Bihar is located in the eastern part of India. The state is surroun ded by Nepal in the north, West Bengal in the east, Uttar Pradesh in the west, and Jharkhand in the south. The state enjoys a unique location-specific advantage because of its proximity to the vast markets of eastern and northern India, access to ports such as Kolkata and Haldia, and to raw material sources and mineral reserves from the neighboring states.

The economy of Bihar has witnessed a structural transformation in the last one and half decades. The agricultural sector occupies a prominent place in the structural changes of the economy with a significant contribution to the state’s income and rural employment. For accelerating agricultural growth, the government of Bihar has introduced various policy initiatives at different points in time. These initiatives are being implemented under different phases of what is called agriculture roadmaps. While these policy initiatives seem to have helped in accelerating Bihar’s agricultural growth from 2.0 percent per annum during the period 2000–01 to 2007–08 to 3.1 per annum during the period 2008–09 to 2011–12, agricultural growth decelerated to 1.3 per cent during the subsequent period of five years (2012–13 to 2016–17).

The Gross State Domestic Product (GSDP) of Bihar grew at a CAGR of 13.27% between 2015-16 and 2019-20. Bihar has witnessed strong growth in per capita net state domestic product. At current prices, per capita, the NSDP of the state grew at a CAGR of 13.41% (in Rs.) between 2016 and 2021.

Bihar is one of the strongest agricultural states. The percentage of the population employed in agricultural production in Bihar is around 80%, which is much higher than the national average. It is the fourth-largest producer of vegetables and the eighth largest producer of fruits in India. Food processing, dairy, sugar, manufacturing, and healthcare are some of the fast-growing industries in the state. The state has planned initiatives for the development of other sectors such as education and tourism and also provides incentives for information technology and renewable energy.

The state has a large base of cost-effective industrial labour, making it an ideal destination for a wide range of industries. According to the Department for Promotion of Industry and Internal Trade (DPIIT), the cumulative FDI inflows in Bihar were valued at US$ 50.62 million between October 2019 and March 2021.

Total merchandise export from the state stood at US$ 1,661.13 million in 2020. In 2020-21 (until January 2021), exports stood at US$ 1,160.72 million.


In terms of the production of fruits and vegetables, Bihar happens to be the seventh largest state in the country and, consequently, has relatively better opportunities for Agri-based industries. Bihar offers enormous opportunities for investment in the food processing sector. Besides food processing, the beverages, tobacco, etc. cover a large number of products, with high net value addition and employment potential. The tea and dairy industries have also started expanding in the state. Bihar grows a variety of fruits and vegetables in huge quantities. The total area under fruits in the state in 2013-14 was 290 thousand hectares and, under vegetables, it was 778 thousand hectares. The Fruits like banana, mango, guava and litchi are important in the state in terms of production.

  1. Food Processing: In the food processing sector, up to December 2013, a total of 191 project were sanctioned with a total project cost of 2606 crore, and a grant amounting to Rs. 202 crore was released. The employment generation was 15,181. Out of the sanctioned projects, only 111 gone into commercial production. By September 2014, the total number of sanctioned projects increased to 328 with a total cost of Rs. 3871 crores. Of these, 180 units started the commercial production. The grant released amounted to Rs. 294 crore and the estimated employment generation also increased to 21,240. The three principal types of food processing industries are rice milling, wheat milling, and maize milling. Between December, 2013 and September, 2014, a period of nine months, as many as 30 rice milling, 6 wheat milling, and 11 maize milling units had started in Bihar. This was indeed a substantial addition to the state’s industrial scenario. State on commercial basis, covering an area of 793 hectares, the total production being 8831 tons in 2013-14.
  2. Sugar Industry: Sugarcane is grown in approximately 6 percent of the total area under cultivation in Sugarcane production in the state for 2018-19 (P) stood at 182.85 lakh MT. During sugar season 2019-20, 11 sugar mills were operating in the state of Bihar. During 2019-20, 220.50 lakh MT sugar is estimated to be produced in Bihar.
  3. Diary: Traditionally, the animal husbandry in Bihar is undertaken primarily to meet the household need for But at present, the dairy is viewed as an industry. The Bihar State Milk Cooperative Federation (COMFED), established in 1983, has played a pivotal role in the development of dairy sector in the state. It is the implementing agency of Operation Flood programme in the state, and has worked towards promoting the White Revolution. It has also contributed towards developing the rural areas through enhancing the income level of households, particularly of the small and marginal farmers. For the establishment of the milk cooperatives, COMFED adopted the pattern of Anand in Gujarat. This is a three-tier pattern, under which there is milk producers’ cooperative society at the village level, milk union at the district level, and milk federation at the state level. During 2013- 14, COMFED has proceeded a step ahead and reached the 7th position among the milk federations in the country. A Road Map for the dairy development in the state (2012-17) has been prepared and, in order to achieve the targets fixed, the capacity of the milk plants has been enhanced. As a result, COMFED in March 2014 achieved the maximum milk collection of 20.61 lakh liters in a day and processed it successfully.
  4. Makhana: Within fruits, some positive trend for the makhana industry has also emerged in the Bihar is the only state producing makhana on commercial lines. The item is quite nutritive and compares well with fish/ mutton in terms of protein content. In China, raw makhana seed powder has been considered to be an essential ingredient of baby food. It has a big market, local as well as outside. But the technology adopted is old and Labour intensive.
  5. Tea: Tea is an agro-based industry that started taking roots in the state during the Now the tea industry is growing fast in the state and tea is cultivated in more than 25 thousand acres, mostly in the Kishanganj district. Pothia block, in the district, alone accounts for 50 percent of the area under tea cultivation, followed by Thakurganj (40 percent) and Kishanganj (10 percent). More than 4 million kgs. of tea is grown every year in Bihar. There are 7 tea processing plants in Kishanganj, with an annual output exceeding 2300 tonnes. There is still scope for another 50 new tea processing plants in Kishanganj. If new plants are established, the tea cultivators need not ferry the tea leaves to the neighboring north Bengal. A tea promotion policy for the advancement of the tea industry is being finalized by the state government. The state government has announced subsidies and incentive packages for new tea processing plants.


