Bhubaneswar: Odisha’s Rising SME Powerhouse, Deep Insights

Bhubaneswar, traditionally known for its heritage temples and administrative importance, is fast emerging as one of India’s most promising SME / MSME (Micro, Small and Medium Enterprises) hubs. Fuelled by pro-industry policies, expanding infrastructure, a growing startup ecosystem and a youthful talent pool, it stands out among Tier-2 cities not just for its promise, but for its progress. Below is a detailed look at what makes Bhubaneswar special, what’s working, what’s holding it back and where it could go from here.

A City with Strategic Vision & Policy Backbone

Odisha MSME Development Policy, 2022: This policy has been central to shaping the SME environment in Bhubaneswar and the wider state. It explicitly commits to developing “state-of-the-art infrastructure in various multi-product MSME parks, clusters, industrial estates, multimodal logistics.”
Industrial Policy Resolution 2022: Provides incentives and support for private-sector developers to build quality infrastructure, industrial parks and clusters. Helps in expediting approvals, facilitating land allotment and promoting plug-and-play features.
Cluster & Park development: Odisha has identified sector-specific clusters (e.g. Electronics System Design & Manufacturing (ESDM), Biotech Park, Aluminum Park, Plastics, Seafood) around Bhubaneswar and neighboring areas. These clusters are intended as infrastructure plus regulatory enablers for SMEs to scale and connect to exports.

Sectoral Landscape: Where SMEs are Thriving

Here are the sectors where SMEs in Bhubaneswar are making visible progress, and where latent opportunity remains.

IT, Electronics, Start-ups
- Bhubaneswar hosts over 150 IT-companies and roughly 35,000 IT professionals.
- The startup ecosystem is expanding, especially in hardware, SaaS, drone tech. Incubation centres (O-Hub, KIIT TBI, others) are providing support in terms of space, mentorship, and access to funding.
- SMEs in this sector are being encouraged to adopt AI / automation. As noted, companies and ecosystem players emphasise embracing AI to increase productivity in Tier-2 cities like Bhubaneswar.
Handicrafts, Handlooms & Heritage Goods
- Traditional crafts like silver filigree (Tarakasi), appliqué work from Pipili and Odisha’s Ikat continue to be significant. SMEs in Bhubaneswar are leveraging e-commerce to reach domestic and international markets.
- The opportunity lies in combining heritage with modern supply chain tools: better design, digital marketing, packaging and adherence to sustainability / environmental / social compliance standards.
Food Processing & Marine & Agri exports
- Bhubaneswar’s proximity to ports (Paradip, Dhamra), and rich hinterland agriculture give strong foundation for food & marine export SMEs. Seafood processing, cold chain, value-added agro produce have scope.
- For example, the state has ongoing projects for seafood parks, which help processing, storage, export certification etc. These are critical for reducing wastage and improving export competitiveness.
Light Engineering, Plastics, Manufacturing Accessories
- Industrial estates in the Bhubaneswar-Cuttack-Puri region are housing SMEs doing plastics, moulding, fabricated metal goods, electrical accessories etc.
- These sectors are under pressure to modernize better tooling, improved quality, compliance, access to better materials, supply chain linkages.
Clean Tech, Renewables & Green Manufacturing
- Odisha has policies favouring renewable energy, and SMEs have begun exploring solar EPC (engineering, procurement, construction), EV / charging infrastructure and cleaner manufacturing practices.
- Green corridors, environmental regulations, carbon compliance are emerging as differentiators for SMEs aiming to export or supply to large corporations.

Infrastructure & Logistics Enablers

Bhubaneswar’s rising SME status is tightly linked to its improving infrastructure and logistics environment:

Industrial Parks & Clusters: There are multiple sector-specific clusters being developed (ESDM park, Biotech Park, Aluminium Park, Plastics Park, Seafood Park). These provide shared utilities, plug-and-play infrastructure, common effluent facilities, etc.
Transport connectivity: Upgrades in highways (NH-16), improved road connectivity to ports, Biju Patnaik International Airport handling cargo, and proposed logistic zones. These reduce transit time and cost.
Urban policy & planned growth: Schemes like “Samrudha Sahar” (urban growth hubs / peri-urban infrastructure) with sizeable budget allocations are helping create growth hubs and industrial townships around Bhubaneswar.
Skill & Innovation Infrastructure: Technical and vocational training through State Council for Technical Education & Vocational Training (SCTE & VT), numerous ITIs and polytechnics, institutes like IIT Bhubaneswar, KIIT, incubators, world-skill centres etc. These provide a talent pipeline.

