LOVELY PROFESSIONAL UNIVERSITY

DEPARTMENT OF MANAGEMENT

Report on Summer Training

Report on Overview of Indian export industry with special emphasis on Punjab
Submitted to Lovely Professional University

In partial fulfillment of the

Requirements for the award of Degree of
Master of Business Administration
Submitted by:
Manvi Adlakha
University Roll No.Q1305, A29
Reg:-11311376

DEPARTMENT OF MANAGEMENT
LOVELY PROFESSIONAL UNIVERSITY
JALANDHAR NEW DELHI GT ROAD
PHAGWARA PUNJAB

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DECLARATION

I, Manvi Adlakha, student of MBA 3rd Semester, hereby declare that project entitled Report on
Overview of Indian Export Industry with special emphasis on Punjab submitted in the partial
fulfillment of the degree for Master of Business Administration to Lovely Professional
University is of my own accurate work.
I further declare that all the facts and figures furnished in this project report are the outcome of
my own intensive research and findings. It is an authentic report on secondary research of the
topic taken by me under the guidance of and part or full of it has been presented elsewhere
before any other University or Institute for the award of any Degree or Diploma.

Manvi Adlakha
MBA 3rd Semester

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ACKNOWLEDGEMENT

First of all I thank the LOARD ALMIGHTY for giving the courage and wisdom to take up this
project and complete it successfully. I take this opportunity to express my thanks to each and
every person who have helped me and guide me in doing this project.
I wish to express my sincere gratitude to the Respected Dean Mr. Modi for giving a chance to do
this project under CODE in Lovely Professional University.
I am grateful to Mr. Ajay Kumar Khullar (Mentor) for allowing me to undertake my training
under his guidance. It is the result of his esteem kindness that I am able to complete my project.
I exploit this opportunity in express sense of gratitude and indebtedness whole heartedly to
Mr. Ajay Kumar Khullar and Mr. Rajeev Gupta for their encouragement while carrying out
study of our project work on training need analysis.
I sincerely thank all the members of the teaching and non- teaching staff in the Department of
Master of business administration for their sustained help in my pursuits.
I am really thankful to all the members of CODE (Lovely Professional University) for
providing me the necessary help required during the training period.

Manvi Adlakha
MBA 3rd Semester

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TABLE OF CONTENTS:
Sr.No.

Topic

Page no

1
2

Abstract
Chapter 1 Introduction

1.1
3

Export

Chapter 2 : Overview of Indian Export industry

2.1 History of export
2.2 Countries where India export
2.3 Products exported by India
2.4 India export 2012-2014
2.5 Regional export patterns
2.6 Top 10 exporting companies of India

Chapter 3 : Overview of Punjab export

2.1 Punjab
3.2 Industrial cluster
3.3 Major industries
3.4 Commodities wise export
3.5 SWOT Analysis

6
8
9
10
11
14
18
20
21

References

25
27
28
29
30
41

ABSTRACT:
International trade is the exchange of goods and services between countries. This type of
trade gives rise to a world economy, in which prices, or supply and demand, affect and are
affected by global events. This report actually emphasizes on export industry of Punjab by
comparing it with export industry of India and world. I have discussed about various companies
that are in exporting business in accordance with world, India and Punjab. Main focus is on

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companies of Punjab and various items that Punjab exports to the world and how much Punjab
contributes in national economy and world economy.
This report includes all products that are exported from India in various countries and
their share in the world market. This report will tell you about history of India export industry
and its overview and all other things that are important in terms of export in both India and
Punjab industry.

1) INTRODUCTION

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International trade is defined as trade of goods and services of nation with rest of the world. In
other words international trade is the exchange of goods and services between countries. This
type of trade gives rise to a world economy, in which prices, or supply and demand, affect and
are affected by global events. Trading globally gives consumers and countries the opportunity to
be exposed to goods and services not available in their own countries. Almost every kind of
product can be found on the international market like;

Foods
Clothes
spare parts
Oil
Jewelry
Wine1
Stocks
Currencies
Water.
Services are also traded:
Tourism
Banking
Consulting
Transportation.
A product that is sold to the global market is an export, and a product that is bought from
the global market is an import. Imports and exports are accounted for in a country's
current account in the balance of payments.

India has opened economy. India trading partners are USA, UK, UAE, Switzerland, South
Korea, Singapore, Saudi Arabia, Nigeria, Japan, Iran, Indonesia, Hong Kong, Germany, China,
and Belgium.
USA, China, UAE, Saudi Arabia, Singapore and Germany have been the top trading partners of
India for the past 3 years.

1
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1.1) EXPORTS:
A function of international trade whereby goods produced in one country is shipped to another
country for future sale or trade. The sale of such goods adds to the producing nation's gross
output. If used for trade, exports are exchanged for other products or services. Exports are one of
2 www.innovativejournal.in
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the oldest forms of economic transfer, and occur on a large scale between nations that have fewer
restrictions on trade, such as tariffs or subsidies.
Export of

commercial

quantities

of

goods

normally

requires

involvement

of

the customs authorities in both the country of export and the country of import. The advent of
small trades over the internet such as through Amazon and eBay has largely bypassed the
involvement of Customs in many countries because of the low individual values of these trades.
Nonetheless, these small exports are still subject to legal restrictions applied by the country of
export. An export's counterpart is an import.

