INDIAN STATES

Economy and Business

Gujarat

www.ibef.org
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 GUJARAT PAGE 3

CONTENTS

Socio-Economic Profile 5

Employment distribution 5

INFRASTRUCTURE
Physical infrastructure 7
State Wide connectivity through rail road network 8
Water infrastructure 9
Social infrastructure 10
Education infrastructure 11
Telecommunication & IT infrastructure 12
Industrial infrastructure 13
Special Economic Zones 14
Petroleum and Chemicals 15

POLICIES & INITIATIVES

Agro policy 17
Port policy 17
Power plants in Gujarat 18
IT policy 18
Mineral policy 19

BUSINESS OPPORTUNITIES
Agro & Food processing 20
Chemicals & petrochemicals 21
Textile & apparels 22
Engineering & Automobiles 23
Gems & Jewellery 24
Port led development 25
Pharmaceuticals & biotechnology 26
Oil & gas 27
Information technology 28
Export profile of Gujarat 28

DOING BUSINESS
Key apporvals required 33
Average cost of doing business in the region 35

OVERALL STATE COMPETITIVENESS 37

A report by Ernst & Young for IBEF

GUJARAT: AN INTRODUCTION

Situated on the west coast of India, spread over a geographi-

cal area of 196,024 sq km, Gujarat is recognised as one of the
leading industrial states in the country. The state of Gujarat
was created out of 17 northern districts of the former state of
Bombay in 1960.

The state presently comprises 25 districts, sub-divided into 226

talukas; it has 18,618 villages and 242 towns. The capital city of
Gandhinagar is located close to Ahmedabad, which is the key
commercial centre of Gujarat. Other major industrial and com-
mercial cities include Vadodara, Surat, Bharuch and Rajkot.

Gujarat is bound by the Arabian Sea to the west and flanked by

the states of Rajasthan, Madhya Pradesh and Maharashtra to the
north, east and south, and by the union territories of Daman and
Diu and Dadra and Nagar Haveli to the south and south-east.
Gujarat also shares an international boundary with Pakistan on
the north-western side.

The state experiences diverse climatic conditions with mild and

pleasant winters, hot and dry summers and heavy monsoons.

Rich Natural Reserves

Gujarat has the advantage of rich natural reserves of oil and five per cent of the country’s total population. Population den-
natural gas. It is also endowed with a rich and diverse mineral sity is 258 persons per sq km. As of 2005, the state had a birth
base, contributing significantly to the production of minerals rate of 23.7 and a death rate of 7.1, exhibiting a natural growth
such as agate, chalk, perlite, limestone, bauxite and lignite. rate of 16.6.

Socio-Economic Profile
Demographic Indicators
Population Density
Rural population (%)
Urban Population (%)
Gujarat’s sex ratio is 920 females per 1,000 males (2006). The
total effective literacy rate, as recorded during Census 2001, was
69.14 per cent. Literacy rate for males was 79.66 per cent, while
258 per sq. km. for females it was 57.80 per cent.
62.64
37.36 Higher Urbanisation than India

Decadal Growth Rate (%) 22.66 (1991-2001)

Presently, almost 38 per cent of the state’s population resides
Birth Rate 23.7 (2005)
in urban areas vis-à-vis the national average of 29 per cent.
Death Rate 7.1 (2005) Ahmedabad is the most urbanised district in the state with 80.2
Growth Rate 16.6 (2005) per cent of the population residing in urban areas.
Sex Ratio 870 females per
1000 males (2006) Per Capita Income Higher than National Average
Effective Literacy Rate(%) 69.14 (2001)
Increasing industrial activity in Gujarat has led to immense pros-
Occupying just six per cent of the geographical area of the coun- perity for the people, which is reflected in improved standards
try, Gujarat accounts for 16 per cent of industrial production. of living. The per capita income at current prices (2005-06) is
$833, higher than the national average of $627.2.
Demographic Indicators

With a population of over 50 million, Gujarat accounts for

 GUJARAT PAGE 5

SOCIO-ECONOMIC PROFILE

Tertiary Sector – Highest Contributor to GSDP

Increase in Per Capita Income (At Current Prices)
The agriculture sector has provided a strong base for the
2005-06 US$ 833 growth of Gujarat’s economy. Rapid strides in agro-technology
Increase of 15.9%
and food production have played a key role in augmenting the
2004-05 US$ 719 manufacturing and services sectors. Gujarat is India’s largest
producer of castor, groundnut, cotton, banana and tobacco.
100 200 300 400 500 600 700 800 900 1000

Composition of GSDP as per Economic Activity

From Revenue Deficit to Revenue Surplus (US$ million)
Composition of GSDP as per Economic Activity
1000

420
500
20.2%
0
2001-02 2006-07
-500 41.5%

-1000

-1500 -1400 38.3%

Source: Socio-Economic Review 2006-07

n Primary Sector n Secondary Sector n Teritiary Sector
Increase in Per Capita Income of 2005-06 over 2004-05 (Cur-
rent Prices) Source: Socio-Economic Review, 2006-07

Employment Distribution The growth of the services sector has been augmented by
increasing industrial activity.
Manufacturing accounts for the largest employment of manpow- The manufacturing sector has been the backbone of Gujarat’s
er across industries. growth and development. The state’s recognition as a manufac-
turing hub is supported by the presence of more than 312,000
small and 2,200 medium enterprises. Contributing to more than
Employment in public sector establishments covered under the 30 per cent of total manufacturing and exports of Gujarat, the
Employment Distribution across sectors (‘000) small and medium enterprise (SME) sector has played a key role
in shaping the manufacturing industry.
Manufacturing 636
Community Services 590
Transport & Communication 160
The number of factories increased from 12,795 in 2003-04 to
Financial Services & Real Estate 115 13,603 in 2004-05, showing an increase of 6.31 per cent. The
Power, Gas & Water 55 Net Value Added by the factory sector increased from $7.22
Construction 54
Trade & Restaurants 42 billion in 2003-04 to $ 9 billion in 2004-05, an increase of 24.77
Agriculture, Forestry & Fishing 26 per cent. The average daily employment in working factories also
Mining & Quarrying 15 increased from 978,000 at the end of 2005 to 1.03 million a year
0 100 200 300 400 500 600 700 800 later.
Source: Socio-Economic Review 2006-07

employment market information (EMI) scheme was 830,000,
whereas in the private sector it was 860,000 (as on March
2005). Out of the total 1.69 million people employed in the
organised sector, 234,000 (13.82 per cent) were women. The
public sector employed 17.30 per cent of women, while the pri-
vate sector employed 10.45 per cent. Gujarat has the distinction
of being ranked first in placement among all states in India.
Fixed capital employed by the factory sector in Gujarat in-
creased from $21.45 billion in 2003-04 to $21.77 billion in 2004-
05, an increase of 1.54 per cent.
As per the provisional summary results of the Annual Survey of
Industries (ASI: 2004-05), Gujarat ranks second in the country,
in terms of the state-wise percentage share in Net Value Added
by Manufacture generated by the factory sector. This is the 10th
consecutive year in which Gujarat has retained the second rank. Infrastructure Status

Gujarat’s share in the country’s industrial aggregate is:
• 9.97% factories
• 9.56% employees
• 15.59% of value of output
• 13.86 Net Value Added
Source: Gujarat Socio Economic Review 2007-08
Fiscal Management
The state has been witnessing robust financial growth with the
revenue deficit decreasing from $935.37 million in 2004-05 to a
revenue surplus of $417.74 million in 2006-07. The total outlay
has tripled in the 11th Five Year Plan (2007-11), over the 10th
Five Year Plan.
Gujarat has been a pioneer in undertaking initiatives for holistic
development, and has made major strides in augmenting physical
and social infrastructure. Along with establishing a nodal agency
for infrastructure development through private participation,
Gujarat was the first state to enact the Private Sector Participa-
tion (PSP) law. It was implemented as the Gujarat Infrastructure
Development (GIDB) Act (1999).
The state’s rapid industrial growth has been ably supported by
adequate infrastructure in order to maintain balanced regional
development. Further, the increasing number of investments
by key foreign and domestic players in the state supports the
capability of the existing infrastructure to sustain these large
scale projects.

For fiscal 2007-08 as per the budget estimates, the receipts on

revenue account are estimated at $8.24 billion, while the total
outgoings on revenue account are placed at $7.83 billion, leaving
a surplus of $412.75 million under revenue account.

The proposed outlay for the Eleventh Five Year Plan (2007-12)
of the state has been fixed at $26.73 billion by the National
Development Council. The state aims to achieve annual GDP
growth of 11.02 per cent, agricultural growth of 5.5 per cent and
industrial sector growth of 14 per cent during the plan period.

The state had been allotted a target of 10.2 per cent growth
rate for the Tenth Five Year Plan (2002-07), which is higher than
the eight per cent growth rate at the national level. Gujarat’s
economy has recorded an annual average growth rate of 10.4
per cent for the entire plan period (2002-2007).

The state also has the distinction of having set the highest
growth target of 11.2 per cent in the 11th Five Year Plan.
 GUJARAT PAGE 7

PHYSICAL INFRASTRUCTURE

Ports Infrastructure the process of privatisation of ports, as a result of which capac-

Gujarat’s coasts have always been India’s global gateways for
trade and commerce. The ports of Gujarat form a natural
gateway for the land-locked north and north-central states of
India, whose combined Gross State Domestic Product (GSDP)
constitute almost 25 per cent of India’s total GDP.
ity has increased from 45 mmtpa in 1995 to 163 mmtpa in 2006.
Modern mechanised cargo handling systems have been installed
in all the new ports.
Road, Rail and Air Connectivity

Gujarat has the longest coastline in India of 1,600 km. In order

to avail of this natural advantage, the state has developed 41
ports, including the major port at Kandla. Among the 185 minor
and intermediate ports in India, 40 minor ports are based in
Gujarat.

Ports of Gujarat

Ports of Gujarat

Source: Gujarat Maritime Board

The state is home to six direct berthing commercial ports, 14
direct berthing captive port terminals, 11 lighterage cargo ports
and India’s only Liquid Chemical Port Terminal at Dahej, devel-
oped by Gujarat Chemical Port Terminal Co Ltd. Further it is
home to two of the three Liquefied Natural Gas (LNG) termi-
nals in the country.
Gujarat has an established road network of 74,111 km, including
national highways, state highways and expressways; this is to be
increased to 114,866 km over the coming years.
Roads provide excellent connectivity within the state with a sig-
nificant share (38.2 per cent) of total expressways and national
highways being multi-lane.

