On the request of U.P. Govt. the National Institute of Design (NID), Ahmedabad conducted a study on the craft scenario in U.P. and submitted an exhaustive report recommending the setting up of an institution that could draw upon the strengths of the vibrant crafts industry in the state and offer innovative educational programmes that would lead to the development of the craft community in the state. The report envisaged an educational institution that could play a major role in training crafts persons and artisans, in offering design and technical assistance to crafts people working in the crafts and cottage industry sectors. It recommended that the design talent that UP needs should be developed from within its own craft traditions by harnessing local talent. NID recommended the establishment of an institute that would act as a catalyst for the development of both design and management capabilities essential to the task of revitalizing crafts in the state. The recommendation was founded on UPID’s own experiences while working with craft clusters through its educational and outreach programmes, and the prevailing realities of UP’s crafts sector amidst the changing socioeconomic paradigms.

Based on the recommendations of UPID, the Government of Uttar Pradesh constituted the Uttar Pradesh Institute of Design (UPID) in year 2003 as an autonomous institute registered under the Indian Societies Act 1860 for the purpose of conducting suitable certificate/diploma courses in Craft Design education.

The Institute was funded with an annual grant of Rs. 50 lac for two consecutive years by the U.P. Government and Rs. 87 Lac was received as the first installment of grant from the Central Govt. The resources of the Central Design Center including building and craft museum have also been transferred to the Institute

In subsequent years detailed curriculum was developed by UPID on the request of U.P. Government amongst other activities .

Appreciating the prime importance of design for the promotion, preservation and sustenance of the rich textile and handicraft heritage of the state, the Government of U.P. has now taken up the establishment of the institute in right earnest.