Peenya industrial area: Bengaluru’s manufacturing backbone gains SIR status

Peenya Industrial Area, Bengaluru’s 4,000‑acre hub with 13,000 MSMEs, ₹35k cr turnover, now SIR; despite pollution, it drives growth in manufacturing and logistics

The Peenya Industrial Area in northwestern Bengaluru has long been regarded as one of Asia’s largest manufacturing ecosystems. Spread across 4,000 acres, it houses nearly 13,000 micro, small and medium enterprises (MSMEs) and provides employment to around 1.3 million people. Established in the late 1970s as an industrial corridor, Peenya today generates an annual turnover of approximately ₹35,000 crore. In June 2025, the Karnataka government officially declared it a Special Investment Region (SIR), further cementing its role as the city’s industrial backbone.

Sectoral Strengths and Workforce Diversity
Peenya is home to a wide range of industries, including engineering, electrical equipment, machine tools, hydraulics, textiles, and rubber molding. Prominent companies such as Wipro Technologies, ABB, Kardex Remstar, and several specialized Indian manufacturers operate here. Notably, women make up nearly 50% of its workforce—almost double the national MSME average—underscoring its role in providing formal jobs and social mobility.

Real Estate and Market Position
Industrial sheds and warehouses in Peenya command premium rentals of ₹28–35 per sq ft, reflecting strong demand and dense supplier networks. Compared to Whitefield, Bommansandra, and Nelamangala, Peenya remains the most expensive industrial zone, supported by metro connectivity and established logistics.
Governance and Environmental Challenges

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Under the SIR framework, 70% of property tax revenue is reinvested locally, ensuring infrastructure upgrades and accountability. However, Peenya faces significant environmental concerns. With a CEPI score of 65.11, it ranks among India’s most polluted zones. Nearly 800 industries fall under red and orange categories, contributing to poor air quality and contaminated groundwater. While stricter clearances are now mandatory, many MSMEs struggle to meet compliance due to financial constraints.

Investment Outlook
Warehousing yields range between 6–8%, with potential to rise as infrastructure improves. Residential spillovers in Hebbal, Yeshwanthpur, and Thanisandra offer combined returns of 12–17%, while logistics hubs linked to Peenya’s supply chains deliver yields of 7–10%.

Conclusion
Peenya’s evolution into a sophisticated industrial ecosystem, coupled with its SIR designation, positions it as a critical hub for manufacturing, logistics, and real estate growth. Despite environmental challenges, its skilled workforce, supply chain depth, and infrastructure promise strong returns over the next five to seven years.

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