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Industrial Development & Economic Growth in Gujarat

March, 2018

Gujarat is located on the western coast of India and has the longest coastline of 1,600 km in the country. Gujarat is one of the high growth states in the country. Gross State Domestic Product (GSDP) of Gujarat increased at a CAGR of 11.56 per cent between FY06-16 to reach US$ 158.19 billion in 2015-16. Gujarat has achieved the distinction of being one of the most industrially developed states and contributes about a quarter to India’s goods exports.

There are 13 major industry groups that together account for around 82.05 per cent of total factories, 95.85 per cent of total fixed capital investment, 90.09 per cent of the value of output and 93.21 per cent of value addition in Gujarat's industrial economy.

Gujarat is a leader in industrial sectors such as chemicals, petrochemicals, dairy, drugs and pharmaceuticals, cement and ceramics, gems and jewellery, textiles and engineering. The industrial sector comprises of over 800 large industries and 453,339 micro, small and medium enterprises. During 2016-17, the state produced 4.61 million tonne of petroleum (crude). It accounts for around 72 per cent of the world’s share of processed diamonds and more than 80 per cent of diamonds processed in India. As of December 2017, Gujarat had total refining capacity of 101.9 MMTPA, accounting for 41.54% of the country’s capacity.

Gujarat has achieved the distinction of being one of the most industrially developed states. Accounting for five per cent of the total Indian population, contributing about a quarter to India’s goods exports. The state ranks first in terms of total area covered under SEZs in India. It is also a leading SEZ state with the highest geographical area of 29,423.9 hectares under SEZ development.

The following are some of the major initiatives taken by the government to promote Gujarat as an investment destination:

  • The Gujarat Garment & Apparel policy was announced in October 2017 with the aim of creating 100,000 jobs in the state.
  • The government is developing a High Speed Rail passenger corridor from Ahmedabad to Mumbai with the cooperation of the Government of Japan. The state has announced an Incentive program for the Industries (General) from 2016-2021 in accordance with the New Industrial Policy of 2015. The scheme aims to attract increased investments in the manufacturing sector to create more employment opportunities.
  • Gujarat’s Industrial Policy, 2015, offers attractive incentives and concessions for prospective investors.
  • Gujarat has well developed infrastructure. With one major port and 44 non-major ports, Gujarat has the highest number of operational and commercial cargo ports in India.
  • Many upcoming ports are being developed as captive ports to cater to specific company and industry requirements. The state undertakes fast-track clearance in establishment of ports through private participation.
  • The state government has approved interest subvention at the rate of 6 per cent for three years for building godowns on the farms to boost storage capacity in the state. It has also allocated US$ 1.49 billion for Narmada Yojana.
  • The Government of Gujarat has initiated several steps for the development of a world-class port city at Mundra. The port has a cargo handling capacity of over 200 million tonnes per annum.

MMTPA – Million Metric Tonnes Per Annum

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