Gujarat – Industrial development

Gujarat – Industrial development


 Gujarat – Industrial development






  • Gujarat is located on the western coast of India and has the longest coastline of 1,600 km among all states in the country. The state shares its borders with Rajasthan, Madhya Pradesh, Maharashtra and the Union Territories of Daman & Diu and Dadra & Nagar Haveli. The Arabian Sea borders the state both to the west and the south-west.


  • Over a period of time, Gujarat has also succeeded in widening its industrial base. At the time of inception in 1960, the industrial development was confined only to four major cities namely Ahmedabad, Baroda, Surat and Rajkot and some isolated locations such as Mithapur and Valsad. Today, almost all the districts of the state have witnessed industrial development in varying degree. Such a massive scale of industrial development has been possible on account of judicious exploitation of natural resources, such as minerals, oil and gas, marine, agriculture and animal wealth. The discovery of oil and gas in Gujarat in the decade of 60s has played an important role in setting up of petroleum refineries, fertilizer plants and petrochemical complexes. During the same period, the state government has also established a strong institutional network. Gujarat Industrial Development Corporation (GIDC), established industrial estates providing developed plots and ready built-up sheds to industries all across the state. Institutions were also set up to provide term finance, assistance for purchase of raw materials, plant and equipment and marketing of products. Later, District Industries Centers (DICs) were set up in all the districts to provide assistance in setting up industrial units in the form of  support services.


  • The state also developed infrastructure facilities required for industries, such as power, roads, ports, water supply and technical education institutions. The Government also introduced incentive schemes, from time to time, to promote industries mainly in the under-developed areas of the state to correct regional imbalances.


  • Gujarat is one of the leading industrialised states in India. At current prices, Gujarat’s Gross State Domestic Product (GSDP) was about US$ 158.2 billion over 2015-16. Average annual GSDP growth rate from 2004-05 to 2015-16 was about 11.56 per cent. As of October 2017, Gujarat had a total installed power generation capacity of 30,298.11 megawatt (MW).


  • Gujarat is considered the petroleum capital of India due to presence of large refining capacity set up by private and public sector companies. As of December 2015, Gujarat ranked second in the production of crude oil (onshore) in India. The state produced 4.61 million tonnes of petroleum (crude) during 2016-17.


  • The state is the world’s largest producer of processed diamonds, accounting for 72 per cent of the world’s processed diamond share and 80 per cent of India’s diamond exports. With a contribution of 65 to 70 per cent to India’s denim production, Gujarat is the largest manufacturer of denim in the country and the third largest in the world. The state has excellent infrastructure as compared to other states. There are 45 ports, 18 domestic airports and one international airport. There are 106 product clusters and 60 notified special economic zones (SEZs). Large scale investment is expected in Gujarat as part of the US$ 90 billion Delhi-Mumbai Industrial Corridor (DMIC).


  • According to the Department of Industrial Policy & Promotion (DIPP), Foreign Direct Investments (FDI) inflows in the state of Gujarat totalled US$ 17.01 billion during April 2000-June 2017. Gujarat accounted for about 4.97 per cent share in the overall FDI inflows in India. The Vibrant Saurashtra Expo and Summit, was held in Rajkot in January 2016. MoUs worth US$ 341.88 million were realised for the development of various sectors of the state during the event.


Key Sectors:

  • During 2016-17 (up to December 2016), state held 218 agriculture produce market committees (APMCs) and there were 218 main yards and 182 sub-market yards operational in the state.


  • The state government has announced plans for the setting up of brown and green field projects to facilitate environment friendly processing standards in the textile units of the state.


  • As per the state budget 2017-18, allocation of US$1.26 billion was proposed by the Government of Gujarat for the Energy department.


  • By 2020, the state aims to achieve 10 per cent of engineering output from auto and auto components from the existing level of 3.7 per cent.


  • Eight out of 10 diamonds in the world are polished in Surat.


  • The Central Government plans to set up a medical device park in the state of Gujarat, for which a high level committee has also been constituted.


  • During 2016-17, Kandla port handled maximum cargo amongst major ports, estimated at105.44 million tonne.


  • One of India’s most industrialized states, Gujarat maintains a variety of industries, the principal ones being general and electrical engineering and the manufacture of textiles, vegetable oils, chemicals, soda ash, and cement. New industries include the production of fertilizers and petrochemicals. Major resources produced by the state include cotton, peanuts, dates, sugarcane, and petrol. The state is rich in calcite, gypsum, manganese, lignite, bauxite, limestone, agate, feldspar and quartz sand and successful mining of these minerals is done in their specified areas. Gujarat produces about 91% of India’s required amount of soda ash and gives the country about 66% of its national requirement of salt. Chemical Industries in Gujarat count for more than 35% of Indian Chemicals production.