Handling a total cargo of 163 mmtpa (million metric tonnes per Category Length (km)
annum) in 2006, Gujarat’s ports handle 25 per cent of the coun- Expressways 93
try’s total sea cargo. National Highways 2781
State Highways 18738
Gujarat is the first state in India to formulate a Port Policy, Major District Roads 20858
which envisaged the development of 10 Greenfield sites. Several Other District Roads 10599
policies introduced by the state government provide tariff free- Village Roads 21042
dom, long-term commercial arrangements, concessions on port Total 74111
charges and lower land rentals. These policies have augmented Source: Department of Road Transport & Highways, GoG
• 87.9% of the total roads in the state are asphalt surfaced.
• 98.86% village connectivity with all-weather roads, which is
the highest in India;
India’s first national expressway (93 km) is in Gujarat, connecting
Ahmedabad and Vadodara.
The Pragatipath Yojana was introduced by the Government in
2005, to connect tribal belts, coastal, industrial and rural areas
with mainstream areas, with the development of nine high-
speed corridors and widening of highways of corridors (having
a total length of 3,710 km). Phase 1 of the project was initiated
in 2005–06 and around 340 km was developed in 15 districts
involving an investment of $40.7 million. The second phase was
initiated in 2006–07 and is under progress. Around 153.9 km is
estimated to be developed in eight districts involving an invest-
ment of $22 million.
State Wide Connectivity through Rail & Road Networks
An extensive railway network of 5,188 km provides Gujarat with
excellent intra-state and inter-state connectivity. The break-up of
the railway network is shown below:
Railroad Length (km)
Broad Gauge 2,736
Meter Gauge 1,665
NarrAow Gauge 787
Gujarat has 13 airports (the highest in the country) and an
international airport at Ahmedabad.
Airports in Gujarat
Aircraft departures increased from 31,246 in 2005-06 to 38,838
in 2006-07. Similarly, embarking and disembarking passengers
also increased from 1.201 million and 1.168 million in 2005-06,
to 1.641 million and 1.579 million, respectively.
The following projects have been proposed to augment the
available infrastructure in the state:
• High-speed passenger corridor from Ahmedabad to Mumbai.
• Proposed Mumbai-Delhi Dedicated Freight Corridor (DFC)
in which the state has a 38% share (565 km).
Power & Energy Infrastructure
Gujarat has abundant energy and gas resources. It has an in-
stalled capacity of 13,500 MW of power, which includes captive
power generation capacity. This is proposed to be ramped up to
over 25,000 MW by 2025.
The Jyotirgram Yojana was introduced by the government for
socio economic development of rural areas with provision of
24-hour, three-phase electricity supply to villages. As a result,
over 18,000 villages have been supplied with electricity. This has,
in addition, led to an increase in the level of average employment
and reduction in migration from rural areas by 33 per cent.
In addition, several other initiatives have been undertaken to
enhance availability and quality of power supply to rural areas,
such as the unbundling of the Gujarat Electricity Board (GEB).
GEB, established in 1948, was a vertically integrated monopoly
in charge of generation, transmission, supply and distribution
of electricity in Gujarat. For increasing efficiency in operations,
GEB was restructured into independent organisations, as per the
Gujarat Electricity Industry (Reorganisation & Regulation) Act,
2003. The unbundling has led to reduction in transmission and
distribution (T&D) losses from 30.90 per cent (2003-04) to 21.5
per cent (2006-07)
Gujarat has adequate resources to meet the state’s current
energy requirements. However, in order to prepare for energy
security in the future, Gujarat is establishing an integrated state-
wide gas grid, which would be operated on an Open Access
Common Carrier basis. It is the only state in the country to
establish a 2,200 km gas-grid, 1,200 km of which has already
been commissioned, 800 km is expected to be commissioned
by December 2008 and a further expansion of 200 km has been
planned.
Integrated Gas Grid for Energy Security
Besides the existing liquefied natural gas (LNG) terminals at Da-
hej and Hazira, the state proposes to establish two more LNG
terminals at Pipavav and Mundra.
To meet the increasing demand for domestic consumption of
gas, the state government initiated City Gas Distribution proj-
ects. Sabarmati Gas Ltd, a subsidiary of Gujarat State Petroleum
Corporation (GSPC), is engaged in the development of the
project. Supply of gas has commenced through the distribution
networks in Gandhinagar,Vapi, Sarigam GIDC, Hazira, Anand,
Chandkheda, Morbi and Thangadh. Construction work has also
started in some districts, including Valsad, Navsari, Nadiad and
Rajkot.
For the remaining cities, gas commencement is estimated to
begin from the second quarter of 2008. If this momentum is
maintained, it is estimated that over the next five years, approxi-
mately 2 million houses would be connected with the Piped
Natural Gas (PNG) network.

Integrated Gas Grid for Energy Security
Integrated Gas Grid
Current transmission 13 mmscmd
Total Length 2,200 km
Completed 1,200 km
Under Construction 800 km
Source: Gujarat State Petroleum Corporation
GSPC, incorporated in 1979, is India’s only state government-
owned company in the oil and gas exploration & production
(E&P) business. The government of Gujarat holds about 95 per
cent equity stake in the company. The discovery of gas at the
Krishna Godavari basin, off the coast of Andhra Pradesh, has
placed GSPC on the global map. The company currently holds 42
oil and gas fields across the country and has acquired oil and gas
assets in Australia, Egypt and Yemen. GSPC has played an instru-
mental role in the execution of the gas grid project. It already
transmits over 13 mmscmd (million metric stand cubic metres
per day) of gas to industries in various cities.
Water Infrastructure
Several water supply projects, such as the Rural Region Water
Supply Scheme and the Urban Water Supply Programme, which
involve installation of hand pumps and simple wells, have been
implemented in the state. In tribal areas, water supply facilities
are provided to the people with one hand pump per 50 persons.
The government has devised several methods of water conser-
vation in order to replenish the ground water table, as well as
to prevent soil erosion, increase the soil moisture and lower soil
salinity.
GUJARAT PAGE 9
Surface Water 38,100 MCM
Ground Water 12,000 MCM
Total 50,100 MCM
The existing methods of water conservation include:
• 87,179 check dams
• 35,379 bori bandhs (Dams made of sand bags)
• 130,262 khet talavadi (farm ponds)
• 5,551 deepened ponds
The Gujarat Water Users’ Participatory Irrigation Management
Bill, 2007, authorises farmers to constitute Water Users’ Asso-
ciations for management of canals handed over to them (post-
rehabilitation) by the government.
To overcome the uneven availability of water in the state, the
development of a Water Grid was proposed.
The grid is a network of 75,000 km for water distribution for
irrigation purposes. The government plans to cover 75 per cent
of the population through the grid by 2010.
Urban Infrastructure
Conventional fuels such as diesel and petrol are being gradually
replaced by Compressed Natural Gas (CNG), which aims to
ensure better reliability, safety and security to consumers. The
government, as a part of its commitment to create a cleaner,
greener environment, initiated the process of converting all
buses and auto rickshaws into CNG vehicles. In addition, the
government, through public and private bodies, is creating neces- to be 380 km, of which 20 per cent was complete as on August
sary CNG infrastructure for auto gas supply. Currently, 90 CNG 2007.
stations have been constructed in Gujarat and 535 CNG buses
of Gujarat State Road Transport Corporation (GSRTC) are River front development at Sabarmati (Ahmedabad) and Tapi
operational. As on February 2007, 31,513 CNG auto rickshaws (Surat), water supply, sewerage and solid waste management
were plying in the state, out of which 19,866 were new CNG projects are some of the key urban infrastructure projects being
vehicles and 11,647 were converted. Further, in Ahmedabad city, undertaken in Gujarat.
CNG auto rickshaws have been made mandatory.
Key urban reforms being undertaken include:
Proposed CNG Bus Depot and Operation (2007-2008) • Municipal accounting
• Solid waste management
• Energy efficiency

Several investment regions are being developed in the state in a

holistic manner to include social and urban infrastructure along
with industrial infrastructure.

Social Infrastructure

Healthcare Facilities

No. of Registered Doctors (2006)

2006 39,734

2005 39,461

2004 38,013

2003 36,831

2002 35,086

The Bus Rapid Transit System (BRTS) is a part of the Integrated

32,000 33,000 34,000 35,000 36,000 37,000 38,000 39,000 40,000 41,000
Public Transit System, which involves the provision of traffic
solutions, to be implemented jointly by Gujarat Infrastructure Source: Department of Health, GoG
Development Board, the state government, Ahmedabad Munici-
pal Corporation and Ahmedabad Urban Development Authority. Gujarat has taken several initiatives for providing better health-
care infrastructure to its citizens. The state currently has:
With the completion of this project in 2010, the city will be- • 13 Medical colleges
come completely accessible with convenient public transporta- • 1,072 Primary health centres
tion facilities. The total length of the BRTS network is estimated • 7,274 Sub centres
Simulation of BRTS Project • 273 Community health centres
• 85 Mobile healthcare units

The Chiranjeevi Scheme introduced by the government has

proved to be immensely beneficial for maternal welfare. The
scheme involves collaborations between the government and
private sector specialists to provide safe child delivery, primarily
for the socio-economically weaker sections. These services are
provided in remote areas, which record the highest Infant Mor-
tality Rate (IMR) and Maternal Mortality Rate (MMR).

Under the scheme, 68,886 successful deliveries have been ac-

 GUJARAT PAGE 11

complished up to May 2007. Other states such as Uttarakhand,
Delhi and West Bengal, are implementing their own version of
the scheme.
Chiranjeevi Scheme: At a glance
mary education is 39,059 (2005-06). There has been an addition
of 4,357 government primary schools in 2006-07 and to meet
the requirement of these new schools, an addition of 36,583
primary school teachers has also been made. In 2006-07, the
number of new enrolments in primary schools was 94,4432.

No. of Registered Nurses (2006)

Reduction in year-wise drop-out rates (Primary School)
2006 16,816 17.8%
2003-04
31.5%
2005 16,755

2004 16,299
11.8%
2004-05
22.8%
2003 15,801

2002 15,478
5.8%
2005-06
14.0%
14,500 15,000 15,500 16,000 16,500 17,000

3.7%
2006-07
Source: Department of Health, GoG 11.6%

0 5 10 15 20 25 30 35
Maternal Mortality Rate 389 (2005) 172
(Aug. 2007) n Std. 1-5 n Std. 1-7
Infant Mortality Rate 64 (2005) 54 (Aug. 2007)
Source: Department of Education, GoI
No. of Private 801 (till Aug 2007)
specialists enrolled
Kanya Kelavani, a state-wide girl child education campaign, was
No. of deliveries 95,066 (till Aug 2007)
by private specialists undertaken to increase the enrolment ratio and decrease drop
out rate of primary school girl students.
Lives saved under 548 Mothers
Chiranjeevi Scheme and 3,443 New Borns The success of this initiative can be measured as below:
• Increase in net enrolment ratio from 75% to 97%.
Source: Department of Health, GoG • Increase in enrolment ratio of girls to boys from 845 (2003-
04) to 866 (2006-07).

Another initiative, the Vidya Laxmi Yojana, was undertaken to

Department of Health, GoG
The state government’s initiatives in healthcare have been na-
tionally and internationally recognised:
• Chiranjeevi Scheme was awarded the Asian Innovation
achieve 100 per cent enrolment and retention of girls in primary
schools. In the last five years, around 699,000 girls have been
given the Vidya Laxmi Bond.
Number of Girl Children Benefited under Vidya Laxmi Yojana

Award 2006 at the Global Entrepolis Singapore by the Singa-

pore Economic Development Board. 1,10,829
2006-07

• Dataquest e-Governance initiative National Award presented

2005-06
to Commissionerate of Health and Family Welfare for e- 1,54,457

Governance in Integrated Disease Surveillance Project.