2) OVERVIEW OF INDIAN EXPORT INDUSTRY:

The export business in India is the subsequent result of globalization and growth of trade
relations between countries. Through these trade relations the Indian exporters have gained
opportunities to expand their business overseas.
3

http://www.investopedia.com/terms/e/export.asp

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The Indian products have a huge demand in the foreign markets. The export business has been
flourishing and according to reports it contributes a huge share to the development of the
country. The Indian exporters have succeeded in with standing the stiff competition prevalent in
the foreign markets through skilled manpower and quality products.

Export sector of Indian Economy has improved immensely over the years and has earned US $
125 billion in the year of 2005-06. Indian exports has estimated target of US 160 billion in 200708. The achievement came to the Indian exports in the same fiscal despite the odds against the
exports, minimizing the gains. In the first two months of 2007-08 exports grew by 20.3%, which
was a little lower than the previous year over the same period a year ago.
(http://business.mapsofindia.com/sectors/export.html)
Exports in India decreased to 26479.72 USD Million in June of 2014 from 27998.50 USD
Million in May of 2014. Exports in India averaged 4005.73 USD Million from 1957 until 2014,
reaching an all time high of 30541.44 USD Million in March of 2013 and a record low of 59.01
USD Million in June of 1958.
4

2.1) HISTORY OF EXPORTS:

India is working in agriculture sector ever since the ancient times till the establishment of
the British Empire. Indian trade history reflects that despite the frequent political
upheavals during the 12th to the 16th centuries, the country was still prosperous. The

http://www.tradingeconomics.com/india/exportshttp://EzineArticles.com/5356745

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political and economic policies followed by the Muslim rulers propagated the growth of
towns in various parts of the country. These towns grew into trade and industrial centers
which in turn led to the general prosperity. From the 16th to the 18th centuries, covering
the two hundred years of Mughal rule, Indian urbanization saw further growth.

India was well known for its textiles one of the chief items of export. Textiles from
Gujarat were sent to the Arab countries and to South-east Asia.

Trade history of India also shows hardwood furniture.

A larger variety of ornamental work in cut stones, ivory, pearl and tortoise shells
were produced in South India.

Pearl fishing was a major industry here.

Indian art and crafts patronized by Indian rulers were unmatched for their beauty and skill
and were very popular in the European countries.

2.2) COUNTRIES WHERE INDIA EXPORTS:

5

http://www.tradechakra.com/indian-economy/exports/index.html
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India has developed business relations with a number of foreign countries like the member
countries of SAARC, some Eastern European countries as well as African countries, members of
EU.
Various countries include;

Russia
UAE
USA
Hong Kong
UK
Japan
Germany
Singapore
Belgium
Malaysia
Netherlands
Bangladesh
Italy
France
Australia
Belgium

USA has turned out to be the most significant export partner of India and the export sector of
Indian economy earned approximately US $13265.60 million in 2006-07. UAE has stood second
only to USA as UAE contributed 9.7 out of the total Indian earnings from exports in 2006-07.
UK and China has exchanged their positions in the current year as China's share among the
exports figure in India in 2006-07 has improved by 6.3 % in comparison to 2005-06. In 2004-05
Belgium and Italy contributed substantially to the earnings from exports, with a contribution of
US $ 2442.09 million and US $ 2160.83 million respectively.
6

India has seen massive directional change in the context of origin of demand for Indian products.
Till 2001-02 North America and the EU markets shared nearly 21% and 23.2 % respectively of
6
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total exports and the remaining to the rest of the globe. By 2006-07, North America had a share
of only 16% of the total exports and the EU's share was 21.2%.

Europe turned out to be the most favored export destination with 33% of the companies earning
their

revenues

from

this

region,

followed

by

Asia

and

America.

The US and Germany were the most preferred destinations within the American and European
regions.
Russia and Ukraine turned out to be prospective export destinations in the CIS region.
Singapore, which is Indias largest trading and investment partners in ASEAN, emerged as one
of the most popular export destinations in Asia.
In recent years India has recognized the export potential of Africa. With India, on the average of
providing preferential market access for exports from all 50 Least Developed Countries, of
which 34 are in Africa, bilateral trade is expected to increase in the coming years. South Africa
emerged as the most lucrative country for export in the African region where India holds the rank
of 20th largest exporter and importer for South Africa and is its sixth largest trading partner in
Asia.

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In the Middle East, the UAE was the most preferred spot; the Associated Chambers of
Commerce and Industry (ASSOCHAM) has predicted that Indias trade with the UAE will touch
$ 25 bn by 2010.
With plans to treble the bilateral trade from around $3.2 billion to $10 billion by 2010, Brazil
turned out to be the most promising export destination in the LAC region. Mexico emerged as
the other prominent market in LAC region with India signing a ten-year bilateral investment
promotion and protection agreement (BIPPA) with Mexico in 2007 for promotion of free
investment.
7

2.3) PRODUCTS EXPORTED BY INDIA:

7

http://business.mapsofindia.com/sectors/exports/

(http://www.tradechakra.com/indian-economy/exports/index.html)
(http://www.dnb.co.in/Exporters/Key%20Highlights.asp)

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Exports have boosted the growth of Indian economy substantially and Indian exports in the
current year have earned nearly US $ 125 billion and is expected to earn US $ 160 billion for the
next fiscal year.
The major export products of India include;

Leather
Medical appliances
Equipments
Textiles
Others
LEATHER GOODS:

India has developed over the years to become a key player in the export of leather goods and
accessories

among

the

major

export

products

of

India.

