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  • INDIAN STATESEconomy and Business


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  • INDIAN STATESEconomy and Business



    Executive Summary 5

    Economic Snapshot 7

    The State Economy 9

    Infrastructure 11Social infrastructure 11Access infrastructure 11Industrial infrastructure 12

    State Policy 13Vision & Mission 13Agro policy 13Small industries policy 13Infrastructure policy 13e-Governance 14

    Business Opportunities 15Key industries 16Exports 18Investment 18

    Key Players 19

    Doing Business in Gujarat 26Indicative list of approvals and clearances 26Cost of setting up business 27Contact for information 28

    A report by KPMG for IBEF


    Executive Summary

    It is home to the worlds largest grassroots refinery in Jamnagar, set up by Indias leading business house,the Reliance Group. Essar and Indian PetrochemicalsCorporation Ltd are other large chemicalmanufacturers in the state. Gujarat also accounts for 40 per cent of Indias pharmaceutical productionwith major players like Cadila, Sun Pharma, Alembic,Torrent and Sarabhai being present in the state.

    Apart from large-scale textile manufacturing units,Gujarats gem and jewellery industry processes 80 per cent of the diamonds in the country and itsimmensely successful state cooperative federationshave brought prosperity to rural Gujarat.Amul,a brand owned by the Gujarat Cooperative MilkMarketing Federation, enjoys a significant market share in Indias processed food sector.

    The state is keen to leverage its natural resource base and entrepreneurial spirit to sustain itsleadership position.To attract investment Gujarat has set up single window facilities at the district level.Gujarats Industrial Promotion Board is also in theprocess of setting up kiosks at all important places to disseminate information regarding regulationsgoverning new investment.

    The state has actively sought private participationto improve existing infrastructure facilities.It was the first in the country to develop portfacilities, estates and roads in conjunction with the private sector.

    Gujarat, Indias leading industrial state is a manufacturing powerhouse with world-classproduction capabilities in textiles, petrochemicals,pharmaceuticals and agro-based products.

    Situated on the western tip of India, Gujarat has the longest coastline in the country.The state has 41 ports that handle most of the cargo in the country,including Indias only chemical handling port located at Dahej, in Bharuch district.The state has extensiveroad, rail and air networks.The recently commissionedLiquefied Natural Gas (LNG) terminals in Dahej standto augment its capabilities in the power sector andbenefit industry.The state also has Indias largest hydro project, the Sardar Sarovar project.

    Gujarat is rich in bio-resources and has a forest cover of 1.88 billion hectares. It has 10.7 millionhectares of highly diversified cropping area and is a leading producer of horticultural crops.It is rich in mineral resources like limestone,lignite and bauxite.

    Industrial estates in Gujarat have proven to be extremely popular with businesses. Jamnagar in Gujarat is the worlds largest industrial estate whileKandla has Asias first and Indias largest multi-productSpecial Economic Zone (SEZ).

    The chemical industry in Gujarat accounts for half of the annual investment in the state and contributesto more than 20 per cent of Indias chemical output.

  • Industrial Centres in Gujarat


    An Economic Snapshot

    Capital Gandhinagar

    Area (sq km) 1,96, 000

    Population (million) 50.6

    Literacy rate (%) 69

    Sex ratio (per 1000 males) 921

    Length of coastline (km) 1,600 (the longest in India)

    GSDP (US$ billion) 22

    GSDP over 10 years (%) 12.4

    National highway length (km) 1,572

    Domestic airports Ahmedabad, Surat,Vadodara, Jamnagar

    International airport Ahmedabad

    Major ports Kandla, Dahej, Hazira, Mundra

    Key industries ChemicalsDrugs & Pharmaceuticals Gems and JewelleryMines & Minerals Textiles Agro-based

    Monthly per capita 14expenditure (US$)

    Market potential value 7.8 % share in India

  • Advantage Gujarat

    n Gujarat has the largest chemical industry in the country

    n It is a leading producer of cement and soda ash

    n It has the largest diamond processing industry in the country

    n The state has vast mineral resources like bauxite, lignite and natural gas

    n Gujarat is the leading producer of cotton, castor seeds and psyllium husk

    n Gujarat has the world's largest industrial estate and grassroots refinery located at Jamnagar

    n Gujarat is home to Kandla,Asias first and largest multi-product specialeconomic zone (SEZ). It is also Indias largest port with a capacity of 39 MMTPA (million metric tonnes per annum). Most of Indias bulk cargo is handled through Kandla port

    n Indias largest Liquefied Natural Gas (LNG) terminals are in the process of beingset up at Dahej port

    n Gujarat was the first state to privatise the setting up of infrastructure projectsand the only state so far in the country where ports are being built on theBuild-Own-Operate-Transfer (BOOT) scheme.