Years

2004-05
1,30,000

Education Infrastructure
2003-04
1,51,034

With increasing growth of knowledge-based industries and in-

2002-03
crease in the need for technical manpower, the state is focusing 1,52,409

on the development of a good academic foundation. 0 20 40 60 80 100 120 140 160

Figure in INR Millions

The provisional number of educational institutions imparting pri- Source: Department of Primary Education, GoG
 Telecommunications & IT infrastructure
The number of institutes imparting secondary and higher
secondary education was 7,654 (2005-06). There has been an Gujarat has a well established communication network.
addition in the number of seats in some courses such as Degree
Engineering (1,150) and Degree Pharmacy (720) in 2006-07. Telecommunications Snapshot (October 31, 2006)
Number of Schools
Phones per 100 6.77
Number of Schools population (including
WLL + mobile)
2006-07 39,143
Phones per sq. km. 17.48
(including WLL + mobile)

2003-04 34,786
No. of Internet 146,176
Subscribers
0 5 10 15 20 25 30 35 40
No. of Cellphone 74,13,500
Source: Department of Higher Education, GoG Subscribers
(Increase of 52.89% from
Number of School Teachers (November 30, 2006) November 2005)

216711
Source: Socio-Economic Review, 2006-07
2006-07

2003-04 180130

Telecommunications and IT have played a key role in increas-

Source: Department of Higher Education, GoG ing work efficiency and enhancing public accessibility through
e-governance. Cellular connectivity is 41 for every 100 persons.

More than 500,000 students graduate across various disciplines
every year in Gujarat. The state is already home to leading insti-
tutions viz:
• Indian Institute of Management (IIM)
• Entrepreneurial Development Institute (EDI)
• National Institute of Design (NID)
• National Institute of Fashion Technology (NIFT)
• Centre for Environment Planning & Technology (CEPT)
• Mudra Institute of Communications, Ahmedabad (MICA)
• Institute of Rural Management (IRMA)
• National Institute of Design (NID).
• Indian Institute of Packaging.
• Gujarat National Law University.
• Apparel Export Promotion Council training centers.
A centre of the Indian Institute of Technology (IIT), Mumbai, the
National Institute of Pharmaceutical Education and Research
(NIPER) and Institute of Public Health (IPH) are proposed to be
established in the state.
As a part of the state disaster preparedness, all district head-
quarters have been provided with INMARSAT satellite tele-
phones with the back-up support of transportable V-SAT termi-
nals capable of establishing voice, video and data communication
services within a short span of time. This infrastructure has been
ably utilised during past natural disasters.
Gujarat is the only state with a state-wide area network (Guja-
rat State Wide Area Network-GSWAN), connecting over 2,800
government offices. GSWAN is the world’s second largest IP-
based WAN.
Gujarat State Wide Area Network
Gujarat is the second Indian state to have a Secretariat Inte-
grated Communication Network (SICN) with over 7,500 voice
connections.
The state government has utilised IT for the redressal of citi-
zens’ grievances through State Wide Grievance Attention on
Public Grievances by Application of Technology (SWAGAT).

Another key e-governance project, Integrated Workflow and

Document Management System (IWDMS), addresses the need
 GUJARAT PAGE 13

Gujarat State Wide Area Network

Cluster Classification in Gujarat

17

30

10 13

n Engineering n Textiles
n Food Processing n Chemicals
n Minerals n Others
for streamlining documentation in order to enable functioning of
a hassle-free knowledge-led government. Source: Industries Commissionerate, GoG

The Bhaskaracharya Institute for Space Applications and Geoin-
formatics (BISAG) is a state level nodal agency with facilities in
satellite communications and a dedicated bandwidth for con-
ducting education programmes.
Gujarat Info City, located near Ahmedabad airport, is a well-
equipped hub for IT companies. It has a satellite earth station
with 120 MBPS connectivity, leased data and voice connectivity,
state-of-the-art telecommunication network and a dedicated
ISDN digital telephone exchange.
Industrial Infrastructure
Gujarat has been the first Indian state to enact the Private Sec-
tor Participation (PSP) Law in the form of the Gujarat Infrastruc-
ture Development Act, 1999.
Small & Medium Enterprise (SME) Units
km. The state has over 30 engineering clusters, 13 textile clus-
ters, 10 food processing clusters and seven chemical clusters.
Out of 83 product clusters, many have not only developed their
own raw material sources, but also as markets for selling end
products.
The Cluster Development Scheme (CDS) is a planned assistance
programme for furthering the growth of product clusters. The
cluster approach is being used to systematically improve the
competitiveness of SMEs by creating common facilities, enhanc-
ing market development and strengthening infrastructure facili-
ties.
Product Clusters in Gujarat
Product Clusters

Gujarat’s manufacturing industry is supported by 312,000 small

and 2,200 medium units. The Micro, Small & Medium Enterprises
Act 2006 aims to facilitate promotion and development of SMEs
in a sustainable way. It further empowers the state government
with several discretionary measures to extend assistance to
such enterprises to facilitate their rapid growth.

83 Product Clusters

Clusters have been recognised by the government as groups of

industries manufacturing identical and complementary products
having a critical mass of 50 units, located within a radius of 10

The scheme involves providing assistance for activities such as:
• Modernisation, technology development and upgradation,
quality improvement and training.
• Marketing of products and brand development.
• Networking between units for common facilities, sourcing of
raw materials, testing, quality improvement and spare capac-
ity utilisation.
• Overall productivity improvement.
• Market competitiveness.
• Capacity enhancement.
purpose of establishing units, which would in turn lead to an
increase in manufacturing activities, augment exports and gener-
ate employment. SEZs may be set up in public, private or joint
sector, or by the state government.
Currently, with 51 approved, Gujarat has among the highest
SEZs in the country and the highest geographical area (over
15,000 hectares) under development for establishing SEZs.
Key Sector-wise Break-up of SEZs

The scheme has resulted in the successful development of 20 5

clusters including Ceramics Cluster at Morbi, Brass Parts Clus-
ter at Jamnagar, Fish Processing Cluster at Veraval and Power 11
Looms Cluster at Ahmedabad.
5
Industrial Estates

Gujarat has 202 well-planned industrial estates established by

the Gujarat Industrial Development Corporation (GIDC). They 8
are specific for sectors such as chemicals, electronics, gems, ap-
parels and granite. n Electronics, IT/ ITeS n Engineering
n Pharma n Textiles & Apparels
After assessing the industrial viability of a location, GIDC sets up
industrial estates on non-agricultural land. They are made avail- Source: Industries Commissionerate, GoG
able to companies with the provision of basic physical, social and
commercial infrastructure such as:
• Ready-to-use sheds of various designs and sizes for immedi- Other Sectors
ate commencement of operations.
Specific SEZ Type Number
• Well-developed internal road network.
• Provision for water and electricity. Chemicals 2
• Common facilities including training centres, banks, offices, Power 2
restaurants and conference rooms. Gems and Jewellery 1
• Social infrastructure such as schools, post offices and dispen-
Ceramics and Glass 1
saries.
Biotechnology 1
GIDC makes provisions for sites/ land for solid waste disposal
and common effluent treatment plants (CETPs) at concessional Handicraft 1
rates. Multi Service 3

Source: Industries Commissionerate, GoG

Special Economic Zones

Gujarat has the distinction of being the first state to enact the Spread across the state, there are 40 sector-specific and 11
Special Economic Zone (SEZ) Act, 2004. An SEZ is a specifically multi-product SEZs. While there are two SEZs each in Power
delineated duty-free enclave, deemed to be foreign territory for and Chemicals, Biotech, Gems & Jewellery, Handicraft and Ce-
the purpose of trade, operations and duty and tariffs. ramic & Glass have one SEZ each.

SEZs have been created as designated industrial areas for the Gujarat was the first state to create rules and regulations for
 GUJARAT PAGE 15

SEZs, which covered industrial and labour aspects, including flex- Gujarat. The total length of the corridor is 1,483 km, of which
ible labour laws and exit options. Gujarat has a major share of 564 km (38 per cent).
Some of the key upcoming SEZs include:
The DMIC influence area in Gujarat comprises 62 per cent of
Man days Lost (Figures in 000’000) the total area (18 districts out of 25) and 74 per cent of the
Year Gujarat Maharashtra Tamil Nadu total population (37 million).
2004 1.42 4.86 6.34
2005 1.19 4.89 4.68 At present, for the development of Phase-1 of DMIC, key indus-
2006 1.03 2.41 3.33 trial nodes (Mega Investment Regions and Industrial areas) have
Source: Labour Commissioner, GoG been identified across all the states through which the DMIC is
expected to pass.
Other Sectors
The key industrial regions identified in Gujarat are:
• Ahmedabad-Dholera Investment Region.
• Vadodara-Ankleshwar Industrial Area.

The corridor is proposed so as to have excellent connectivity to

the non-major ports of Mundra, Pipavav, Dholera, Dahej, Hazira
and Maroli.

Among all the MoUs signed during the Vibrant Gujarat Global
Investors’ Summit 2007, 260 projects, worth an investment of
$45.8 billion, are proposed to be established along DMIC.

Petroleum and Chemicals & Petrochemicals Investment

Region (PCPIR)

The PCPIR, an agglomeration of petroleum, chemicals and pet-

The Gujarat SEZ Act, 2004 has made key provisions with respect
to the appointment and termination of labour for units estab-
lished in SEZs.
rochemical industries, is proposed to be developed at Dahej. The
region is rich in natural resources and there is an abundance of
feedstock. Nearby chemical estates include Ankleshwar, Panoli,
Jhagadia, Hazira and Nandesari. In addition, there is abundant
availability of PCPIR-specific infrastructure such as effluent
disposal pipelines, common effluent treatment plants and solid
waste disposal sites. An SEZ is proposed by the GIDC at Dahej
and Jhagadia. A private sector SEZ is also proposed at Vilayat
(Bharuch) by Jubilant, Wockhardt and Khanna Paper Mills. The
development of the PCPIR is supported by the appropriate legal
framework.

The concept of ‘Fixed Term Employment’ introduced by the SEZ
Act has helped in accounting for the least mandays lost due to
labour strife, among comparable industrial states.
Delhi Mumbai Industrial Corridor
The development of the Delhi-Mumbai Industrial Corridor
(DMIC) is a key opportunity for attracting investments into
Gujarat International Finance Tec City (GIFT)
GIFT is an initiative by the state government to capture the
financial market potential that would be generated as a result
of the rapid industrialisation in the state. With huge investments
being committed to Gujarat, several banks and financial institu-
tions are keen to set up base.
For this purpose, a part of the region between the commercial
capital, Ahmedabad and the administrative capital, Gandhinagar,
has been earmarked for the development of a Central Finance
and Business District (CFBD) - GIFT, institutional areas, knowl-
edge parks and integrated townships.

It will have state-of-the-art IT infrastructure such as a fully-

integrated technology backbone, data centre, shared IT services,
WiFi and WiMax. The city will have well-planned residential
housing projects with walk-to-work layouts and high quality
entertainment malls.

The Gujarat Urban Development Co Ltd. (GUDC), in partner-

ship with Infrastructure Leasing & Financial Services Ltd (IL&FS),
is promoting the project on a Public-Private Partnership (PPP)
model through a joint venture company Gujarat International
Finance Tec-City Development Company Limited (GIFTCL). The
project is expected to be completed by 2010.

At present, MoUs for 11 million sq ft of occupancy in GIFT have

already been signed by global financial companies such as Kotak
Mahindra (India), Chescor Capital (UK), Orix (Tokyo), Fairwood
Associates and Sembawang Engineers and Constructors Pvt Ltd
(Singapore).