India exports numerous leather products for daily use like leather wallets, belts, key holders,
folders, pouches, leather toys, handbags etc. Gift items made of leather such as Leather
notebooks, decorated leather journals, key rings, rugs are quite popular in foreign countries.
A large number of small scale, medium scale as well as large scale companies in India are
engaged

in

the

export

Sharie International

Islam International

Indobest

of

leather

goods,

the

list

of

such

companies

include:

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Falcon International

Z.N.T International

Balaji Impex Private Limited

Paradise Noble Creations

Asian adores

The Lotus Handicrafts

New Era Overseas

Medical Appliances

Indian medical appliances have made their mark in the foreign countries on account of superior
quality and variety. Common medical appliances exported from India include absorbent gauze,
sterile gloves, crepe bandages, gauze sponge, surgical face masks, surgical caps, and surgical
disposables. Export of specialized medical appliances have also gained importance among major
export products of India and appliances such as baby incubator, automatic vertical autoclave, air
ionisers,

nelaton

catheter,

digital

video

colposcopes,

digital

imaging

softwares.

A large number of small scale, medium scale as well as large scale companies in India are
engaged in the export of medical appliances goods, the list of such companies include:

Nidhi Meditech Systems

Coral Marketing

Narang Scientific Works Private Limited

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Relique Technologies

Surya Surgical Industries

Chatterjee Surgical

United Surgical Industries

B. L. Life sciences Private Limited

Paramount Surgical Emporium, Delhi

Magnum Medicare Pvt. Ltd.

Textiles goods:

Textile goods have gained prominence among the export products of India; designer garments for
ladies as well as gents manufactured by the big houses in India have created huge demand in the
International garment industry. The popular ladies garment include knitted tops, embroidered
salwar, sequin work blouses, sarongs, floral t-shirts, beaded garments, poplin embroidered kurta,
viscose

crape

printed

skirt.

A large number of small scale, medium scale as well as large scale companies in India are
engaged

in

the

export

of

textile

Kshethra Exports

Mirza Fabric Private Limited

Kanha Designs Pvt. Ltd.

goods,

the

list

of

such

companies

include:

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Knitco Fashionns

Boom Buying Private Limited

Revolution Exports

Flying Fashions

Subasri Textile

Vipro Garments

Kewal Impex

Sudharshanaa Tex

Macsam

Equipments:
India caters to the need of varied equipments of the foreign countries, therefore the Indian
equipment industry have grown in leaps and bounds and ranks high among the major export
products of India like conveyor systems, hand pallet trucks, magnetic coolent cleaners, vibrating
screens, EOT cranes, industrial magnetic conveyors, cantilever racks, steel rolling mill plants,
hydraulic stackers, heavy duty pallet rack, pin pulveriser, agitator vessel, rotary vane feeders.
A large number of small scale, medium scale as well as large scale companies in India are
engaged

in

the

export

of

equipments,

the

list

of

such

companies

include:

Orton Engineering Private Limited

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A.S. Precision Machines Pvt. Ltd.

Dewas Techno Products P Ltd.

Metal Storage Systems Private Limited

Yagnam Pulverizer Private Limited

Elegant Engineers

Metro Engineering Industries

Jai Gopal Engineering Works Private Limited

8

2.4) INDIAN EXPORT IN 2012-2014:

http://business.mapsofindia.com/sectors/exports/major-products.html)

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Indias Export from 2013-2014. In April 2014, it reached maximum to 29578.5 USD Million and
in the end of 2013 in was on the lowest point i.e. 24613.29USD Million.

2.5) Regional export patterns:

9

(http://www.tradingeconomics.com/india/exports)

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Maximum number of exporters located in the western region. Expectedly, the western
region of India, with 39% representation, accounted for the maximum number of
exporters.

Followed by 29% southern-based exporters

26% northern-based exporters

Maharashtra in the western region, Tamil Nadu in the south and Uttar Pradesh in the
north emerged as a strong base for a sizeable number of exporters.

Majority of exporting companies from the north, west and south regions are from the
engineering sector, accounting for 26%, 32% and 22% respectively from the total
sample for each of these regions.

Exporters from the leather industry dominated the eastern region sample, with a 25%
representation.

More than 50% of the exporters in chemicals, IT, pharmaceuticals and textile sectors
were public limited entities.

