
The industrial smart city will be developed at a cost of Rs 2,361 crore, while it is expected to attract investments worth over Rs 15,000 crore.
How many jobs will the project create?
The project is expected to create nearly two lakh direct and indirect jobs.
What sectors will the smart city focus on?
Target sectors include automobile, electrical equipment, food processing, machinery and equipment, metals and non-metallic based industries, and transport equipment.
How far is Zaheerabad from Hyderabad?
The site is located about 80 km northwest of Hyderabad, in close proximity to the 4-lane NH-65 (Pune to Machilipatnam).
What is the governance structure of the project?
TGIIC will hold a 51 percent equity stake worth ₹620.96 crore, while NICDIT will contribute 49 percent valued at ₹596 crore, through the SPV NICDIT Zaheerabad Industrial Smart City Limited.
Who are the anchor industrial clients?
Telangana has allotted around 500 acres to anchor clients such as Korean auto giant Hyundai (300 acres) for its R&D facility and test track and aerospace & defence player VEM Technologies. Mahindra & Mahindra already operates a manufacturing hub in Zaheerabad for small tractors and commercial vehicles.
Sources
- Zaheerabad Industrial Smart City – NICDC Official
- Zaheerabad Telangana – NICDC Project Page
- Centre Approves Industrial Smart City at Zaheerabad – Deccan Chronicle
- Centre to Develop Zaheerabad NIMZ as Smart Industrial City – Siasat
- Industrial Smart City – NICDC News
- Centre Selects Zaheerabad for Smart City Development – Telangana Tribune