Human Capital, Skills & Innovation

Vocational Training & Technical Education: The state has many ITIs and diploma colleges under SCTE & VT, which produce diploma, polytechnic graduates and technical workforce.
Start-ups & Incubation: The entrepreneurial culture is growing, with more youth choosing to start rather than join established firms. Access to co-working / labs / prototype facilities is improving.
Adoption of New Technologies: SMEs are increasingly being nudged to use AI, automation, modern machinery and design tools. Government and private players are pushing awareness, subsidies and demonstrations

Challenges to Watch

Despite solid momentum, there are several challenges that could impede the trajectory unless addressed:

Land, Utilities & Basic Infrastructure Delays
Allotment of land in ready industrial estates remains slow. Small units often face high costs for electricity, water, waste disposal.
Financial Access & Formal Credit
Many micro and small enterprises struggle to get institutional credit. Collateral requirements, lack of clear credit history and risk perception remain deterrents.
Regulatory & Compliance Costs
Environmental compliance, export certification, product quality standards etc. impose costs. For smaller players these costs can eat into margins, especially without support.
Technology Gaps & Low Automation
Some SMEs still rely on older machinery, manual workflows, lack integration with digital tools for marketing, logistics or supply chain optimization.
Market Access & Export Linkages
Even when capacity exists, many SMEs struggle to connect with global buyers, meet required standards and deal with logistics / customs / certifications.
Skill Gaps at Higher Levels
While basic technical workers are available, higher-order skills (R&D, design, quality assurance, supply chain management) are comparatively thinner.

Where Bhubaneswar Could Lead

To further enhance its SME competitiveness, here are some promising pathways:

Cluster-based Upgradation & CFCs (Common Facility Centres): Build or upgrade common facilities for testing, prototyping, quality certification, packaging etc.
Deepening Export-Readiness: Support schemes for export certification, providing cold chain, warehousing, help with trade finance and customs clearance.
Green Manufacturing & Sustainability Standards: Encourage SMEs to adopt clean energy, zero-waste processes, sustainable packaging. These will be differentiators in international markets.
Plug-and-Play Industrial Estates: Faster land & utility allotment, ready-made sheds / plots, minimal approval friction.
Technology Adoption Support: Subsidies, incubators, extension services to help SMEs adopt AI, automation, Industry 4.0 tools.
Public-Private Partnerships (PPPs) & Collaborations: Academia, industry, government working together: research, labs, talent development.
Improving Finance Ecosystem: Simplified loan processes, credit guarantee, less reliance on collateral, fintech / NBFC involvement to reach smaller players.

Policy Moves & Recent Developments

Some recent developments show the state is moving ahead:

Odisha has approved new district MSME parks in every district, as emphasized by the Chief Minister.
Major MoUs signed at the Odisha Tex 2025 summit with investment intents ~ ₹7,808 crore, expected to create ~ 53,300 jobs in textile & apparel. This reflects push in sectors with quick implementation potential.
New scheme Samrudha Sahar with ~₹4,879 crore outlay focusing on planned urbanisation & growth hubs is aimed to strengthen urban infrastructure and set up industrial clusters / growth centers.
Approval of an MRO facility (Maintenance, Repair & Overhaul) at Biju Patnaik International Airport (BPIA) is significant east India’s first major MRO facility; this will help aviation sector SMEs and related supply chains.

What Needs to Happen

To secure Bhubaneswar’s status as a model SME hub, the following would be critical:

Streamline the approval / clearance process via digital, single-window systems.
Ensure incentives & support reach small and informal units (micro MSMEs) just as much as formal ones.
Strengthen export facilitation offices; ensure that SMEs are hand-held through certifications, trade fairs, buyer matchmaking.
Boost skill development especially in quality, design, export compliance, logistics.
Monitor and manage environmental / sustainability compliance carefully, so that smaller firms are helped rather than penalised.
Promote industry-academia-government R&D collaborations to build innovation in materials, design, processes.

Bhubaneswar is at a promising inflection point, with all the right ingredients to evolve into a leading SME powerhouse. Supportive policies, rapidly improving infrastructure, dynamic growth sectors and a vibrant talent base provide a strong foundation for long-term success. What the city needs now is sustained focus on execution, strategic investments in skills, sustainability, export competitiveness and the removal of bottlenecks in land, finance and technology.

With the right momentum, Bhubaneswar can rise well beyond being a regional success story. It has the potential to become a benchmark for SME-led transformation across eastern India, driving manufacturing strength, boosting exports and advancing India’s economic ambitions through 2030 and beyond.