  • It is one of India’s most prosperous states, having a per-capita GDP significantly above India’s average. Kalol Khambat and Ankaleshwar are today known for their oil and natural gas production. ‘Dhuvaran’ has a thermal power station, which uses coal, oil and gas. The Tarapur nuclear station in Maharashtra supplies the remaining power. Also on the Gulf of Khambat, 50 kilometers southeast of Bhavnagar, is the Alang Ship Recycling Yard (the world’s largest). General Motors produces the ‘Astra’ car at Halol near Vadodara. Jalalpur is a large town of Gujarat, where several small and large textile industrial units have been established. Surat, a city by the Gulf of Khambat, is a hub of the global diamond trade.


  • During the period 1960–90, Gujarat established itself as a leader in various industrial sectors – textiles, engineering, chemicals, petrochemicals, drugs & pharmaceuticals, dairy, cement & ceramics, gems & jewellery, etc. Post-liberalization period saw Gujarat’s state domestic product (SDP) rising at an average growth rate of 14% per annum in real terms (from 1994–2002).


  • Ahmedabad, Ankleshwar and Vapi are the hub of chemical industries in the state, having number of manufacturing units (private as well as state owned) manufacturing dyes, specialty chemicals, agrocutural chemicals, pesticides, pigments, colors, etc. Rajkot city is the hub of engineering manufacturing and has many companies manufacturing auto components, auto engines, CNC machines, forging & casting parts, etc. The state operating companies like GNFC, GSPC, GSFC, GMDC are a few among flagship companies of the state.


  • Gujarat achieved as much as 35% of augmentation in its power generation capacity during the period 1995–96 and 2000–01. The producers (IPPs) have contributed significantly in this addition. As a matter of fact Gujarat is one of the first few states in India to have encouraged private sector investment and are already in operation. In addition the liquid cargo (chemicals) handling port at Dahej is also set up in joint sector and made operational. At an investor’s summit entitled Vibrant Gujarat arranged between January 10, 2007 to January 13, 2007, at Science City, Ahmedabad, the state government signed 104 Memorandum of Understandings for Special Economic Zones totaling worth Rs 2.5 lakh crore. However, most of the investment was from domestic industry.




  • All these years, Gujarat has registered an impressive performance in exports of industrial products. Under the 100% EOU scheme, the state received 1570 approvals with an investment of Rs.6605 crore. Of them, as on 30th June 2009, 468 projects with an investment of Rs.2953 crore have already been commissioned. Another 467 projects involving an investment of Rs.426 crore are at various stages of implementation. In addition, a number of units are exporting part of their production to the countries overseas. The share of Gujarat-based units in the total exports from India is estimated at around 14%, excluding the export of gems and jewellery, as most of the export takes place from Mumbai though the production centres are located in Gujarat. If the export of gems and jewellery is also added, the total export from Gujarat could work out to over 25% in the country’s export.


  • In order to sharpen the international competitiveness of the local industries, the State Government has established a GOG-AMA Centre jointly with Ahmedabad Management Association (AMA).



  • To encourage the industries to take advantage of vast opportunities available in the international market, the State Government has also introduced a scheme of export award.




  • Government of Gujarat has been encouraging promotion of Special Economic Zones (SEZs). SEZs are considered as growth engines that can boost manufacturing, augment exports and generate employment. Government of Gujarat has enacted the Gujarat SEZ Act, 2004. Besides this, the SEZ Rules, 2005 and SEZ Regulations and SEZs amendment Act, 2007 are in place. Under the Act, assistance is provided both the developer and co-developer of SEZ for development of infrastructure facilities and providing services. Tax concessions are provided to the units coming up in the SEZ. The State Government has also introduced labour reforms and has carried out amendments in some of the provisions of the Industrial Disputes Act, 1947 offering complete flexibility in the employment of labour by units located in SEZs.



  • In all, 57 SEZs are approved for Gujarat. These include multi-product SEZs and sector-specific SEZs covering textiles, pharma, engineering, chemicals, ceramics, gems and jewellery and IT/ITES sectors.