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10

2.6) TOP TEN EXPORTERS OF INDIA:

1) Oracle Financial Services Software:
Oracle Financial Services Software Limited (OFSSL) is a world leader in providing IT solutions
to the financial services industry. The company has a large exposure to foreign financial
companies which contribute 96 per cent of the revenue to the company. The company addresses
the entire financial services space through a comprehensive portfolio of products, IT services,
consulting and knowledge process outsourcing services with an experience of delivering valuebased IT solutions to over 810 financial institutions across 130 countries. The company also has
strong alliance and/or implementation relationships with industry leaders such as HewlettPackard, IBM, Sun Microsystems and Intel.
2) Opto Circuits:
Opto Circuits is a technology-based electronics company engaged in design, development,
manufacturing, marketing and distribution of medical electronic devices and medical monitoring
products. Opto Circuits offers technological advanced medical devices that are proprietary in
nature, improve patient safety and care and reduce healthcare costs. It offers a broad range of
more than 100 medical devices across 17 clinical categories spread over 12 medical fields. It has
sales in 56 countries and operations in India, Germany and the US. Of its total sales, around 95
per cent of the revenue comes from exports while the remaining comes from the domestic
markets.
3) INFOSYS:
Infosys, the second-largest software making company, generates 94 per cent of the revenue
through exports. The major exporting countries are the US (63.9 per cent) and Europe (21.9 per
cent) that together generates almost 85 per cent of the export revenues while the rest comes from
10

(http://www.tradingeconomics.com/india/exports)

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India (2.2 per cent) and some other countries. The companys revenue comes from providing
various IT products and services catering to sectors such as BFSI, manufacturing, retail, life
science, energy and communication services.
4) TCS:
Tata Consultancy Services, part of the Tata Group that is one of Indias largest industrial
conglomerates and most respected brands, is an IT services, business solutions and outsourcing
organization that delivers real results to global businesses, ensuring a level of certainty that no
other firm can match. TCS offers a consulting-led integrated portfolio of IT and IT-enabled
services delivered through its unique Global Network Delivery Model (GNDM), recognized
as the benchmark of excellence in software development. Of its total sales, 91 per cent of the
revenue comes from exports while the remaining is derived from the domestic markets.
5) Divis Lab:
Divis Laboratories is engaged in the manufacture of generic active pharmaceutical ingredients
(APIs), custom synthesis of active ingredients and other specialty chemicals such as peptides and
nutraceuticals. The company has three multi-purpose manufacturing facilities with a total reactor
capacity of 4,500 cubic meters and all support infrastructures such as utilities, environment
management and safety systems. The company in a matter of short time has expanded its breadth
of operations to provide complete turnkey solutions to the domestic Indian pharmaceutical
industry. Of its total sales, more than 90 per cent of the revenue comes from exports while the
remaining comes from the domestic markets.
6) Rajesh Exports:
Rajesh Exports Limited (REL) is the largest gold jeweler manufacturer in the world and also the
countrys largest exporter of gold jeweler with a market share of around 40 per cent. Shubh
Jewelers is the retail brand of the company. Of the total sales, around 85 per cent of the revenue
comes from exports while the remaining is from the domestic markets. REL exports plain gold
jeweler and studded gold jewelers mainly to the US, UK, Singapore and the UAE. It is also the
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only Indian company to be recognized by the Government of India as a Five Star Export House
in the field of gold jewelers.
7) Tech Mahindra:
Tech Mahindra provides information technology (IT) services to the telecommunications
industry worldwide. Tech Mahindra, with 84.75 per cent exports of its sales in FY11, arrives at
number seven in our list. A majority of its stake is owned by Mahindra & Mahindra Limited in
partnership with British Telecommunications Plc. Tech Mahindra serves telecom service
providers, equipment manufacturers, software vendors and systems integrators. The company
recently completed the merger of Mahindra Satyam with itself. This merger has made Tech
Mahindra the sixth-largest IT service provider with top line of Rs 5,490 crore and a workforce of
75,000.
8) Aban Offshore:

Aban Offshore provides drilling and oil field services for the offshore exploration and production
of hydrocarbons to the oil industry in India and internationally. The company is also involved in
wind power generation activities. It owns and operates 15 jack-up offshore drilling rigs, two drill
ships, one floating production platform and one jack-up rig and a drill ship on bareboat charter. It
also operates 165 wind energy generators. The company earned around 84.39 per cent of its
revenues from exports in FY11, making it the eighth in the list. This takes the total export sales
to above Rs 1,004 crore.
9) Sesa Goa:
Goa-based Sesa Goa is Indias largest private producer and exporter of iron ore with operations
in Karnataka too. The company produces 18.8 MT of iron ore and receives 80 per cent of its
revenue from exports and the rest through domestic sale. At present the company seems to be
facing severe problems due to the ban on iron ore mining in Karnataka and the increase in export
duty. The iron ore mining ban in Karnataka has stopped the company from producing iron ore
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and the concerns have now shifted to the Goa mines as an appointed commission has submitted a
report with regards to illegal mining taking place in Goa. Sesa Goa has a major mining operation
in Goa that almost contributed 80 per cent of the total production of the company in FY11.
10) Dr. Reddys Lab:
Dr. Reddys Lab was established in 1984 and is an integrated global pharmaceutical company,
committed to providing affordable and innovative medicines for healthier lives. It operates in
three segments viz. pharmaceuticals and active ingredients (PSAI), global generics and
proprietary products. Their major markets include India, USA, Russia and CIS, Germany, the
UK, Venezuela, South Africa, Romania and New Zealand. Of the total sales, around 72 per cent
of the revenue comes from exports while the remaining from the domestic markets.