State Policy and Incentives
Gujarat Industrial Policy – 2003, was introduced with the objec-
tive of transforming the state into an Asian leader, as well as a
strong contender globally, in the context of industrial growth. It
was formulated with the aim of supporting an entrepreneur at
every stage of project implementation. The policy proposes to
address the industry requirements on a long-term basis.
The GIDC is a public sector undertaking set up primarily to
develop industrial infrastructure by acquiring appropriate land.
There were 236 industrial estates at the end of December 2006.
In 2007, the corporation dropped four estates and approved
10 new proposals for industrial estates and decided to expand
eight existing ones. There were 242 industrial estates at the end
of 2007. For the development of industrial estates, GIDC has
acquired about 26,360 hectares of land.
The new policy guidelines have been designed keeping in mind
the requirements of today’s industries.
Key Highlights of the State Industrial Policy include:
• Facilitating access to concrete, speedy and authentic informa-
tion for the benefit of entrepreneurs.
• Upgradation of industrial and urban infrastructure.
• Development of thrust industries.
• Constitution of Gujarat Industrial Promotion Board (GIPB)
to provide single window mechanism for large projects.
• Promotion and development of SEZs and Industrial Parks.
• Flexibility of labour laws in SEZs.
• Power reforms.
• Cluster development for small and medium enterprises:
• Interest subsidy
• Assistance for research & development
• Financial assistance for setting up industrial parks
• Assistance to critical infrastructure projects
• Power tariff incentives
• Human resource development and creation of employment
opportunities.
• Creating a global brand image for Gujarat and its products.
• Strengthening the existing manufacturing base.
• Environment protection.
Agro Policy
The state government offers financial support and incentives for
agro industrial projects under the ambit of infrastructure, mar-
keting, research and development and facilitation of projects.
Development of supply chain infrastructure and support services
for the agro industrial sector has been assigned high priority. The
government will also offer incentives such as six per cent per
GUJARAT PAGE 17
annum back-ended interest subsidy for the first five years from
commencement of operations for projects providing common
infrastructure facilities in the value chain.
The state has initiated a provision for providing support to pri-
vate sector industries, apex cooperative institutions and Agricul-
ture Product Marketing Committees (APMCs) for setting up of
Centres of Excellence/ Specific Crop Development Institutes.
The state is keen to encourage the export of agricultural prod-
ucts from Gujarat by taking key initiatives:
• Development of Agro Export Zones.
• Establishing an Air Cargo Complex.
• Provision of 25 per cent Air Freight Subsidy on agro exports.
• Financial assistance (up to 50 per cent of the cost) to agro
industries for research and development activities.
• Kiosks to be set up at APMCs and Consuming Centres for
connectivity with related departments of agriculture, univer-
sities, industries and international markets.
• Setting-up of internationally recognised testing and accredit-
ing laboratories to encourage organic farming.
Port Policy
Gujarat has the distinction of having the highest number of ports
spread along its 1,600 km-long coastline. With the increasing
inflow of investments expected to influence the further growth
of the port-led industry, the state government has launched a
new Port Policy with the following key highlights:
• Enhancing Gujarat’s share in the national EXIM sector.
• De-congesting the burden on existing ports on the western
coast through efficient facilities and services to support
domestic and international trade.
• Providing port facilities to promote export-oriented indus-
tries and port-based industries, which entail almost 50 per
cent of total industrial investment.
• Encouraging shipbuilding, ship repairing and manufacturing
facilities for cranes, dredgers and floating crafts.
• Promoting coastal shipping for passengers and cargo traffic
between various locations within the state as well as impor-
tant destinations outside.
• Supporting power plants by offering exclusive facilities for
import of different power fuels.
• Encouraging private sector investment in minor and interme-
diate ports and also at new port locations.
Power Policy
Gujarat presently has a capacity of 13,500 MW, which includes
captive power generation. This capacity is expected to be
ramped up to more than 25,000 MW by 2025. Gujarat achieved
a per capita consumption of electricity of 1,354 units for the
year 2006-07, which is more than twice the national average of
665 units.
The total installed capacity of the state as on 31st March 2007
was 9,410 MW. It comprised 4,968 MW by Gujarat State
Electricity Corporation Ltd (GSECL), 2,166 MW by the private
sector and 2,276 MW by the central sector share.
The total generation of electricity in the state including the pri-
vate sector (17,403 MUs) and the central sector (16,602 MUs)
was 61,543 MUs in 2006-07 as against 58,724 MUs generated in
the previous year.
The total consumption of electricity during 2006-07 was 41,513
MUs as against 38,358 MUs in the previous year.
• Encourage power generation by utilising non-conventional
sources.
• De-monopolise distribution of power and invite involvement
of private partners.
The installed capacity of power in Gujarat is expected to in-
crease by 100 per cent (from 10,605 MW to 20,725 MW) over
the next five years.
The demand projected by 2017 is 18,478 MW for the proposed
projects as on date. It is estimated that by 2017 Gujarat will
have a capacity to generate 42,005 MW (double the projected
demand) to meet the requirement of any additional projects due
to rapid industrialisation.
Source: 16th Electricity Power Survey, Central Electricity Authority,
Energy & Petrochemical Department, GoG, Socio Economic Review of
Gujarat, 2006-07

During 2005-06, wind farms with a total capacity of 84.60 MW IT Policy

were installed in the state.
In order to accelerate the development of the IT industry in the
The installed capacity of electricity in Gujarat has increased from state, the government has launched an IT Incentive Policy. This
a meagre 385 MW in 1966 to 9,561 MW in 2007. Gujarat has policy would be reviewed after a period of two years in view of
achieved 100 per cent electrification in all villages. There are 23 the expected rapid technological changes in the industry.
power plants located in the state, which include nine thermal
power plants, nine gas power plants, four hydro power plants Key highlights of this policy include:
and an atomic power plant. • Capital subsidy at a rate of 25 per cent for eligible new IT
units on total eligible capital investment.
Power Plants in Gujarat • Special incentives in the form of a capital subsidy to large
units on a graduated scale.
Power Number of Installed Share in
• Turnover incentive at a rate of five per cent of the eligible
Plants Plants Capacity (MW) Generation (%)
Thermal Power 9 6041 63.18 annual turnover with a ceiling of around $1.2 million.
Gas Power 9 2182 22.82 • Incidence of sales tax on computer hardware, peripherals,
Hydro Power 4 779 8.15 etc., would be reduced.
Atomic Power 1 559 5.85 • A special connectivity incentive where the government
Source: Labour Commissioner, GoG would subsidise leased line rental up to 500 km, to an extent
of 50 per cent of the lease rentals.
Share of different power plants in generation

Giving highest priority to the development of the power sector,

the state has developed a Power Policy to:
• Carry out planning and building up adequate capacity in gen-
eration, transmission and distribution
• Achieve optimum utilisation of existing equipment.
• Rationalise the tariff structure.
• Improve quality of services thereby achieving cost effective-
ness.
• Strive for energy conservation.

Small and Medium Industries
The state government has recognised the need to support and
strengthen existing clusters of small and medium enterprises
(SMEs).
Industry clusters with a minimum of 50 units located within a
radius of 10 km at a particular location will be recognised by the
government as a cluster. The decided norm for the number of
units can be relaxed for certain sectors considering the manage-
rial and technical competence, size and nature of the industry.
The government proposes to provide assistance for the purpose
of assisting the identified clusters in the areas of technology and
product design upgradation, quality improvement, R&D activities,
common branding and marketing facilities, development of com-
mon facilities such as library, testing and certification laborato-
ries, capacity building for workers and supervisors in terms of
skill upgradation and productivity.
The government further provides electricity duty exemption for
the first five years to cluster associations if they set up common
power plants, effluent treatment plants or waste recycling plants.
Mineral Policy
Gujarat is a leading contributor to the national production of
several minerals including agate, chalk, bauxite and lignite.
The state government has established a Mineral Policy with the
objective of:
• Building global competitiveness in all aspects.
• Infusing transparency at all levels of operation.
• Enhancing efficiency by adopting e-governance.
The Policy aims to:
• Invite participation from private sector for mining and explo-
ration.
• Prioritise exploration of lignite in order to meet power
GUJARAT PAGE 19
demand of state as well as fuel requirement of industries.
• Creation of data banks by compiling geological and technical
details of state and central government agencies in the field
of geological survey and mineral exploration.
• Implement environment assessment norms, which would be
constantly monitored in leases of major minerals.
• Promote use of modern technology in mining.
The production of Agate, Steatite and Gypsum during 2006-
07 was 38, 1,105 and 156 tonnes, respectively. Other minerals
included Limestone (22,482 tonnes), Lignite (9,810 tonnes),
Bauxite (3,214 tonnes), Laterite (262 tonnes) and Dolomite
(325,000 tonnes).
Road Policy
Gujarat has a road network of 74,111 km, comprising express-
ways, national and state highways, district roads and village roads.
Gujarat has the distinction of being the first state in India to
have a law governing Build Own and Transfer (BOT) transactions.
The Road Policy proposes to:
• Impart connectivity to all villages by all-weather roads
thereby improving quality of life in rural areas.
• Develop adequate and efficient road system encompassing all
transportation needs to ensure smooth and uninterrupted
flow of goods and passenger traffic.
• Constantly upgrade technology by inducting superior and
quicker construction and maintenance methods.
• Induct scientific principles of resource allocation for mainte-
nance and new construction programmes.
• Set high standards of road safety and travel comforts.
Business Opportunities
Business opportunities offered by any state are dependent on
the investment environment, which is influenced by several fac-
tors.
Availability of Natural Resources
Gujarat has a rich mineral base. The state has a strong agricul-
tural foundation as well. In addition, it is one of the earliest oil/
gas producing states in the country.
Industries such as petrochemicals, which are highly dependent
on availability of natural resources, have flourished in the state.
Capability
The success of several industries are influenced by the avail-
ability of skilled manpower. For instance, the continuous growth
of the diamond processing industry in Gujarat has been ably
supported by the presence of trained manpower.
Further, the labour policy of the state assists in maintaining
harmonious industrial relations. Gujarat has amongst the least
mandays lost – 0.6 per cent of the country’s total.
Proactive Government Policies
The support of a proactive government is crucial for rapid
industrial growth. Implementation of policies is crucial for the
development of upcoming sectors such as biotechnology and
clinical research.
Key Thrust Sectors:
Agro & Food Processing
The agro & food processing industry in Gujarat is well estab-
lished in terms of natural resources, skilled labour, enterprising
farmers and a strong marketing network. During the period
2001-05, the sector witnessed an annual average growth rate of
24.11 per cent. The sector has been ably supported by necessary
infrastructure. As on 31st March 2006, the state was home to:
• 204 Market committees
• 193 Main yards
• 207 Sub-market yards
There is a reporting area of 18.81 million hectares in the state,
of which 9.795 million hectares (52.07 percent) was net area
sown.
Cotton, groundnut, bajra, maize, jowar, tur, pulses, castor and
vegetables are the major Kharif crops of the state. The area
covered under Kharif crops till September 2007 was 8.889
million hectares. The area covered under Rabi crops in January
2008 was 3.426 million hectares, compared to the 3.202 million
hectares sown during the previous year.
The major fruit crops in Gujarat are banana, mango, citrus and
sapota (chikoo). The major vegetables grown are onion, potato,
brinjal, tomato, okra and cucurbit. The state is leading in pro-
ductivity of onions and potatoes. It also produces spices like
cumin, fennel, and garlic. It also enjoys a monopoly in seed spices.
Isabgul is a prominent medicinal plant grown in the state. The
area under cultivation of flowers like rose, lily and marigold is
also increasing.Various aromatic plants like pacholi and pamaroza
are cultivated in southern Gujarat. There is scattered cultivation
of medicinal plants like allovera, sena, and gugal.
Yield of Principal Crops (Kg/Hectare) - Comparison
Groundnut 1393
1081
Total Oil Seeds 1273
898
252
Cotton
229
0 200 400 600 800 1000 1200 1400
n Gujarat n
Source: Socio-Economic Review 2006-07
The diverse agro climatic conditions have facilitated success-
ful introduction of crops like cashew. As per quick estimates,
in 2005-06, the agriculture sector, including animal husbandry
contributed 15.5 per cent to Gujarat’s GSDP.
Overall Agricultural Crop Distribution in Gujarat
In 2005-06, the state contributed a significant share to the na-
tional production of principal crops:
• Highest production of groundnut – 3.39 Million Tonnes (MT)
• Highest production of cotton – 6.77 MT
 GUJARAT PAGE 21

Key Districts in Dairy Sector Key Players in Gujarat

• Second highest production of onion – 2.13 MT

Gujarat also has the distinction of having a higher yield of prin-

cipal crops (groundnut, total oilseeds and cotton) vis-à-vis the
total yield in the country.