  • Under new Industrial Policy – 2015, the Government has introduced a “Scheme for Assistance to Micro, Small, Medium Enterprises” which will includes proactive support for development of SMEs, Value addition on local primary sources and increase in the share of manufacturing in State GDP. The new industrial policy incorporates specific inteventions for development of Small & Medium Enterprises which contribute significantly to the economy.


  • Improving sophistication in MSMEs : Gujarat has witnessed strong growth in MSMEs and wishes to strengthen the sector by making it more technology-driven. This support will come by way of interest subsidy for manufacturing and service sector, venture capital assistance, quality certification, technology acquisition fund, patent assistance for national and international, energy and water conservation audit, market development assistance and support, MSMEs for credit rating, raising capital through SME exchange, reimbursement of CGTSME scheme for collateral free loan, State awards under MSMEs and skill development etc.Support would also be extended for development of ancillary and auxiliary enterprises for labour intensive industries.


  • Market Development Initiatives: Gujarat government is taking adequate steps with the intention of giving enhanced visibility to local produce from large industries and specifically from MSMEs. Cognizant of the efforts required to make global distribution of local products a reality, in accordance with the national “Make In India” policy. Since most MSMEs invest more in production and less in marketing, GoG would make marketing credit available to them. The new Industrial Policy has therefore taken upon itself the onus of facilitating use of better marketing practices by the MSMEs and shall provide financial assistance for:
  • Participation in International Exhibitions (Abroad).
  • Promotion of machinery Purchase during the Exhibitions in Gujarat.
  • Promote organizers for organizing exhibitions in Gujarat.
  • Promotion of local Exhibitions in Gujarat.
  • Factory: As per the registration data from Directorate of Industrial Safety & Health,

the number of working registered factories in the State has increased from 30192 at the end of the year 2014(P) to 30743 at the end of the year 2015(P). The average daily employment in the working factories has also increased from 15.98 lakh at the end of the year 2014(P) to 16.23 lakh at the end of the year 2015(P).



  • IT and Electronics Startup Policy 2016-21 : As part of “Make in India” and “Start-up
  • India” moves, Gujarat government announced new policy ‘IT and Electronics Start-up
  • Policy’ for promotion of Information Technology (IT) and Electronics Start-ups,
  • having special focus on encouraging new ventures by providing them various
  • incentives and subsidies. Under the policy, the state government would develop 50
  • Incubator to mentor and guide 2,000 start-ups in the next five years. This new policy
  • Will give boost to new entrepreneurs. It will also encourage skill development in the
  • youth as well as promote research and development activities and will also create
  • immense employment opportunities in the state.
  • Vibrant Gujarat Global Summit 2017 :
  • The 8th edition of the biennial event, Vibrant Gujarat Global Summit 2017 was 4.10 organized from 10-13 January 2017 at Mahatma Mandir, Gandhinagar. The Summit was inaugurated by Shri Narendra Modi, Hon’ble Prime Minister of India on 10th January 2017 and saw an overwhelming participation of around 33,000 delegates from more than 100 countries. The Summit had 12 Partner Countries which included Australia, Canada, Denmark, France, Japan, The Netherlands, Poland, Singapore, Sweden, United Arab Emirates (UAE), United Kingdom (UK) and United States of America (USA) and 8 partner organizations (Australia-India Business Council, British Council, Indo-Canada Chamber of Commerce, Indo-French Chamber of Commerce(IFCCI), JETRO, UAE-India Business Council (UIBC), US-India Business Council (USIBC) and UK-India Business Council (UKIBC)). 25,578 Investment Intentions were signed during the Summit across different sectors.
  • Over the course of four days, 21 Theme Seminars, 3 Action Seminars, 16 Country Seminars and 4 State Seminars were conducted. In addition to this, over 350 B2B meetings and 260 B2G meetings also took place. The Global CEO Conclave, with Hon’ble Prime Minister of India as its Chief Guest and the Hon’ble Finance Minister of India as its chair, attracted 57 Global and Indian CEOs. For the first time, a Nobel Dialogue was organized with 9 Nobel Laureates sharing their views on the theme ‘Science Impacts Lives’. In conjunction to the Summit, Vibrant Gujarat Global Trade Show was also organized in 150000 sq. mtr. area from 9-13 January 2017. More than 1000 stalls attracted a footfall of 1.6 million delegates. The Summit has been effective in catapulting Gujarat’s vision of inclusive and sustainable development onto a global platform and clearly demonstrated that Gujarat is taking a leading role in all the Government of India priority initiatives like Make in India, Skill India, Digital India, Start Up India, Swacch Bharat, Ease of Doing Business, Smart Cities among others.
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