FDI (Foreign Direct Investments) in DMIC States Centre for Urban Research
Gujarat
In Gujarat, identified key industrial sectors include Gems & Jewelry, Ceramics, Chemicals & Petro-Chemicals, Pharmaceuticals, Engineering, Textile& Apparel, Bio-technology, Medical Tourism and Information Technology (IT/ITeS) Services.

Gems & Jewellery Industry
Gujarat is the leading state in India in gems and jewellery sector, as it contributes to about 72% of the total exports of India. Gujarat has a well established diamond industry. Diamond processing and trading unit are spread across the State in cities such as Surat, Ahmedabad, Palanpur, Bhavnagar, Valsad and Navsari. Gujarat accounts for about 80% of diamonds processed and 90% of diamonds export from India. Surat has 65% share in India\'s diamond trade.

The state boasts of good infrastructure, a well-developed market and a good business environment. The upcoming Diamond Park and Gems & Jewellery Special Economic Zones would provide the necessary infrastructure to facilitate diamond processing centers, traders and other jewellery manufacturing units in Gujarat. Presence of state-of-the-art institutes in Gujarat - Indian Diamond Institute (IDI), National Institute of Design (NID), National Institute of Jewellery Design (NIJD) and National Institute of Fashion Technology (NIFT) would support the gems and jewellery industry.

Many opportunities exist for setting up of diamond processing centers and gold jewellery manufacturing units. A gold refinery can be set up to meet the demand of gold. Assaying and hallmarking centre is another opportunity due to increasing quality consciousness for hallmarked jewellery. Jewellery Artisan Training Centers are also indispensable as skilled and trained work force would be required for continuous innovation of products and processes

Ceramics
Gujarat has emerged as \"Ceramic State of India\" during the last two decades. Thangadh, Morbi and Wankaner towns have emerged as largest manufacturers of ceramic tiles and sanitary wares, contributing to about 60% of India\'s total production. Major ceramic companies in the State include Bell Granito Ceramica, Kajaria Ceramics, Nitco Tiles, Oracle Granito, Varmora Granito, Asian Granito, Gujarat Gold Coin Ceramics, Orient Ceramics & Industries, H. & R. Johnson (India) Ltd., etc.

Chemicals, Petrochemicals and Pharmaceuticals
Prominence of Chemical/ Petrochemicals and Pharmaceutical sectors in the state of Gujarat is depicted by the whopping 60% share in production of the state\'s manufacturing sector (31% of the total chemicals production in India is from Gujarat). Gujarat is also home to many pharmaceutical companies (big and small) and contributes 45% to the country\'s total production in Pharmaceuticals.

Gujarat manufactures 100% soda ash in the country and has an impressive share of 85% in salt production. The state\'s share in other areas are as follows: Ethylene (50%), polymers (56%), LAB (37%), phosphatic fertilizers (38%), nitrogen fertilizers (20%), etc.

Major reasons attributed to the spectacular performance of chemicals sector in the state include strong base of petrochemical industry, increasing availability of basic feed stock, relatively low overhead cost, and availability of necessary infrastructure, trained and technical manpower and high degree of entrepreneurship. Gujarat Industrial Development Corporation (GIDC) has set up mega estates, particularly for chemicals at Ankleshwer, Panoli, Vapi, Vatva, Jhagadia, Vilayat and Dahej to facilitate further development and growth. Private investments in SEZ and envisaged plans for setting up PCPIR (Petroleum, Chemicals and Petrochemicals Investment Region) at Dahej are bound to transform the industry landscape of not only Gujarat but of the whole country.

Moreover, Chemical Industry in India and Gujarat provides a large scope for collaboration in technology tie-up, process development; joint R&D, Solid and Liquid Waste Management and Market Access for various sub-sectors of the industry. Clinical Research and Contract Manufacturing (CRAMS) offers lucrative market to Gujarat-based companies on account of lower cost of production and well established operation practices. The worldwide CRAMS segment is poised to grow from USD27 billion to USD 55 billion by the turn of the decade. Similarly, the drugs going off-patent (worth USD45 billion) in the next four years is capable of providing good business opportunities to the firms in Gujarat.

Engineering Gujarat\'s engineering industry has gathered tremendous momentum over the past few years and specifically, has witnessed impressive growth and development. Several multinational companies such as Sandvik Asia, FAG Bearings, Ingersoll Rand/ Dresser Rand, ABB, Hitachi, etc have their manufacturing base in Gujarat. Other major engineering industries across the state of Gujarat include Castings & Forgings (Ahmedabad, Rajkot, Vadodara), Brass Parts (Jamnagar), Diesel Engine and Parts (Rajkot), Textile Machinery Parts (Surat, Surendranagar), Automobile components (Ahmedabad, Rajkot), Machine Tools (Rajkot), Air & Gas Compressors (Ahmedabad), Industrial valves (Ahmedabad), etc.