Gujarat’s share in World Productivity (MT/Ha)

Banana 14.7
38.9

Castor 0.92
1.98

16.53
Onion
23.37

0 5 10 15 20 25 30 35 40
The National Dairy Development Board (NDDB), headquar-
n Gujarat n tered at Anand, is a key national-level body involved in promot-
ing, financing and supporting milk distribution organisations
The state contributes significantly to the national production in India. The Gujarat Cooperative Milk Marketing Federation
of several other crops including mustard, sesame, pigeon pea, (GCMMF) is a cooperative dairy giant, which sells the Amul and
banana, mango, gram and sugarcane. Gujarat holds a stronger Sagar brands of dairy products through 500,000 unorganised
position vis-à-vis the world average with reference to the pro- retailers and 3,000 distributors.
ductivity of several crops.
GCMMF has played an instrumental role in Operation Flood,
State-owned Gujarat State Seed Certification Agency (GSSCA) popularly known as the White Revolution. GCMMF has clocked
is currently under the process of being accredited by the a turnover of $1.05 billion during fiscal 2006-07, to become the
Agricultural & Processed Food Products Exports Development first billion-dollar cooperative in India; it aims to reach the $2.4
Authority (APEDA) for the purpose of certifying crops culti- billion-mark over the next three years.
vated organically.
Key companies in Gujarat with activities in the agro and food
With a strong base in agriculture, Gujarat has developed into a processing sector include Amul,Vadilal, Rasna, Reliance Industries
chosen location for food processing companies. The state has a Ltd. and McCain Food.
significant number of well-established food processing units:
• 3,700 small scale industrial units. Chemicals & Petrochemicals
• 1,875 working factories.
• 150 large and medium scale units. Gujarat’s chemical and petrochemicals industry is one of the
fastest growing sectors. It accounts for 60.3 per cent of the
Companies based in Gujarat have operations across the entire state’s total industrial production. In March 2006, there were
value chain of food processing in fruits and vegetables, grains and more than 15,000 small scale industrial (SSI) units registered for
whole cereals and consumer food. the production of chemicals.

The dairy industry is one of the key sectors in Gujarat. The state Gujarat’s Share in Petrochemical Industry
stands fifth in India, in terms of milk production.
Gujarat 58.11%

Gujarat’s dairy sector is characterised by the following: Maharashtra 17.68%

West Bengal 11.85%

• 13 district milk producers’ unions
Other States
• Network of 12,991 milk cooperative societies having 2.5 mil- 12.36%

lion members 0 10 20 30 40 50 60

• Total milk production – 18.97 million litres per day. Source: Ministry of Chemicals and Fertilizers, GoI
Contributing 53 per cent (Ministry of Chemicals & Fertilisers,
Government of India, Provisional for 2005-06) to the national
production, Gujarat is the highest producer of major chemicals,
including alkali, organic, inorganic, pesticides, dyes and dyestuff. It
is India’s largest producer of soda ash (100 per cent) and salt (85
per cent). It is also the highest producer of petroleum products
(58 per cent) and chemicals (53 per cent).
The state has over 1,867 factories involved in the manufacture
of chemical products employing more than 800,000 persons
(Annual Survey of Industries, 2004-05).
These factories comprise 13.8 per cent of the total number of
factories in the state and account for around 30 per cent of the
total fixed capital in the industry.
With availability of abundant raw material, Gujarat is the highest
contributor to the total national production of petrochemical
products.
Its development would be supported by the concentration of
chemical and petrochemical industries, availability of rich natural
resources and feedstock, existing physical and specialised infra-
structure, including nearby chemical estates.
Gujarat has the distinction of being home to the largest grass-
root petrochemical refinery in the world (of Reliance Industries
Ltd) with a capacity of 30 million tones per year.
Key Chemicals & Petrochemicals Clusters in Gujarat
Reliance Industries, Nirma, Heubach Colors, Deepak Nitrite,
Lanxess ABS Ltd. and GE are some leading companies with wide-
spread operations in Gujarat. The state also boasts of prominent
public sector units (PSUs) such as:
• Gujarat Alkalies & Chemicals Ltd. (GACL)
• Gujarat State Fertiliser Company (GSFC)
• Gujarat Narmada Valley Fertiliser Company Ltd. (GNFC)

Gujarat’s Share in Major chemicals Companies in Gujarat are involved in activities across the value
chain of chemical and petrochemical production.
Soda Ash 98%
LAB 37%
Acetic acid 50%
Textiles & Apparels
Methanol 37%
Caustic Soda 41%
Ethylene 50% Textile Industry: Statistical Snapshot
Salt 83%
Phosphatic Fertilizers 38% Textile Production 14.2% of India
Polymers 56%
Number of medium 1,560
Nitrogen Fertilizers 20%
and large textile units
0 10 20 30 40 50 60 70 80 90 100 Employment generated 150,000
for organised sector
Source: Ministry of Chemicals & Fertilizers, Government of India
Source: Industrial Extension Bureau, GoG

Gujarat has long been recognised as the country’s textile hub.

The shift has begun from cotton production and non-woven fab-
rics to technical textile garments. The textile industry has largely
contributed to the industrialisation of the state. Development of
several industries such as dyestuff and cotton farming is solely
dependent on this sector.
Producing 8.9 million bales (35 per cent of the total production
in India); Gujarat is the largest producer of raw cotton in the
country. Contributing 60 per cent of total cotton exports, the
state is also the highest exporter of cotton. With 112 cotton/
man-made textile mills, Gujarat ranks third among all states in
the country.

The state has the distinction of being the highest contributor

A designated Petroleum and Chemicals & Petrochemicals Invest-
ment Region (PCPIR) is proposed to be developed at Dahej.
of manmade fibres (31 per cent) and manmade filament yarn
(38 per cent) in the country. With 1,560 medium and large
textile units, Gujarat contributes 12 per cent to national textile
exports. Over 40 per cent of art-silk fabric produced in the
country is from the Surat district alone.

Over 35 per cent of fabrics from the organised sector and 25
per cent from the decentralised power loom sector are from
Gujarat.
In 2005-06, textile units in Gujarat witnessed a 14 per cent
increase in production of manmade filament yarn. With fabric
production increasing from 393,111 sq m in 2004-05 to 438,765
sq m in 2005-06, the sector has recorded an increase of 11 per
cent.
Production of Key Textiles (in tonnes)
Man-made
481267
Filament Yarn
Man-made Fibre 300650
Total SpunYarn 231111
Source: Ministry of Textile, Gol
The state has a widespread network of infrastructure required
for the textile and apparel industry. It has the highest number
of state-owned looms for cotton/ manmade fibre - 6,888 as on
March 31, 2006. It has six million powerlooms. Gujarat also has
the distinction of having the second highest number of privately
owned looms (11,963 as on March 31, 2006) and 45,000 rotors.
It also has around three million spindles in the cotton/ manmade
fibre mills.
Large fabric process houses are concentrated in the two key
cities of Ahmedabad (250) and Surat (350).
Key Textiles Clusters
Technical textile processes begin from raw materials (cotton
production), spinning, weaving and knitting, processing the man-
made fibres and ultimately garments manufacturing. Gujarat pro-
duces six per cent of the country’s garments that are exported.
The state has the distinction of being home to the largest denim
producer in Asia, Arvind Mills (capacity of 100 million metres/
year), and the third largest in the world. Other leading compa-
nies with a presence in Gujarat include Welspun Group, Ray-
mond, Ashima Group and Mafatlal Industries.
Gujarat’s textile industry has operations across the entire value
chain including production of cotton and manmade fabrics,
textile machinery, ginning, weaving, garment manufacturing and
manufacture of technical textiles.
GUJARAT PAGE 23
During the year 2006-07, Khadi worth $4.44 million was
produced, while sales amounted to $8.01 million. The industry
provided employment to 11,962 persons in 2006-07.
Engineering & Automobiles
Gujarat has been actively promoting the development of the
engineering and automobiles industry. The sector has been one
of the key drivers of industrial development in Gujarat, account-
ing for 15 per cent of the total industrial production.
With an average growth rate of 15 per cent, the state contrib-
utes more than nine per cent to the national engineering output.
It also has the distinction of being the largest contributor of
sponge iron (35 per cent).
Share of Gujarat in National Engineering Sector Output
Automotive 3.7%
Electricals 6.2%
Machinery 11.1%
Fabrication 10.8%
Metallurgical 8.3%
0 2 4 6 8 10 12
Source: Industrial Extension Bureau, GoG
Gujarat has over 600 units in the medium and large sectors and
more than 75,000 SSI units in the engineering and auto sec-
tor. The largest plant producing sponge iron (Essar Steel) has a
capacity of 4.6 million tonnes per annum, and there are plans to
expand this to 6.4 million tonnes.
Out of the 83 clusters spread across 16 districts of Gujarat, the
engineering industry has 30 product clusters. The small-scale
industry has emerged as a significant contributor to:
• Foundry, forging and machine tools - with clusters in Baroda,
Bhavnagar and Anand. Forging is principally done in Ahmeda-
bad, Rajkot and Anand, fabrication and machinery production
in Rajkot and Ahmedabad.
• Brass parts
• Oil engines and electric motors
• Submersible pumps
• Industrial valves and bearings
For instance, the Brass Parts Cluster at Jamnagar has over 5,000
small units and meets the entire requirement for brass parts in
India.
As per the Annual Survey of Industries (2004-05), around 18,000 Key Engineering Clusters
persons were employed in the engineering industry across the
sub-sectors of:
• Fabricated metal products.
• Machinery & equipment.
• Electrical machinery.
• Communication equipment.
• Motor vehicles.
• Other transport equipment.
• Medical instruments.
• Furniture.

The engineering and auto industry comprises around 27 per

cent of the total factories, with the highest number being in the
machinery and equipment sector. • Largest exporter of clocks from India with the largest manu-
facturing facility of clocks – Orpat and Samay
Key Engineering Industries • Largest ship-breaking yard in the country is located at Alang
6.28 (recycled 4,240 vessels, weighing about 30.40 million metric
Fabricated Metal 1.03
Products
1.81
tonnes in 2005)

12.51
Machinery &
2.04
Equipments
3.11

2.79
Electrical 2.3
Machinery
1.03

0 2 4 6 8 10 12 14

n No. of Factories (%) n Fixed Capital Investment (%) n Value of Output

Source: Annual Survey of Industries, 2004-05

Gujarat has the distinction of having emerged as an important

production centre for the manufacture of industrial machinery,
including:
• Textile machinery
• Chemical machinery
• Pollution control equipment
• Printing machinery Key players with a presence across the engineering value chain
• Air & Gas compressors in the state include General Motors, Essar Steel, Hindalco
• Ball and Roller Bearings (Aditya Birla Group), Shah Alloys, Larsen & Toubro, Matsushita
Source: Gujarat Socio economic review, 2007-08 and Asia Motors.