(2012 data)11
11 http://www.dsij.in/article-details/articleid/4476/top-ten-exporters-of-india.aspx)
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3) PUNJAB

Punjab state is located in northwestern India, bordered on the north by Jammu and Kashmir and
Himachal Pradesh, on the east and south by Haryana, and on the west by Pakistan. Punjab covers
an area of 50,362 sq. km. Punjab is basically an agrarian economy. However, the importance of
agriculture sector in Punjab economy has declined over the period. The Gross State Domestic
Product (GSDP) of Punjab was US$ 40.6 billion in 2009-2010. The compound annual growth
rate (CAGR) of GSDP from 2001-02 to 2009-2010, was about 11.8 per cent.
Punjab ranks 13th amongst all the Indian states in terms of GSDP. Agriculture and services are
the two sectors that drive the states economy. According to the Planning Commission of India,
the state ranks amongst the top five states interims of per capita income.
Punjab has a very high purchasing power, highest per capita consumption of power and a
large consumer durable market. The Government of Punjab is promoting the development of
several special economic zones (SEZ) across Punjab.
Punjabs total exports of industrial items in the year

1995-96 were 2564.61 crore

2001-2002 these exports were 4407.90 crore

2008-09 exports were to the tune of 13888.29 crores

15972.48 crore during the year 2009-2010.

The main items of export from the State are;

Yarn & Textiles

Readymade Garments and Hosiery

Sports Goods

Engg. Goods

Cycle& Cycle Parts

Hand Tools

Drugs
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Ludhiana, Jalandhar and Amritsar account for around 90 per cent of the total exports of
Punjab. (Statistical Abstract of Punjab 2010)
12

12 Synopsis pdf
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3.2) INDUSTRIAL CLUSTERS OF PUNJAB:

Ludhiana
Amritsar
Jalandhar
Patiala
Phagwara
Batala
Goraya
Mandi Gobindgarh
Mohali
Dera Bassi,
Chanalon
Rajpura
Goindwal

3.3) MAJOR INDUSTRIES OF PUNJAB:

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Hosiery/Ready-Made garments
Yarn and Textiles
Cycle and Cycle Parts
Sports Goods
Electronic Goods
Auto Parts
Hand Tool/Machine Tools
Chemical/Pharmaceutical
Food products
Leather/Rubber Goods.

13

3.4) COMMODITY WISE EXPORT FROM PUNJAB:

13 Synopisis pdf
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14

3.5) SWOT ANALYSIS OF PUNJAB:

14
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 STRENGTHS:
.1 Geography and Societal Parameters
Relatively flat alluvial land, almost all of which is easily amenable to economic utilization
Administratively compact.
Access to waters from the extensive river system and aquifers originating in the Himalayan
foothills although diversion of dam water outside the Punjab river basin and over-exploitation of
water in agriculture has lowered the water table of groundwater at a rapid pace such that over 85
per cent of the agricultural blocks in the state are over-exploited or dark.
Despite some in-migration of farm and factory labor, the problem of slums in urban areas is
relatively contained.
Located on the potentially active trade route to Pakistan and Central Asia, when reactivated.
2 Economic and Infrastructure Strengths
Among the highest per capita income states in India.
Led the country in the Green Revolution and in the adoption of improved agricultural
practices.
Extensive development of agricultural markets and networks and some success in new kinds of
contract farming.
With its extensive road network, Punjab has the highest road density (105 km of surfaced roads
per 100 square km. of geographical area as on 2002) amongst 36 major states. This is much
higher than the national average (43) and also higher than the other economic frontline states,
such as Tamil Nadu (97), Maharashtra (68), Gujarat (63), Haryana (60) and Karnataka (54).
Has the highest railway networks for the geographic area.
Consumption of electric power in Punjab is the highest amongst the major states of India. In
2005/06, per capita power consumption (utilities and non-utilities) in Punjab was 1437 units
compared with the national average of 631 units. In comparable economic frontline states, the
level of consumption was lower Gujarat (1284), Haryana (1090), Tamil Nadu (977),
Maharashtra (934) and Karnataka (720).
3 Social Infrastructure Strengths
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 Low poverty & relatively superior nutritional and health indicators in comparison to other
parts of the country.
Educational infrastructure which is among the best of Indian states. By 2001, 96 per cent of the
habitations were covered by primary schools within a distance of 1 km.
Female literacy rate at 63 per cent in 2001 was superior to the national average (54 per cent) as
also that of most other economically frontline States Karnataka (57 per cent), Haryana (56 per
cent), Gujarat (58 per cent) and comparable to Tamil Nadu (64 per cent) and a little behind that
of Himachal (67 per cent) and Maharashtra (67 per cent).
Ease of access to government health care facilities for rural areas in Punjab is the highest (62
per cent) among the major states. It is much lower (24 per cent) than the national average of 41
per cent for urban areas.
37
4 Tradition of trade, business and industry
Cotton mills, grain processing, sugar manufacture and the processing of agricultural materials
such as oilseeds, as also metal working and leather products, have had a long history in Punjab.
Hard working and innovative workforce that has been able to build a positive reputation both
within the country and in several parts of the world.
There exists a large pool of potential entrepreneurial talent that can push the industrialization
of Punjab, provided the business atmosphere is perceived to be conducive.
Strong potential for IT, Biotechnology and healthcare sectors.
WEAKNESSES
1 Geography
Landlocked and located in a corner of the country with associated disadvantage in terms of
sources of raw material and markets (domestic and overseas), and border with Pakistan with a
history of military conflicts. The dedicated rail freight corridor and the building of at least 2
international airports and a few small airports should help overcome this limitation, while peace
with Pakistan in the medium run could turn the border area handicap into an opportunity.
Agricultural advancement and the general prosperity has meant that land prices are higher than
in other parts of the country, with adverse implications for the conversion of land to industrial
use.
Urban infrastructure is not commensurate with the relatively high levels of income in the state.
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2 Social Indicators
The quality of education remains a major problem. Despite having relatively higher average
incomes and good quality infrastructure, the educational attainment of Punjab is only slightly
above the national average. Recent nationwide surveys on learning achievements conducted by
the NCERT show learning achievements at the school level in Punjab to be consistently below
the national average.
Weak and malfunctioning public system of delivery of education and health.
The male literacy rate at 75 per cent in Punjab is the same as the national average, but lower
than that in Maharashtra (86 per cent), Tamil Nadu (82 per cent), Gujarat (80 per cent) and
Haryana (78 per cent). The female literacy rates are better than the national average and that of
most other states.
Punjabs sex ratio at 876/1000 after Haryana is the worst among all the states. It is not only
much lower than the sex-ratio of 933/1000 for India as a whole but has also declined between
1991 and 2001. Even worse, Punjab has the lowest child sex ratio (798/1000) of all the states and
this has also declined continuously since 1981. Out of the 10 districts with the lowest child sex
ratio in India, 7 are from Punjab.
A major problem of drug addiction among young male population in Punjab.
3 Administrative Apathy
Perceived indifference amongst the different departments of the state government to the needs
of business. This may be a legacy from the days when Punjab was rocked by terrorism and the
civil service functions had less priority, leading to a comfortable non-activist approach, which
seems to have become somewhat institutionalized.
Excessive requirement of time in following-up with public offices and the multiplicity of such
offices and points of interaction. The Udyog Sahayak System of "Single Window" system has
just not worked.
"Inspector-raj is still perceived to be deeply rooted.
The strained condition of the states finances is widely known, and continuation of populist
policies further undermines any confidence that business may develop in the capacity of the state
government to do anything about improving the prospects for business in Punjab.
4 Weak industrial policy regimes