Textiles and Apparels
Textile sector, which used to be considered a sunset sector a few years ago in Gujarat is now gearing up to attract further investment, as reflected from a sharp rise in investment from INR 27 billion in 2004-05 to INR 80 billion in 2005-06, with a quantum jump of around 200%. Availability of incentive schemes such as "Technology Upgradation Fund", is providing further boost to textile clusters of Gujarat. This sector is providing tremendous employment opportunities and as a result, considered to be a thrust sector of the state. Investment in the state is largely from groups like Arvind, Aarvee, Raymond, Century Textiles,

Gujarat Heavy Chemicals Limited, Welspun, etc. The entire state of Gujarat is specialized in various forms of textile weaving and it has a strong fabric base. Ahmedabad is renowned for cotton and blended fabric with a strong base for manufacturing denim, made-ups, and ladies dresses. Surat is the largest 'Art Silk Fabric' producing centre with over 40% of the art silk fabric produced in the country whereas Umbergaon is a modern power looms cluster, mainly producing synthetic suiting and shirting fabric and Jetpur is famous for its hand printing units. The vibrant textile related activities prevailing all over the state represent a solid platform to achieve the common goal of shaping Gujarat\'s textile industry comparable to international standards.

Gujarat is the largest producer of cotton in the country with about 16% of land area of the state occupied in cotton cultivation. Gujarat has the second largest decentralized powerlooms with a share of 25% in the country. It has large number of looms (600,000) and processing houses (350 - 400) along with 2000 garment units, 3000 garment processing units that contribute to about 33% of woven fabric in the country. Together these contribute to around 12% of the total export from the country. Major export articles include cotton, man-made staple fibres, made -ups and apparels, etc.
Gujarat has an established base of fibre, fabric and garments. However, integration of these units is still at its infancy. This gives an opportunity to have an integrated fibre to fashion approach, if positive steps are taken towards promoting existing integrated textile parks such as in Jetpur besides establishing new parks. Eco-friendly, organic cotton cultivation and further value addition would also be a possible investment opportunity.

Although Gujarat is the largest producer of cotton and has doubled its capacity for spinning cotton and blended yarn during the last ten years, there is still room for more cotton spinning units to come up in the State. These units can be set up along with captive power plants based on natural gas as the energy component being the most critical in spinning unit; the natural gas based captive power plant increases the efficiency of the spinning unit through better quality of power and uninterrupted supply. Looking at the growth of apparel industry worldwide, the State has put thrust to set up various Apparel training centres in order to meet the demand for trained manpower for apparel industry i


Gujarat. The State government has initiated the process of establishing such apparel training institutes through Apparel Export Promotion Council and National Institute of

Fashion Technology. The field of technical textiles is new to the country. However, due to growing demand and lack of production in the country, a dedicated effort towards developing and promoting the use of technical textiles in the State is essential. With established base for man-made fibre in and around Surat, technical textiles production facilities can be easily set up in the State, putting forth an investment opportunity for, both, indigenous and foreign collaborations.

Biotechnology Gujarat with its impressive records in manufacturing chemicals and Pharmaceuticals can extend its competencies to these areas as well. A lot of pharma companies here are seriously into the off shoring business (Contract Manufacturing of generics, etc) and it is expected to further increase in the coming years. Firms such as Quintiles, Synchrone, Lamda (Intas), Zydus Cadilla and a few others are into the CRO segment successfully.

Integrated pharma companies can exploit the synergies in pharma and biotech segments. In short, with the favourable state machinery to help industries, the investor-friendly climate and the entrepreneurial spirit of the people, there is no doubt that Gujarat can be a front-runner in this field too.

Medical Tourism Gujarat known for its hospitality is now setting new standards in international healthcare. The State has fast emerged as a prime destination for healthcare tourist with cardiac, kidney and joint problems. In addition to allopathic medicine, Gujarat has inherent strengths in Ayurveda, Yoga and Naturopathy.

There is immense potential for a synergistic development of the Modern and Indian systems of Medicine and holistic service delivery to the patients within the country as well as from abroad. Gujarat has started witnessing high influx of health tourist from all over the world especially Non Resident Gujaratis (NRGs) for medical treatment. Gujarat

contributes 25 - 30 % of the total industry\'s revenue which is about Rs. 1,000 billion. About 6 million Gujaratis are spread across the world constituting about 32% of the total 20.1 million people of Indian origin, who are located worldwide.

The state medical professionals have achieved unrivalled standards of excellence in the fields of Ophthalmology, Orthopedics, Oncology and Urology as well as Dental care and In-vitro fertilisation. The major healthcare providers, facilitated with world-class hospital infrastructure are Apollo Hospitals, Ahmedabad; Bhailal Amin (Escorts Heart Institute), Vadodara; Muljibhai Patel Urological Hospital, Nadiad;

Krishna Heart and Super Specialty Institute, Ahmedabad; The Gujarat Cancer and Research Institute, Ahmedabad, amongst others. The private healthcare providers today dominate the healthcare sector contributing about 75% of the total revenue. Thus there is a need to promote private sector investment in Health Sector in order to facilitate the establishment of quality health care institutions.