Companies with manufacturing operations in Gujarat have Gems & Jewellery

well-established strengths across the entire span of engineering
products:
• Largest producer and exporter of SAW and ERW pipes
• Largest manufacturer of material handling equipment in India
– Elecon Engineering Ltd
• Largest producer of earth moving equipment – Gujarat
Apollo Equipment
• Largest manufacturer of glass shells for production of TV
tubes – Videocon International
Gems & Jewellery is one of the fastest growing sectors in the
country. This industry is well established in Gujarat and is sup-
ported by policy initiatives from the government. In addition
to cutting and polishing of diamonds, processing and jewellery
design has also gained prominence.
The industry specialises in both hand-made jewellery in tradi-
tional as well as modern designs; other strengths include low

cost of production and easy availability of skilled labour.
Gujarat has the distinction of being the world’s second largest
producer of gold jewellery. It contributes the highest share (85
per cent) to the total national jewellery production.
A cluster located in Ahmedabad, specialising in the manufacture
of gold jewellery has a labour productivity of around 50 gm of
production per day per labourer, which is the highest in the
country.
Gujarat is renowned for the production of unique hand-made
silver ornaments, which constitute 85 per cent of the total silver
jewellery production of India.
The state has the distinction of contributing 90 per cent of
the total diamonds processed in the country. Of these, 90 per
cent are processed in the 10,000 diamond units located in and
around Surat. With eight out of 10 diamonds in the world being
polished in Surat, it is known as the ‘Diamond Capital of the
World’. It has the world’s largest diamond processing hub with a
72 per cent world share and 80 per cent of the Indian market. In
2004-05, Gujarat contributed 80 per cent to diamond exports.
Leading companies in the state include Sanghavi Diamond
Exports, Gitanjali Gems, Harikrishna Exports,Venus Jewels and
Bhavani Gems.
Port-Led Development
The state has taken several pioneering initiatives in the develop-
ment of the port-led sector, such as:
• Development of India’s first privatised port in 1992 (Pipavav
Port).
• Announcing of the First Port Policy in the country.
• Establishment of the first LNG terminal at Dahej by Petronet
LNG Ltd.
• Development of the first chemical terminal at Dahej by Guja-
rat Chemical Port Terminal Company Ltd. (GCPTCL).
• Development of the deepest draft multi-purpose port at
Mundra by Adani Group.
• Development of the first private sector port rail linkages.
• Establishment of the largest ship recycling yard with hazard-
ous waste management facilities at Alang.
The strained capacity of the major ports is resulting in increased
berthing timings. This is leading to a rapid growth of the non-
major ports. Upcoming non-major ports are being developed as
captive ports for catering to the needs of specific companies.
GUJARAT PAGE 25
With non-major ports being under the jurisdiction of the state,
the Gujarat government has the freedom to facilitate fast-track
clearance and establishment of ports, particularly through pri-
vate participation.
Gujarat also has the advantage of a vast hinterland consisting
of key northern and central states such as Rajasthan, Mad-
hya Pradesh, Uttar Pradesh, Delhi, Haryana, Punjab, Himachal
Pradesh and Jammu & Kashmir. These rapidly developing states,
contributing 35 per cent to the country’s total exports, are
potential customers of Gujarat’s ports. The combined State
Domestic Product (SDP) of these states contributes a significant
25 per cent to the country’s GDP. Export of surplus foodgrains
from these leading grain producing states and import of fertiliser,
offer great potential for growth of cargo in the near future.
It has been observed that a large portion of the current invest-
ments and those expected to flow into the state in the near
future are converging in and around the port sites. For instance,
investments of around $3.9 billion are expected at Hazira, $3.7
billion at Vagra and of $4.9 billion near the ports of Pipavav and
Jamnagar. Large industrial houses are keen to locate their busi-
ness units in proximity with the ports, to have easy access to
imported raw materials and to export finished products.
The state has now identified more Greenfield ports to be
executed in various phases. The process of the development
of ports at six locations has already commenced. These are
expected to attract investments ranging from $700 million to
$1.5 billion. Another $5.6 billion has been set aside by the state
government for the upgradation of existing ports.
Sites Identified for Development of Greenfield Ports
Khambat
Mithivirdi
Vansi
Mahuva
Borsi
Simar Maroli
Source: Gujarat Maritime Board
Compared to the previous year, imports through intermediate
and minor ports have increased by 20 per cent, while exports
have increased by 19.47 per cent. The main items of imports The state has more than 10 promising shipbuilding sites along
through intermediate and minor ports are crude oil, naphtha, its coastline, with new shipyards already being built in Mundra,
coal, iron ore, rock phosphate, fertiliser, ammonia and machinery. Pipavav and Hazira.
The main items of exports through these ports are high speed
diesel (HSD), naphtha, petrol, clinker, cement, oil cakes, bauxite, Shipbuilding Sites in Gujarat
salt, soda ash and food grains.

NCEs
Another key factor expected to influence the creation of busi-
ness opportunities along the ports is the upcoming Delhi-Mum-
NDDS
bai Industrial Corridor (DMIC). The DMIC would have excel- Products

lent connectivity with the non-major ports of Mundra, Pipavav,

Technology Intensive
Dholera, Dahej, Hazira and Maroli. This will greatly facilitate the Drugs (Cytotoxics,
Vaccines)
movement of cargo between the ports and the states through
which the DMIC passes. Manufacturing and
Research Services

Shipbuilding
Commodity Generics

Active Pharmaceutical
Gujarat’s rich maritime history has facilotated the rapid growth Ingredients
of the shipbuilding industry. At present, more than 5,000 ships
and 1,000 sailing vessels visit the ports of Gujarat every year.

Gujarat is already home to significant shipyards such as Alcock

Ashdown,Vipul Shipyard and ABG Shipyard.
Currently, leading companies are in the process of develop-
The state offers several favourable parameters for the develop- ing shipbuilding yards in the state include Larsen & Toubro and
ment of shipbuilding and ship-recycling industries: Mercator Group.

• Well-developed port infrastructure. Pharmaceuticals & Biotechnology

• Availability of land, water and power, in abundance. Gujarat has the distinction of being the first state in the country
• Availability of raw material, such as ship-building plates and to pioneer several new concepts in the pharmaceutical sec-
engines. tor. Manufacturing of chemical-based drugs has now given way
• Stillness of water and deep draft. to drug discovery, clinical research and contract research and
• Availability of skilled labour. manufacturing services (CRAMS).
• Proximity to ancillary industries.
• Sufficient anchorage space. Gujarat is the first state to:
• Manufacture active pharmaceutical ingredients (APIs) and
The Kalpasar Project, which involves construction of a 64 km finished dosage forms in India.
dyke across the Gulf of Khambat, is expected to result in the • Manufacture pharmaceutical machinery in India.
development as well as enhancement of new and existing ports, • House Clinical Research Organisations (CRO), such as Quin-
including: tiles.
• Pipavav • Conduct pre-clinical safety and toxicology studies in India.
• Maroli
• Dholera The state accounts for 28 per cent of the national pharmaceuti-
• Dahej cal production (2006-07). Exports increased by 53 per cent in
• Hazira 2006-07 vis-à-vis 22 per cent in 2005-06.
• Umargaon
 GUJARAT PAGE 27

Key Players Across the Value Chain

Ankleshwar, Ahmedabad, Bharuch,Vapi and Valsad. Savli Industrial
Estate has been established in Vadodara for the development of
biotech companies.
NCEs

NDDS
Pharmaceutical Clusters in Gujarat
Products

Technology Intensive As on December 2006, Gujarat had commissioned 295 large-

Drugs (Cytotoxics,
Vaccines) scale pharma projects with an investment of $533 million. In
Manufacturing and
early 2007, 114 large-scale projects envisaging an investment of
Research Services $225 million were under various stages of implementation.
Commodity Generics

Active Pharmaceutical
Oil & Gas
Ingredients

Gujarat is the second largest gas producing region in India. The

Gujarat has a widespread presence across the entire value chain state’s proximity to Middle East gas sources and an attractive
with several domestic and international companies in each seg- northern market makes it a potential gas supply hub. Oil and gas
ment: reserves in Gujarat are primarily located at Ankleshwar, Mesana,
• Active Pharmaceutical Ingredients (APIs) – Zydus Cadila, Tapti High, Hazira, Bharuch, Gandhar, Dahej, Jambusar, Palej, Kalol
Alembic, Torrent, Dishman, Concord and isolated gas fields around Ahmedabad.
• Commodity Generics – Zydus Cadila, Torrent, Alembic, JB
Pharma The state was the first to develop a state-wide Integrated Gas
• Manufacturing & Research Services – Intas, Lupin, Glenmark, Grid, which can augment the distribution of gas to all residential
Cipla, Wockhardt areas.
• Technology Intensive Drugs – Zydus Cadila, Intas
• Novel Drug Delivery System (NDDS) Products – Sun Two LNG terminals exist at Hazira and Dahej and two new
Pharma, Zydus Cadila terminals are proposed at Mundra and Pipavav.
• New Chemical Entities (NCEs) – Zydus Cadila, Torrent
Key players in Gujarat include Cairn Energy, Shell, British Gas,
Gujarat is currently home to 902 allopathic manufacturing units Reliance Industries Ltd and ONGC.
and 2,122 contract manufacturing units. The state houses several
multinational companies such as Sanofi Aventis, Wyeth and Ab- Location Activity
Jamnagar RIL refinery - 3rd largest
bott. in the world, Essar
Refinery
The government has taken initiatives for establishing several Dahej Petronet LNG Ltd’s
re-gasification terminal
pharmaceutical clusters, located in the districts of Baroda,
Hazira Shell and Total’s
LNG terminal
Vadodara IOC Refinery
Gandhar ONGC’s Gas
Processing Complex

NCEs
Leading Players in Gujarat
NDDS
Products

Technology Intensive
Drugs (Cytotoxics,
Vaccines)

Manufacturing and
Research Services

Commodity Generics

Active Pharmaceutical
Ingredients
Information Technology (IT) Sector-wise
Sector wise Exports
Exports (US$billion)
(US$ billion)

Regarded as a rapidly growing sector in Gujarat, exports from 5.7

Minerals
Software Technology Parks of India (STPI) units registered a
Organic Chemicals 1.6
growth of 47 per cent during 2000-05. There are 295 approved
STPI units in Gujarat, which comprise five per cent of the total Cotton 0.82

number of approved units in the country. Copper 0.73

Plastics 0.62
Independent agencies have ranked Gujarat amongst the top five Iron and Steel 0.54
states in terms of e-readiness.
Seafood 0.2

The ranking has been based on the following parameters:

• Level 1 in Network Policy and E-governance
Source: Industries Commissionerate, GoG
• Level 2 in Network Learning
• Level 4 in Network Access and Network Society
Investment Profile of Gujarat
The rankings have been awarded after analysing the relationship
between e-readiness and its major components with develop- US$ 102 bn
363 MoUs
ment levels of each state. & Intentions

US$ 20 bn
Gujarat has the distinction of having implemented several IT 226 MoUs
projects for evolving a successful e-Governance model. Further, US$ 14 bn
it is in the process of establishing requisite infrastructure for the 76 MoUs
development of the sector.
n Vibrant Gujarat 2007 n Vibrant Gujarat 2005 n Vibrant Gujarat 2003
The government has put into place an IT policy, offering fiscal
and non-fiscal incentives, for promoting rapid growth of the Gujarat currently contributes to 18 per cent of the country’s
sector. total industrial investments.
For the period August 1991 to May 2007, the state received
Export Profile of Gujarat 8,423 Industrial Entrepreneur’s Memorandums (IEM) with a
proposed investment of around $96 billion. Gujarat holds the
Gujarat contributes 14.3 per cent of the country’s total exports highest ranking among all states for IEMs received (value-wise).
of merchandise goods and services. The state’s exports during However, volume-wise, it holds the second rank, indicating the
2005-06 showed an increase of around 20 per cent over large number of mega projects proposed to be established in the
2004-05. state.