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 Punjab has all along had an agrarian focus and the state is perceived not to have much interest
in promoting industrial activities. This weakness has become more pronounced in the economic
environment of the past 15 years or so when many state governments are proactively pursuing
private investment in thrust areas where selected industries can be made globally competitive.
Punjab has not amended its APMC Act, while several other states have been more pro-active in
revamping their legislation. The Government of India has circulated model rules to be notified in
this regard. Punjab must allow the private sector in trading in agricultural produce if agro-based
industry is to be given a thrust, leading to greater income generation and prosperity of the states
farm sector and farmers.
A large part of the small scale industry (SSI) in metal products which came up in Punjab during
the seventies and the eighties was greatly dependent on the Freight Pool Equalization Policy for
iron & steel. With the termination of this policy, many of the SSI units saw their businesses turn
uneconomic. To make matters worse for the industry of Punjab, the termination coincided with
the period of terrorism and the period of the collapse of export markets in the former USSR,
which affected the hosiery and woolen textiles industry in Punjab. Industrial policy of the state
government did not adequately focus on the need to facilitate a process of modernization so that
the SSIs could refocus their businesses.
Earlier octroi, and now entry tax, are levied by the government of Punjab which discourages
industrial activity in the state which relies for its industrial raw materials and markets outside of
the borders of Punjab5. Having an entry tax on industrial raw materials entering the state means
that the cost of production of all units located in the state goes up and their competitiveness is
further eroded. Since most other states do not have these levies, this is a wound inflicted on the
competitiveness of industry by the government of Punjab.
The fiscal concessions granted by the Government of India to the neighboring hill states have
led to a movement of industrial activity away from Punjab to these states, e.g., Himachal Pradesh
and Jammu.
Loss of credibility because of repeatedly announcing industrial subsidies of different kinds and
failing to disburse because of resource constraints; the fine print in the Industrial Policy of 2003
that subsidies will be paid only if funds are available has also undermined the creditability of the
government.
5 Infrastructure Deficits
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 The indices of infrastructure facilities for Punjab "look" better than those for other states, but
this comparison is deceptive. Punjab's dependence on air transport, railways and road network is
much greater than many other states, given its landlocked nature.
Although the power deficit both energy and peak demand for Punjab is around the median
of all the states, this is because industrial growth has been much slower in Punjab, than in other
comparator states.
Punjab has not been active in promoting Public Private Partnership (PPP) models for the
development of infrastructure projects. This is an area where the state can clearly do more and
thereby broaden the pool of capital and expertise in improving the states infrastructure.
Dominance of small scale industrial units in the landscape of the state creates demand for
industrial infrastructure. The strained condition of the states finances serves to undermine
confidence in the states ability to provide industrial infrastructure for small scale units.
Unsatisfactory performance in infrastructure creation with assistance under the Schemes
available from the Government of India.
Little state institutional support for industry. Quality Marking Centers and Industrial
Development Centers are facing closure. PSIDC and PFC have lost their relevance.
6 The Challenge of upgrading skills
Punjab has been slow to take advantage of the National Level Skills Mission to upgrade the
infrastructure of its ITIs to address the manpower needs of industrial sector of Punjab.
There is also an urgent need for other institutional mechanisms for providing vocational
education to endow the youth with skills that are in demand in the market.
If Punjab is to make knowledge-based industries as a thrust area for development, then there is
need to expand and significantly improve the base for higher education.
OPPORTUNITIES
1 Agro-based Industry
Any strategy to advance industrialization must exploit the clear advantage that Punjab has in
the farm sector. It produces wheat, paddy, other grains, oilseeds, cotton, sugarcane, fruit,
vegetables, milk, honey and other animal husbandry products. This provides a strong base of
supply of myriad inputs for food processing, dairy and other agro-based industries.
The nexus between industry and agriculture can help disseminate best technology and best
practices to farmers and thus symbiotically help both the farm sector and the industrial sector.
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 The development of agro-based industries and longer-term contractual arrangements for

