Maharashtra Embraces Vertical Industry Policy to Overcome Land Scarcity

Maharashtra is set to introduce a vertical industrial development policy, aiming to optimize space for manufacturing and support a sustainable, competitive industrial economy in the face of dwindling land availability.

Industrial GrowthVertical DevelopmentSustainabilityLand ScarcityRenewable EnergyReal Estate MaharashtraJul 01, 2025

Maharashtra Embraces Vertical Industry Policy to Overcome Land Scarcity

Real Estate Maharashtra:Maharashtra is preparing to introduce a vertical industrial development policy, positioning Mumbai as a pioneer in optimizing space for manufacturing while supporting a green and competitive industrial economy. Officials from the state’s industries department confirmed at a recent business conclave in Mumbai that a policy encouraging vertical industrial structures—multi-storey units for manufacturing, storage, and allied services—is under active development.

This marks a significant policy shift in a state where horizontal expansion has long dominated industrial growth, even as available land has dwindled. The initiative was announced during a panel discussion aimed at outlining strategies to help Maharashtra achieve a USD 1 trillion economy. Senior government representatives noted that the new policy would not only tackle the land shortage but also aim to align the state’s industrial growth trajectory with sustainability benchmarks, particularly in managing pollution and waste generation.

Officials clarified that the upcoming policy will incorporate clear guidelines to restrict environmental hazards. Pollution control measures for waste disposal, air emissions, and sewage will be key criteria in the approval process for vertical industrial developments. These guardrails are being designed to ensure compliance with environmental laws while encouraging innovation in space-efficient industrial planning. The discussion also spotlighted Maharashtra’s parallel efforts to make industrial power more affordable and cleaner. Senior energy officials revealed that the state plans to significantly scale up its power generation capacity from 13,000 MW to 26,000 MW over the next decade. A substantial share of this expansion will be led by renewable energy projects, aimed at reducing costs and emissions.

At present, Maharashtra is among the states with the highest industrial power tariffs in the country, a pain point repeatedly raised by business leaders. Energy department officials acknowledged the challenge and assured that tariffs would be gradually brought down over the next five years, aided by cheaper, decentralized green power. A senior official from the state energy corporation noted that industries stand to benefit from Maharashtra’s expanding solar and wind infrastructure. He stated that cheaper green power sources could eventually stabilize tariffs at around ₹6.50 per unit—an estimate supported by leading industry representatives who advocated for immediate tariff relief.

Top representatives from large industry houses and infrastructure firms present at the event backed the government’s focus on long-term sustainability. One infrastructure sector expert argued that the future of industrial competitiveness lies in clean, liveable urban environments, and called for at least five world-class, pollution-free industrial cities to be developed across India. These cities, the expert emphasized, should serve as magnets for talent, investment, and innovation, much like urban hubs in Singapore or Shanghai. Drawing attention to Mumbai’s environmental challenges, particularly during the winter months, speakers flagged that poor air quality driven by construction dust and fossil fuel use could act as a deterrent to future investment. The expert said that addressing such issues is essential for Maharashtra to retain its edge in attracting foreign direct investment and high-value manufacturing.

The Chief Executive Officer of Maharashtra’s industrial development corporation reiterated the state’s strong track record in attracting investment despite increasing competition from emerging industrial destinations such as Gujarat, Tamil Nadu, and Telangana. He added that the vertical development policy will reinforce Maharashtra’s leadership by allowing faster, high-density industrial development in areas where land parcels are limited or unaffordable. Experts involved in drafting the new vertical development norms highlighted the policy’s alignment with international models seen in Japan, Germany, and South Korea, where urban manufacturing and multilevel industrial spaces are common. According to them, vertical industrial growth enables not just space savings, but also energy efficiency, better logistics, and improved safety and compliance monitoring.

The state’s new industrial roadmap will integrate climate resilience and ESG (environmental, social, governance) metrics into its core. Planners are reportedly also considering provisions for circular economy models, in which industrial units will be encouraged to share energy, water, and waste management infrastructure through co-located facilities. This transition is crucial as Maharashtra, and Mumbai in particular, grapple with questions of inclusive and green urbanization. Experts pointed out that policies that merge industrial productivity with environmental responsibility are essential to building future-ready cities that are both equitable and economically vibrant.

Government planners have hinted that pilot zones for vertical industrial development could be launched near urban fringes with existing connectivity and power infrastructure. These may include clusters around Navi Mumbai, Aurangabad, and Nagpur—regions where industrial demand is high, but horizontal expansion is nearing saturation. The transition to vertical industrial spaces is also expected to bring down overall costs for small and medium enterprises (SMEs), which often struggle to afford land in high-demand areas. Shared vertical zones could provide them with plug-and-play models, shared utilities, and smoother regulatory oversight.

While the policy’s full rollout is expected in the coming months, it has already generated cautious optimism among developers and manufacturers. The real test, however, will lie in ensuring that the vertical shift does not sacrifice worker safety, pollution controls, or equitable access for MSMEs. As Maharashtra positions itself for the next phase of economic growth, the success of its vertical industrial policy could redefine urban manufacturing in India—placing sustainability, innovation, and spatial efficiency at the center of a new industrial era.

Frequently Asked Questions

What is the main goal of Maharashtra's vertical industrial development policy?

The main goal is to optimize space for manufacturing and support a sustainable, competitive industrial economy, particularly in areas where land is scarce.

How does the policy address environmental concerns?

The policy incorporates clear guidelines to restrict environmental hazards, including pollution control measures for waste disposal, air emissions, and sewage.

What role will renewable energy play in this new policy?

Maharashtra plans to significantly scale up its power generation capacity from 13,000 MW to 26,000 MW over the next decade, with a substantial share coming from renewable energy projects to reduce costs and emissions.

How will this policy benefit small and medium enterprises (SMEs)?

Shared vertical zones could provide SMEs with plug-and-play models, shared utilities, and smoother regulatory oversight, making it more affordable for them to operate in high-demand areas.

Where are the pilot zones for vertical industrial development likely to be located?

Pilot zones could be launched near urban fringes with existing connectivity and power infrastructure, such as clusters around Navi Mumbai, Aurangabad, and Nagpur.