  1. Handloom: The handloom sector in the state has witnessed a gradual decline in recent Despite various schemes of the state government, the production in handloom sector is continuously declining. However, the fact remains that more than 1.32 lakh weavers are completely dependent on this sector for their livelihood. There are 1089 primary handloom weavers’ societies in the state, with nearly 34 thousand handlooms operating under them. There are two apex-level marketing organizations, viz., Bihar State Handloom Cooperative Union, Patna and Bihar State Wool and Sheep Union, Patna. There is One Corporation— Bihar State Handloom and Handicraft Corporation— with 6 Regional Handloom Unions located in Nalanda, Sitamarhi, Siwan, Madhubani, Purnea and Bhagalpur.
  2. Power loom: There are 11,000 power looms in the state, concentrated mainly in Bhagalpur, Gaya and Banka districts and their main products are staple chadar, furnishing clothes, There is a training centre at Nathnagar (Bhagalpur), run by the Ministry of Textiles, Government of India, where 120 power loom weavers are trained each year.
  3. Sericulture: Bihar possesses a great potential for In order to provide employment in the rural areas, the Chief Minister Tassar Development scheme was started in 2012-13. Under this, a sum of Rs. 170.90 crore has been approved under State Plan for Tassar Area Development in the districts of Banka, Munger, Nawada, Kaimur, Jamui and Gaya, and some water-logged areas in the north Bihar where the plantation of Arjun and Asan tees is feasible. The scheme will be completed during the Twelfth Plan period.
  4. Jute: Bihar possesses a great potential for jute. There is need of certain interventions like establishment of jute park, modernization of looms, the establishment of processing and design centre, the establishment of a nodal centre for design and product development, establishment of raw material bank for jute, etc for the better prospect of the jute industry.
  5. Khadi and Village Industries: The Khadi and Village Industries Commission (KVIC) is a statutory organization under the Ministry of MSME as the single national nodal agency for the sector. As a nodal agency, KVIC implements cluster development activities for traditional products of khadi and village industries, under the Scheme of Fund for Regeneration of Traditional Industries (SFRTI).The total employment in the KVI sector is estimated to have increased to 140.38 lakh persons (10.98 lakh is Khadi and 129.40 lakh in village industries) in 2013-14. In order to help the weavers of the state, a 10 percent additional rebate is allowed on the sale of Khadi products, the benefits of which may be availed by the institutions/ societies registered under the State KVI Board. For the financial year 2013-14, a sum of Rs. 543.36 lakh has been sanctioned for Khadi rebate
  6. Leather Industries: Bihar is rich in bovine population, accounting for around 8 percent of the country’s total bovine Again, the goat population in Bihar accounts for nearly 12.1 percent of the country’s total goat population, ranked third in the country, next only to West Bengal and Rajasthan. Buffalo and sheep account for 4.2 and 1.9 percent, respectively, of the country’s total population of those animals. According to a recent survey conducted by Central Leather Research Institute (CLRI), Chennai, Bihar annually produces 2.64 million bovine hides and 5.09 million bovine skins. The state is known for best quality goat skins, cow hides and buffalo’s calf skins. Goat skins are smaller in size and the best material for the production of glazed kid leather products, which are mostly exported. There are seven main markets for hides and skins in the state — Patna, Ara, Aurangabad, Munger, Muzaffarpur, Katihar (Pabai) and Purnea.