purchase of produce (as well as the marketing of best quality seed etc.) has the potential of
greatly reducing economic uncertainty for both the farmer and the industrial user.
The entry of large business houses into the retail and distribution chain for farm products, opens
up the opportunity of using these large professionally run companies as instruments for bringing
the best technology and practices to the farm sector of Punjab. A highway for moving not just
technology in the form of better quality seeds, but also practices that raise the efficiency of water
and fertilizer use, check soil quality and offer remedial measures and other technical support
programmes for farmers, will greatly complement and enhance the efforts of existing
government agencies.
As modern retail leads to investment in logistics, cold chains and warehousing facilities, this
will encourage agricultural diversification away from food grain into high value vegetables and
fruits, which will also help in the conservation of water resources as area under paddy is reduced
and will help improve soil quality through crop rotation.
2 Cotton and Other Textiles
Punjab is a major grower of cotton and has a long established industry of cotton spinning and
weaving.
The cotton-to-finished-product chain needs to be advanced through greater efforts at improving
the cotton economy and facilitating the expansion of all downstream activities, particularly the
manufacture of made-ups and apparel. There is a rapidly growing domestic as well as overseas
market for these products.
The textiles industry of Punjab already has wool and acrylic fiber base. To sustain the thrust
on textiles, some balance with manmade and blended fiber products will have to be maintained
to cater to an expanding market for manmade and blended textiles.
The facilitation and assistance to the multiplication of Textile Parks is vital to consolidate and
expand the textiles base in the state.
4 Automotive Components
The auto-components industry of India is likely to grow rapidly, given its global
competitiveness, and this has strong implications for employment and income generation in
Punjab.

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 Punjab has an automotive component industry which caters largely to the lower value
replacement market. This is partly the result of no significant automotive producer having set up
manufacturing base in the state since the economic reforms were launched in India in 1991.
The state government must adopt an imaginative plan to attract modern automotive components
manufacturers to set up capacity in the state, while at the same time seeking large scale
investments in the automotive sector.
5 Bicycles and Components
Punjab is a major centre for the manufacture of bicycles, around which there is a large
community of component manufacturers. The state accounts for over three quarters of the
bicycle component manufacture in the country. Between 1994 and 2000, the output of bicycles in
India stagnated at around 11 million units and has since risen only marginally to over 12 million
units, while Chinas output rose from 40 million to over 50 million units, and has further
increased to 87 million units by 2007. The growth of bicycles in China is driven primarily by the
demand expansion in export markets.
There is a tremendous opportunity in the markets of the industrial countries for high-end
bicycles for health-conscious buyers, since the domestic production of bicycles in these countries
has declined and they are importing mainly from China
. Punjab is well placed to rejuvenate the bicycle industry, geared both to the domestic market
and to the export market. Collaboration with companies from East Asia, e.g., Taiwan, the second
largest exporter, should be used in accessing technological know-how, designs, and market
information.
6 Light Engineering, Machine Tools and Hand Tools
Punjab has a history of light engineering, machine tool construction and metal fabrication.
Most of these units are in the SSI sector and have been rendered uncompetitive by the radical
change in the economic environment in the country and the world.
The hand tools industry in India is mainly export oriented and is concentrated largely in the
small scale sector at Jalandhar and Ludhiana in Punjab and at Nagaur in Rajasthan. Unlike
Nagaur, Jalandhar and Ludhiana export 80 to 90 per cent of their production, specializing in
spanners, hammers, vices, etc. The hand tools manufactured at Nagaur are mostly sold to
dealers/merchants or manufacturers/exporters in Punjab for finishing.