  • A strong manufacturing sector is the bedrock of economic activity in Gujarat. In the last two decades, the state witnessed an accelerated pace of industrialisation.The contribution of themanufacturing sector in the state economy hasdoubled in the past decade because of its strategiclocation, excellent infrastructure support, extensivenatural resource base and a proactive government.As of October 2004, the state has receivedacknowledgements of 6850 Industrial EntrepreneursMemorandums (IEMs) for an estimated investment of US$ 59.24 billion.

    According to the Annual Survey of Industries (2002-03), Gujarat ranks second in respect of state-wise percentage share in Net Value Added by manufacturing in the factory sector of the country.

    n Gujarat is Indias most industrialised state.It accounts for 20 per cent of Indias manufacturing



    The state of Gujarat accounts for 16 per cent of the countrys total investment and 10 per cent of expenditure.This is primarily due to theentrepreneurial spirit of its people.The states GrossState Domestic Product (GSDP) grew at an averagerate of 12.4 per cent per annum in the period 1994-02. Its GSDP was estimated at US$ 22 billion in 2003-04 as against US$ 19 billion in 2002-03,which is a growth of 15.4 per cent during the year.

    The growth in industrial activity has brought aboutprosperity in the state.The number of people livingbelow poverty line has registered a decline.Thepurchasing power of people has increased immensely.The monthly per capita consumer expenditure of the state is well above the national average.

    Monthly Per Capita Consumer Expenditure

    Rural Gujarat Urban Gujarat

    Gujarat: US$ 12.2 Gujarat: US$ 25.4

    India: US$ 11 India: US$ 21

    Gujarat - Sectoral Contribution to GSDP






    Secondary Source: Socio-Economic Review, 2003-04Government of Gujarat website

    < 729



    > 2187.5

    Source: National Council of Applied Economic Research (NCAER)

    Income distribution of households (US$; in per cent)

    1989 1999









  • n It is the second largest producer of lignite in thecountry producing 6.7 million tonnes (2003-04)

    n It is the second largest producer of oil and naturalgas producing 6.13 million tonnes and 3.42 millioncubic metres respectively in 2003-04

    n It is the countrys fourth largest producer of bauxite producing 1.97 million tonnes in 2003-04

    n The state produced 19.16 million tonnes of limestone in 2003-04 and is one of its largestproducers of soda ash

    The recent successes in natural gas explorations in the state have made an immense impact on the industry. Riding on the wave of the recent gas discoveries, Indias first LNG terminal has beencommissioned at Dahej port and a gas pipeline grid is under construction. Both these initiatives wouldprovide inexpensive and clean fuel to industry in Gujarat giving it a distinctive advantage.

    output, 21 per cent of its exports and 30 per centof its stock market capitalisation

    n Gujarats rate of growth of industrial output is 18 per cent (2003-04)

    n Gujarat ranks third in number of factories in the country

    n It is a leading state in terms of per capita grossoutput and per capita value added in industries

    n Projects worth US$ 7.3 billion are underimplementation

    A majority of the states population continues to rely on agriculture as its principal source of livelihood.Though cash crop cultivation is thepredominant feature of agriculture, the state has the potential to grow a wide variety of agricultural and horticultural crops owing to its varied agro-climatic zones.

    n Gujarat is Indias leading producer of castor,cotton, tobacco, groundnut, sesame seeds andfennel seeds

    n It is one of Indias largest exporters of oil seedsand value added products, psyllium husk, cummin,dehydrated onion, dehydrated garlic, fruits andvegetables

    n As in 2004, 239 projects with an investment of US$ 596 million were commissioned in theagro-marine and food processing sector.Presently, 103 projects with investment worth US$ 452 million are known to be underimplementation

    Gujarat is endowed with a rich and diverse mineralbase. Principal minerals found in the state arelimestone, lignite and low-grade bauxite.