Increase in exports from Gujarat (US$ billion) Gujarat has further received:
• 808 Letters of Intent (LOI) with a proposed investment of
2004-05 15.7 around $15 billion
• 1,504 Letters of Permission (LOP) for setting up 100 per
2005-06 12.6 cent Export Oriented Units (EOUs) with a total expected
investment of $1.6 billion.
0 2 4 6 8 10 12 14 16
Source: Industries Commissionerate, GoG
As on October 31st, 2006, 4,857 projects aggregating a total
investment of around $30 billion were implemented. Further,
Gujarat exports several products across various sectors in- 1,743 projects with an investment of around $29 billion are
cluding textiles, petroleum, chemicals, engineering and gems & under implementation.
jewellery. Chemicals, plastics, seafood and textiles are among the
highest contributors to Gujarat’s exports. Gujarat has the distinction of initiating Vibrant Gujarat, a bian-
 GUJARAT PAGE 29

nual, Global Investors’ Summit. It witnesses participation from
leading national and international companies. The first edition
of the summit, held in 2003, witnessed the signing of 76 Memo-
randa of Understanding (MoU) worth $14 billion. In 2005, 226
MoUs, worth $20 billion, were signed.
Regional Scoring Tool among 27 states. Gujarat offers the most
favourable outlook for growth of demand for infrastructure
projects with the highest score of 28 out of the maximum pos-
sible score of 33.
Source: Census of India, RBI, NHAI, Deutsche Bank Research

The third edition of the summit held in January 2007 witnessed Key Players
participation of over 200 foreign delegates from leading com-
panies across the world. It witnessed the signing of 363 MoUs Domestic Players
worth $100 billion.
Reliance Industries Ltd (RIL)
Increasing number of Investments
RIL is the flagship company of India’s largest private sector en-
Vibrant Gujarat 2007: Key Investments terprise, the Reliance Group, with businesses in the energy and
Sector MoUs Investment materials value chain. The group’s annual revenues are in excess
(US$ billion) of $22 billion.
SEZs 28 38.84
Power 19 30.32 RIL is India’s largest private sector company. In FY 2005-06, it
Oil and Gas 26 10.17 became India’s only private sector company to feature in the
Fortune Global 500 list of the World’s Largest Corporations, for
Auto and Engineering 36 3.40
the second year in a row.
IT 21 3.37
Ports 22 3.07
Three out of four of the company’s manufacturing facilities in
Chemicals and 31 3.05
India are located in Gujarat – at Naroda (150 acres), Jamnagar
Petrochemicals
(7,400 acres) and Hazira (700 acres). RIL’s grassroot petrochemi-
Others 180 12.74
cal refinery at Jamnagar has the distinction of being the largest
Source: Reserve Bank of India’s Study on Outlook for Corporate Investments of its kind in the world.

Among the investments proposed, a total of 23 Mega Projects
with an investment of $67 billion is expected to flow into the
state.
The state also hosted an Urban Summit where 320 MoUs with
an investment of $46.6 billion were signed.
Total =675 MOUS
*Civil Aviation, Textiles & Apparels, Urban Development, Road &
Rail Projects, Healthcare, Paper Industries, Biotechnology, Finan-
cial Sector, Education, Pharmaceuticals.
Some of these projects are:
• Film City
• Effluent Disposal Channel for Textile Processing Unit
• Waste Water Management by Hylfux, Singapore
• Carbon Credit by World Bank
• Indus Valley Education Centre by Global Heritage,Vadodara
• New Institute of Public Health
• Vehicle Traffic Monitoring System.
According to Deustche Bank Research, Gujarat ranks first in
The company is engaged in the manufacture of synthetic textiles,
fabrics, fibre intermediates, plastic, polyester, chemicals and
petrochemicals.
Reliance is in the process of setting up a Petroleum & Petro-
chemicals SEZ at Jamnagar with a proposed development cost of
$1.1 billion.
Essar Group
The Essar Group is a diversified business group with an enter-
prise value of over $20 billion. The company’s portfolio includes
steel, energy, power, communication, shipping & logistics, and
construction. It employs over 20,000 people worldwide. With a
firm foothold in India, Essar Group has been focusing on global
expansion with projects in Canada, USA, Africa, the Middle East,
the Caribbean and South East Asia.
Among its recent global acquisitions are US-based companies,
Global Vantedge and Minnesota Steel, and Canada’s Algoma
Steel. In India, the company has operations in Mumbai, Gujarat
(Ahmedabad, Hazira,Vadinar) and Vishakhapatnam.
Aditya Birla Group (AB Group)
A $24 billion conglomerate, the AB Group has a prominent posi-
tion in the league of Fortune 500 companies.
The group is the 11th largest cement producer in the world
and the seventh largest in Asia. UltraTech Cement is its cement
production company.
Hindalco, a Fortune 500 company of the AB Group is one of the
world’s largest aluminum rolling companies and one of the three
biggest producers of primary aluminum in Asia. It is also amongst
the fastest growing copper companies in Asia and the third larg-
est producer of insulators.
The group has 10 manufacturing facilities located across Gujarat;
they are involved in the production of copper, aluminum, cement,
chemicals, viscose staple fibre and insulators.
The group has a presence in the state through the following
companies:
• Hindalco
• Shree Digvijay Cement
• Grasim
• Aditya Birla Nuvo
• Essel Mining
• Aditya Birla Insulators
• UltraTech Cement
Nirma Ltd.
One of India’s major retail giants, Nirma Ltd offers quality
products such as cosmetics, soaps, detergents and salt. Head-
quartered in Ahmedabad, Nirma is the largest detergent manu-
facturer in India.
Torrent Group
Headquartered in Ahmedabad, the Torrent Group is a $950 mil-
lion diversified business conglomerate with a strong presence
in the power and pharmaceuticals sectors. Group companies
include Torrent Pvt Ltd, Torrent Pharmaceuticals Ltd, Torrent
Power Ltd and Torrent Cables Ltd.
ABG Group
The flagship company of the group, ABG Shipyard, was incorpo-
rated in 1989 as the Magdalla Shipyard Pvt Ltd, at Surat, with the
key business activities of shipbuilding and ship repairing.
The company’s yard at Surat is the largest private sector
shipbuilding yard in the country. It also has the distinction of
having multiple building berths and ship-lift facility. The shipyard
has constructed and delivered 99 specialised and sophisticated
vessels, such as interceptor boats, self loading and discharging
bulk cement carriers, split barges, bulk & newsprint carriers and
offshore supply vessels, for leading national and international
companies.
The group is in the process of establishing a shipyard at another
key location in Gujarat at Dahej.
Dishman Pharmaceuticals
Dishman Pharmaceuticals is a recognised supplier of cost-effec-
tive, high-quality chemical services and products to the global
pharmaceutical and chemical industry. The company manufac-
tures APIs, API intermediates and fine chemicals. Headquartered
in Ahmedabad, Dishman exports to a number of countries. The
company aims to become India’s leading contract manufacturing
organisation.
Arvind Mills
Arvind Mills is a leading multinational textiles manufacturing
company. With its presence across the textiles value chain, the
company endeavours to be a one-stop shop for leading garment
brands. Arvind Mills is one of the top three producers of denim
in the world. Its product line includes fabrics (denims, shirtings,
khakis and knitwear) and garments. Arvind Mills is Asia’s first
fabric manufacturing unit to receive an ISO 14001 certification.
Quintiles India
Quintiles Transnational is a leading Clinical Research Organiza-
tion (CRO), which provides three main services and solutions:
• Product Development Services.
• Commercialisation for sales force and medical communica-
tion services.
• Strategic Partnering Solutions.
Incorporated in Gujarat in 1997, Quintiles is the first global
CRO to be established in India. It is the only CRO in India to
be recognised by the Department of Scientific and Industrial
Research (DSIR), Government of India as a Commercial R & D
company.
Having conducted more than 175 clinical studies involving over
1,300 sites and nearly 35,000 patients, Quintiles India has devel-
oped expertise in various therapeutic areas.

Rasna
Currently holding 93 per cent market share of the soft drink
concentrate market in India and about 82 per cent of the in-
house consumption of soft drinks, Rasna has become a house-
hold name.
It has the distinction of being among the first Indian companies
to have a widespread range of products in the processed food
sector.
Zydus Cadila
Established in 1952 in Gujarat, Zydus Cadila has grown into one
of India’s leading pharmaceutical and healthcare companies with
sales of $457 million in FY 2006-07.
The company has a wide-ranging presence in formulations,
API, diagnostics, health and dietetic foods, skin care and animal
healthcare. It exports branded formulations to 43 countries
worldwide. With a total of 560 product registrations, the com-
pany focuses on the therapeutic areas of cardiovascular, gastroin-
testinal and pain management for exports.
Zydus Cadila, which also exports APIs to more than 40 coun-
tries, has a formulations production unit located at Ahmedabad,
involved in the manufacture of tablets, injectables, capsules and
liquids. The company has production facilities at Vadodara and
Ankleshwar and a state-of-art research centre in Ahmedabad.
It is in the process of establishing a sector-specific SEZ for phar-
maceuticals in Ahmedabad.
Adani Group
Established in 1988, the Adani Group recorded sales worth $2.3
billion for the year ending March 31, 2006. It is one of the largest
trading houses in India, with operations in coal, wheat, castor oil,
petroleum, business process outsourcing (BPO), power trading,
iron ore and pulses.
It has developed an SEZ at Mundra. Gujarat Adani Port Ltd was
the private partner involved in developing the Mundra Port, the
second port to be privatised in the state.
The Adani group, through its wholly-owned company, Gujarat
Adani Energy Ltd, has developed a distribution network for
natural gas in two key cities. The group has also set up India’s
largest edible oil refinery in the state.
In a joint venture with Petronet LNG Ltd, Adani Enterprises
GUJARAT PAGE 31
proposes to develop a multi-purpose port at Dahej.
Welspun
A $1 billion group, Welspun is one of the fastest growing busi-
ness conglomerates in India with a presence spanning 50 coun-
tries. The group’s interests are spread across six companies:
• Home textiles.
• Saw pipes & steel.
• Specialty texturised polyester yarn.
• Bathrobes.
• Retail.
Welspun Gujarat Stahl Rohren Ltd., has two manufacturing facili-
ties in Gujarat, and is the the largest SAW pipe manufacturers in
Asia. The group is one of the top three terry towel producers
in the world and amongst the largest manufacturers of specialty
polyester filament yarn in India. It is also the largest manufac-
turer and exporter of bathrobes, which are produced in the
company’s manufacturing unit in Gujarat.
Foreign Players
Matsushita
Founded in 1918, Matsushita has grown into one of the largest
Japanese electronics producers. The company also offers services
such as home renovation. Matsushita’s range of products include
audiovisual and information/ communication equipment, home
appliances and components under its brand – Panasonic.
Matsushita was among the first companies to establish a
business unit in Gujarat in 1972 through a joint venture with
Lakhanpal. Matsushita Lakhanpal Battery India Ltd., now known
as Panasonic Battery India Co Ltd. has a manufacturing unit at
Vadodara engaged in the manufacture of dry cell batteries.
With an annual income of $500 million (March 2006), it is
involved in the manufacture and sales of batteries, battery appli-
ances, battery component parts and machinery spare parts.
Bombardier Transportation India (BTI)
The Indian subsidiary of Bombardier Inc. Canada, BTI has had a
presence here since the last 35 years. It is active in rail transpor-
tation equipment, systems and services and regional and busi-
ness aircraft. It is one of the first private companies to have been
chosen to build rail vehicles in India.
Bombardier has a state-of-the-art production site at Vadodara,
which has been operational since 1996. It is involved in the
manufacture of a range of converters, electronic controls for
train control and communications for three-phase propulsion
technology, as well as circuit breakers and tap-changers.