Private sector can play an important role in supplementing State Government\'s efforts in the fields of secondary and tertiary healthcare and diagnostic services. With the help of Private Sector Participation (PSP), the State can maximize the benefits which might accrue from the opportunities in expanding availability and access of quality healthcare services and integrate allopathic treatment with Indian and other alternative systems of medicine.

As a part of Medical Tourism Policy, 2006 which is under preparation, the State of Gujarat plans to develop a healthcare complex \"Medicity\" which would be a one-stop shop for all medical services comparable to an international healthcare park. This Medicity would be equipped with all state-of-the-art medical facilities, medical institutes, super specialty hospitals amongst other facilities like Yoga treatment and Ayurvedic treatment.

This complex would require international collaborations and investments to make it a world-class medical tourist destination. Also, the Government of Gujarat intends to invite Private Sector Participation (PSP) by taking over the Primary Health Centres (PHCs) and Community Health Centres (CHCs) and the District Hospitals in the State, as a part of the State Government\'s strategy for achieving its goals for the development of health sector. This type of arrangement to involve Public Sector Participation intends to upgrade the present healthcare facilities in the State keeping in mind the affordability, accessibility and quality of the service.

Information Technology Though Gujarat has probably lost the initial race for IT, the resurgent state is geared towards phenomenal growth by leveraging on four major aspects which drives the IT business such as proactive government policies conducive to do business, the availability of human capital, favourable real estate prices and a good social infrastructure. Government of Gujarat has adopted a multi-pronged strategy has been adopted to address the problems in the IT sector in order to provide the necessary impetus for growth.

. E-governance: All the district headquarters have been linked in the initiative (GSWAN- the largest IP-based network in the Asia-Pacific) bringing about transparency in the administrative set up, offering fast and reliable services to its citizens. All the treasury offices, sales tax departments, land records, etc are computerised and linked. The slew of reforms has brought about better efficiency, speed and better revenue realisation.

. Private participation is encouraged in IT/ITES projects with a view to provide gainful employment. Fiscal incentives will be provided to private entrepreneurs in the state who want to set up business in IT related areas.

. Gujarat Venture Capital Fund will provide assistance to entrepreneurs with sound business plans.
With these plans becoming a reality, the state will be able to create huge employment in all the thrust areas:
. Human-ware: Gujarat churns out nearly 10,215 engineers, 12,395 technical diploma holders and thousands of graduates every year. It boasts of renowned schools like Indian Institute of Management, National Institute of Design, NIFT, Mudra, DA-IICT, etc. IIT Mumbai is also setting up a campus in Gandhinagar very soon. . Real Estate: Prices are the fourth lowest in the country.

Developers such as DLF, Rahejas, etc have already started setting up IT infrastructure in Ahmedabad, Vadodara and other cities. Migration of companies from Tier 1 to Tier 2 and Tier3 cities in search of cutting operating costs and fighting attrition levels would target cities like Gandhinagar, Ahmedabad, Vadodara and Surat. In short, Gujarat is poised for huge growth in IT/ITES in its quest for transforming the state to a knowledge based economy with sustainable growth.

Ship Building/ Repairing
Gujarat is credited with the largest ship building/repairing in the world at Alang, near Bhav Nagar. The annual turnover of the industry is around INR 2000 Crore. This has also led to the development of other ancillary business including rerolling mills, oxygen plants, etc.

On an average, around 200 ships are broken every year with a highest of 354 numbers in the year 1996. Alang Ship Building/Repairing Yard is established in year 1982 and accommodates 183 plots spread over around 10 kin long stretch along the sea coast of Alang and Sosia, which has a typical location advantage suitable to the ship building/repairing business.

The yard has unique geographical features of the area including a high tidal range, wide continental shelf, 15 degree slope, and a mud free coast, are ideal for any size ships to be beached easily during high tide. Coastal villages around Alang linked through the yard have developed into industrial towns, providing economic opportunities in ship breaking work to workers from other states, and social services and self-employment to local villagers. There are four stakeholder groups in yard: villagers, workers, ship breakers and the Gujarat Maritime Board (GMB).

Agriculture, Horticulture and Food Processing
Gujarat witnessed Impressive Agricultural Performance during last five years (2001-05) with an average growth rate of 24.11 %. The major crops in the state are as follows: . Agricultural Crops: Wheat, Rice, Maize, Groundnut, Mustard, Sesame, Pigeon pea, Green Gram, Cotton, and Sugarcane.

. Horticultural Crops: Mango, Banana, Sapota, Lime, Guava, Tomato, Potato, Onion, Cumin, Garlic, Isabgul and Fennel.
. Gujarat is the largest producer of Castor, Tobacco, and second largest producer of Sesame seeds, Cotton and Groundnut and third largest producer of banana and Isabgul (Psyllium) in the country. Gujarat's prominence in the agro-sector is depicted in the chart below which shows the state's share in total production of certain crops in the country.
The state has a number of agro and food parks which fuel the growth in the sector year after year. The strategic advantage of Gujarat has been identified by various industry players - Amul, Cargill, Vadilal, HLL, ITC, Godrej, Rasna, McCain and Parle.