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Industrial Development & Economic Growth in Sikkim

February, 2018

Sikkim is one of the fastest growing states in India. The state has favourable agro-climatic conditions, which support agriculture, horticulture and forestry. As per the state budget 2016-17, Sikkim got certified as first fully organic state in India by the Central Ministry of Agriculture and Farmers’ Welfare as well as other recognized agencies of the country. It is home to around 5,000 species of flowering plants, 515 rare orchids, 60 primula species and 36 rhododendron species. This makes it one of the leading states in the Northeast region in terms of production and supply of cut flowers to mainland consumer markets. The state is also considered as a huge cardamom epicentre of the world, producing around 80 per cent of large cardamom in the country. Production of large cardamom in Sikkim is estimated to have reached 4,684 tonnes in 2016-17

Between 2011-12 and 2016-17, Gross State Domestic Product (GSDP) expanded at a compound annual growth rate (CAGR) of 11.05 per cent to US$ 2.93 billion whereas the Net State Domestic Product (NSDP) expanded at a CAGR of 11.30 per cent to US$ 2.58 billion.

The state's economy is largely agrarian, based on the terraced farming of rice and the cultivation of crops such as maize, millet, wheat, oil seeds, pulses, spices, cereals barley, oranges, tea and cardamom.

The Commerce and Industries Department of Sikkim is involved in promoting trade and industry in Sikkim. The Sikkim Industrial Development & Investment Corporation Limited (SIDICO) is the state-level institution engaged in promoting, financing and developing the tiny and small scale industries (SSI) sector in the state.

Ecotourism, handicrafts and handlooms, silk reeling and processing, precision engineering, electronics, IT, medicinal plants, floriculture, tea, spices, honey and biotechnology are key areas identified by Sikkim.

Some of the major initiatives taken by the government to promote Sikkim as an investment destination are:

  • The state government launched Sikkim AGRISNET, an internet-based agriculture information centre, to promote scientific agricultural methods and convert research into practice in the agricultural sector.
  • As of 2015-16, Sikkim had a total road network of 2,425.45 km. The state government allocated US$ 44.64 million for roads and bridges department in State Budget 2017-18.
  • The total allocation of budget for rural development is estimated to be US$ 72.68 million during 2017-18. In addition, US$ 25.27 million would be allocated for the development of water supply and sanitation and housing sector in the state.
  • The Government of Sikkim has placed information technology high on its agenda. The budget allocation for information and broadcasting is expected to be US$ 0.96 million during 2015-16.
  • Pharmaceutical is an emerging industry in Sikkim due to tax incentives offered by the state government as well as low manufacturing and labour costs. Sikkim is home to 14 major pharma companies, which have significant investments in the state. These include Cipla, Sun Pharma, ZydusCadila, Alembic, IPCA, Alkem Lab, Intas Pharma, Torrent Pharma and Unichem.
  • The Sikkim government has announced a technical collaboration with floriculturists from the Netherlands and Thailand to develop the state's potential in floriculture and market cut flowers from the state globally.
  • The Department of Information Technology, Government of Sikkim is in the process of setting up an IT park and National Institute of Electronics and Information Technology (NIELIT) at Pakyong. The IT Park will have state-of-the-art facilities that will offer a plug and play environment and cater to the specific needs of the information technology and business process outsourcing (BPO) segments.
  • In order to give a boost to handloom and handicrafts sector, the Government of Sikkim has been making several efforts, which include providing training to upgrade the quality and designs of the products; bringing expertise and professionals for their marketing and supply, etc.
  • The Sikkim Government plans to set up Tea Development Corporation of Sikkim, which would be the nodal agency for developing the tea Industry in Sikkim. It would work to expand the Temi tea estates in the state and acquire new gardens either wholly or partially owned by the government.
  • The Sikkim Manipal University (SMU), a partnership between the Government of Sikkim and Manipal Education and Medical Group (MEMG), provides technical, healthcare and science education. It is rated as one of the top universities in the country.
  • The central government has announced plans to develop Gangtok, Pelling, and Yuksam cities as smart cities as in coming years.

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