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 Industry clusters/technology parks by providing common facilities and both upstream and
downstream sourcing as well as modern technical testing equipment can greatly improve their
product quality and competitiveness.
Facilitation of technological and commercial linkages with companies in East Asia especially
Taiwan, in similar activities will help provide the local units with improved technology, new
products and wider markets.
7 Leather, Sports Goods and other manufacturing Activities
The leather industry in Punjab is mainly clustered in Jalandhar and specializes in the
processing of buffalo hides into finished leather, which is mostly exported. There are about 50
tanneries, and about 20-25 units are ancillaries and manufacturers of leather products like
footwear, garments and goods.
Compared to other leather clusters like Kanpur and Chennai, the Jalandhar firms have not gone
for forward integration into the manufacturing of products like footwear, goods and accessories,
thus missing out on value added exports.
Clusters and technology park instruments can be used effectively to build on the pre-existing
local business in leather products, sports goods and other manufacturing.
The Ludhiana knitwear cluster is an unorganized cluster of over 12,000 units in the value chain
with around 10,000 knitting units, 500 processing units, 100 machinery manufacturers and 200
spinners, operating mostly in congested residential areas. The cluster employs around 400,000
people and produces an entire range of winter and summer wear including pullovers, T-shirts,
sweat shirts, jackets, caps, track suits, gloves, socks, knitted furnishings, shawls and blankets for
the domestic as well as international markets.
The total turnover of the cluster is estimated at Rs.5000 crores, of which exports account for
around Rs.1000 crores. Ludhiana has 90 per cent share of the domestic woolen market and is a
significant player in the cotton segment. Ludhiana is also a large manufacturer and primary
supplier of cotton knit fabric to units based in Tirupur, Tamil Nadu.
The small scale units in these industries need to be helped in modernization so that they can
increase the scale, quality and design of their operations and finished products.
8 Pharmaceuticals
Punjab has one of the largest Indian pharmaceutical companies domiciled in the state and has
several other companies engaged in the business.
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 There are several colleges for training skilled manpower required for the pharmaceutical
industry.
The state government must focus on enlarging the pharmaceutical and personal hygiene
industrial product space in Punjab.
9 Information Technology and Bio-technology
Attracting large and high visibility investments is crucial to the development of IT within the
state.
IT provides opportunities for the state to embark on a path that maximizes employment
opportunities for its educated youth.
IT is less intensive in the use of land and other natural resources.
Many of the IT entrepreneurs in Punjab are relatively small and there is need to create
facilitation methods by way of which these units can come up in areas where infrastructure is
built and maintained by some form of public private partnership.
The technological orientation of the Punjabi farmer and the presence of pharmaceutical
industry in the state provide a natural base for the development of Biotech (BT) industries in
Punjab.
10 Networking and Gaining from Central Financing Initiatives
Punjab has been slow to make use of the Development Schemes of the Government of India to
foster the advancement of specific sectors in the state, e.g., Textile Technology Parks, Food
Parks, SEZs, Cluster development Schemes, Technology Up gradation Schemes, etc.
A more pro-active approach is needed to exploit the opportunities and utilize the funding
provided by the Government of India under these schemes.
THREATS
1 Geo-political
Being a border State, Punjab has had a long history of suffering from the hostilities that have
often come from our western neighbor. However, this has not been a major factor in recent years.
Although bilateral relations with Pakistan have considerably improved, the continuing difficult
conditions in Pakistan and also Afghanistan continue to hold concern for Punjab.
2 Comforts and Self-Satisfaction
Punjab is a relatively rich state with one of the highest per capita incomes among the states of
India. This comes in part from the relatively advanced farm sector and a small business and
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trading community, as also the larger number of prosperous Punjabis who are resident in other
parts of the country and also overseas. This has resulted in an excessive focus on real estate
opportunities which appear to be enormous. The expectations of the nature of the job
Opportunities are also higher than they might be in other states. In consequence, greater
emphasis needs to be placed on the quality of life parameters when seeking to create
employment opportunities, especially for rural youth.
The buying power of the Punjabis has boosted real estate development, both housing and
commercial. The increase in the price of both urban and rural land has put a lot of disposable
income in the hands of many.
This has created a false perception that the economy will continue to grow with no evidence of
great distress in most sections even if the industrial sector does not take off.
There is also widespread skepticism about the possibility of the materialization of any
significant improvement in the outlook for industry based on expectation of little change in
official policy and bureaucratic attitude.
There is a simultaneous sense of complacency and cynicism.
If business continues as usual, Punjab would continue to fall relatively behind the Western and
Southern states which are moving ahead at an ever faster pace, and are rapidly closing on
whatever distance exists between them and Punjab in terms of income.
It is extremely important for Punjab to get moving, not to address acute poverty or
backwardness but to be able to seize on the full gamut of opportunities that the rapidly growing
Indian economy is placing on offer for those who are willing to take the trouble of exploiting
them. Only then can Punjab ensure the leadership role that it has had in economic development
and broad-based prosperity within India.
3

Pressure on Natural Resources especially soil and water

The manner in which the wheat-paddy cycle has been taken forward and the associated excessive
exploitation of groundwater has placed the bounty of naturally fertile land and water abundance
in Punjab in jeopardy.
This trend has to be reversed so that the natural vitality of the farmland of Punjab is restored.
Recharging of water resources is perhaps the single most important challenge facing the
economy of Punjab. A suitable industrial strategy can help fashion a response to this challenge

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which will enhance both the short-term and the longer-term productivity of farming activities in
the state.
15

REFRENCES:

www.innovativejournal.in

15
http://www.unido.org/fileadmin/user_media/Publications/Pub_free/Punjab_industrial_r
eview.pdf)
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http://www.investopedia.com/terms/e/export.asphttp://www.tradingecon
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http://EzineArticles.com/5356745
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http://business.mapsofindia.com/sectors/exports/
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Synopsis pdf
http://www.unido.org/fileadmin/user_media/Publications/Pub_free/Punja
b_industrial_review.pdf

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