Bombardier’s signaling office and software development centre

are also located at Vadodara, where it develops software for
signaling and traction applications, and caters to the software
requirements of Bombardier Transportation worldwide.

McCain Foods

McCain Foods is a privately owned multinational leader in the

frozen food industry with revenues of $6 billion (2004). It is the
world’s largest producer of French fries and potato specialties.
The company’s food products include appetisers, pizzas, vegeta-
bles, desserts and other frozen foods. It has over 55 production
facilities spread across six continents, supported by over 20,000
employees.

Shell

Shell is a worldwide group of oil, gas and petrochemical com-

panies with interests in bio-fuels, wind and solar power and
hydrogen. The group is active in more than 130 countries with
over 108,000 people worldwide. The company has made the
largest foreign direct investment into India among all integrated
oil companies (around $1 billion) and is the only global major to
have a retail licence in India. Besides being a major private sector
supplier of crude products, chemicals and technology to public/
private sector oil companies, Shell also has key interests in lubri-
cants, bitumen and LPG. It also operates an LNG receiving and
re-gasification terminal, as well as a technology centre.

India has been a focus country for investments for the global
Shell Foundation, which has committed resources across seven
programmes and has already spent over $5.5 million.

ABB

ABB is a global leader in power and automation technologies

that enable utility and industry customers to improve their
performance, while lowering environmental impact. The group
operates in around 100 countries and employs about 111,000
people. The company has eight manufacturing units, with a global
R&D Centre in Bangalore.
 GUJARAT PAGE 33

Doing Business in Gujarat

The steps required to be undertaken by an investor after iden- Step 2: Registration of Business Organization
tification of the project and the locations are given below. The
details are related to the state-specific approvals required for After approval for setting up a project is granted, the applicant
the purpose of establishing a new unit. will have to get registered with the concerned authority.

Step 1: Approvals/ Registration/ Filing Information for Key Approvals Required

Setting up a Project Type of Organization Authority

Approval from the Government of Gujarat or Government of Sole Proprietorship No registration required
India needs to be taken for setting up a project depending on
the nature of the industry and scale of investment.
Partnership Registrar of partnership firms
The details of key approvals required and the authority granting Government of Gujarat
approvals are as below:
Corporation (Pvt. / Public Registrar of companies Govt. of India
Key Approvals Required Ltd.) (office located in Gujarat)
Procedure Authority
Step 3: Acquisition of Land
SSI Registration District Industries Centre
of the district where the unit In Gujarat, investors can purchase land in a GIDC estate. Alter-
is to be located
natively, they can apply for state government land or purchase
Letter of Permission For automatic approval: private land.
Development Commissioner
Kandla Special Economic Zone Key Approvals Required
Land Authority
In case of FDI, where the automatic route is not applicable, Gov-
ernment of India’s permission needs to be taken before making In GIDC Estate Concerned office of GIDC
an application for the above approvals. Government Land Concerned District Collector
Apart from the above mentioned approvals, there are certain ap- or Collector/District
provals which need to be taken for specific projects: Development Officer
Private Land (Purchase Deputy Collector
Specific Approvals Required of agricultural land for
Procedure Authority non-agricultural use)
Non-Agricultural District Collector (urban
Food and Drug Commissionerate of FDA permission area), District Development
Manufacturing Sectors Officer (rural area)

Mining of Minerals Commissionerate of Geology

and Mining
Project located within Gujarat Maritime Board
500m of a coastline
Step 4: Clearance from Pollution Control Board Step 7: Approval of Building Plans

A No Objection Certificate (NOC) needs to be obtained from Location of Unit Authority

the Gujarat Pollution Control Board (GPCB) by industries that
are not exempt. The consent from GPCB is required before In GIDC Estates Executive Engineer (GIDC)
commencing production. GPCB maintains and regularly updates of the concerned region
the list of industries which are not required to obtain NOC. Outside GIDC Estates Local authority incharge
of the area where the unit is
In addition, the following approvals are required for certain to be established
projects:

Key Approvals Required Step 8: Other Approvals

Applicability Authority
In order to establish a unit, there are certain other key approvals
Recommendation Forest and Environment required to be taken:
of State Govt. for Department
environmental Applicability Authority
Govt. of Gujarat
clearance
Central Regulation Forest and Environment Factory Registration Director of Industrial Safety
Zone Department and Health, Govt. of Gujarat
Govt. of Gujarat Boiler Registration Chief Inspectorate, Steam and
Boiler, Govt. of Gujarat
Handling of hazardous Director of Industrial Safety
items and Health, Govt. of Gujarat
Step 5: Arrangement of Power
Quality Certification Bureau of Indian Standards
Purpose Authority (office located in Gujarat)

Sole proprietorship Location specific circle office

sanction of power of electricity company Single Window Assistance for setting up new projects
Captive power Gujarat Electricity Regulatory
Commission Industrial Extension Bureau (iNDEXTb) provides a single point
of contact for all investment-related activities in Gujarat. It is
Non-conventional Gujarat Energy
the investment promotion agency of the government of Gujarat.
sources of energy Development Commission
The agency also assists investors in complying with the above
formalities required to set up a project.
Step 6: Arrangement of Water
Investment Climate in Gujarat
Location of Unit Authority
Currently, Gujarat accounts for 18 per cent of the total national
In GIDC Estates Authority of concerned industrial investments. As per the Socio-Economic Review 2006-
GIDC estate 07, the state was home to 10 per cent of the total number of
factories located in India. The institutional, regulatory and policy
Outside GIDC estates Commissionerate of Geology
(for drawing canal/ and Mining, Government of environment influences the investment climate of any region or
underground water) Gujarat state. Gujarat has been a constant feature in the list of top five
states chosen as investment destinations.
 GUJARAT PAGE 35

Gujarat has a tradition of entrepreneurship, which is reflected in Average cost of doing business in Gujarat
the initiatives taken by the state such as:
• Enacting Special Economic Zone (SEZ) Act. An industry estimate provides the following average costs for
• Enacting the Private Sector Participation Law (Gujarat Infra- setting up a business unit in Gujarat:
structure Development Act).
• Gujarat Port Policy. Component Cost
• Gujarat Industrial Policy 2000. Urban land 290 – 365
• Gujarat Build-Operate-Transfer Law.
Rural land 120 – 146
(US$ / Sq m)
Being among the first states to establish reform-oriented poli-
cies has been a critical factor for creating a conducive environ- Electricity 0.17
ment for investors. Gujarat has further launched specific policies (US$ / unit)
that cater to the development of sectors such as ports, roads, Construction 61
biotechnology, IT, agriculture and minerals. for office space
(US$ / Sq ft)
Recognising its importance, the state has also taken necessary Lending rate 10 – 12%
steps to establish physical infrastructure such as roads, power
Employee cost
and water; industrial infrastructure such as SEZs, industrial
(US$ / man year)
clusters and investment regions; and social infrastructure such as Labour 1463
townships, educational and healthcare institutions. Supervisor level 2,341
Managerial level 7,317 - 14,634
However, the state will need to accelerate the creation of
residential, educational and recreational facilities to meet the
growing demands of investors. State Competitiveness

It has established a regulatory framework, which provides requi-
site assistance to investors for setting up new units.
In its study on Outlook of Corporate Investments, the Reserve
Bank of India (RBI) has ranked Gujarat first with 25.8 per cent of
total investments. The study included private companies, which
have been sanctioned financial assistance in 2006-07 and those
which have been sanctioned assistance prior to 2006-07 and
have capital expenditure lined up in subsequent years. The cor-
porate investments have been estimated for the year 2006-07 by
suitably aggregating data.
State ranking analysis conducted by the India Today Group de-
clared Gujarat as the top state with the requisite infrastructure
for attracting and sustaining investments.
The tradition of entrepreneurship in Gujarat has played a key
role in encouraging industrial development of the state. Gujarat
has taken several initiatives for creating competitiveness in the
areas of manpower development, socio-economic development
and infrastructure.
Gujarat has the uniqueness of product specific clusters, which
have been developed throughout the state. The government has
further lent an impetus to this form of industrial development
through the Cluster Development Scheme (CDS). This scheme
has provided Gujarat’s SME sector with a competitive edge over
similar industries in other states.
The state’s competitiveness in the industrial sector has been fur-
ther augmented by the presence of 42 SEZs and 182 industrial
estates, which is among the highest in the country.

Gujarat utilises its available natural resources such as its 1,600

km long coastline and a rich mineral base for augmenting its
industrial development.
Gujarat has key unique infrastructure projects:
• Country’s only LNG terminals
• Country’s only Chemical Port Terminal
• Petroleum and Chemical & Petrochemical Investment Region
(PCPIR)
• Special Investment Region (SIR)

Gujarat has the clear advantage of a large number of urban ag-

glomerations in comparison with several other states. Located
at an average distance of 50-60 km, these cities span the entire
state. Connectivity from industrial areas to these urban centers
assists in providing easy access to urban and recreational infra-
structure.

In recognition to its growth potential, Gujarat was set the high-

est growth target of 10.2 per cent in the 10th Five Year Plan by
the Planning Commission. The state successfully achieved this
target and has now been set the growth target of 11.2 per cent
in 11th Five Year Plan.
 GUJARAT PAGE 37

OVERALL STATE COMPETITIVENESS

Parameter Gujarat Parameter Gujarat

Opportunities in Type of Industry Opportunities in Type of Industry

Tourism Electronic Hardware

Information Technology Gems & Jewellery

Food Processing Industry High Medium Low

Crude Oil and Natural Gas

Petrochemicals
Doing Business
Pharmaceuticals & Biotechnology
Fiscal and Non-Fiscal Incentives

High Medium Low

Cost of doing business

Availability of Labour

Opportunities in Type of Industry Ease of Setting up and Carrying

out Business
Agriculture Food & Agro Processing Industry
High Medium Low
Mineral Based Industry

Engineering Industry

Industrial Infrastructure - Existing and Propose

Chemicals Industry

Power
Apparel & Textile

Connectivity
Retail

Industrial Estates/Areas
High Medium Low

STP

EPIP
Industrial Infrastructure - Existing and Propose
EPZ
IIDC

High Medium Low

Industrial Growth Centre

High Medium Low

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ance placed guidance taken from any portion of this publication.
 GUJARAT PAGE 39

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May 2008