Gujarat Government to Establish 12 New Industrial Regions by 2015-16

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Researched by Industrial Info Resources (Sugar Land, Texas)--To foster manufacturing and economic activity in Gujarat, the state government plans to establish 12 new Special Investment Regions (SIRs) by 2015-16. The state is also looking at active participation from the private sector for development and operations of these industrial hubs. In 2009, Gujarat, which is among the top industrialized states in India, passed the Gujarat Special Investment Region Act, which provides guidelines and the framework for the development and operations of SIRs in the state. Gujarat, which is a pioneer in the concept of the SIR, is also constructing its first Petroleum, Chemicals and Petrochemicals Industrial Region (PCPIR) in Bharuch.

The SIRs will act as hubs for manufacturing companies in the auto ancillaries, electronics, chemicals and health care sectors. Government officials have indicated that the SIRs and the PCPIR will entail an investment of nearly $15.75 billion each. The Gujarat Industrial Development Corporation (Gandhinagar, Gujarat) will be responsible for construction and operations of 10 SIRs, while the Gujarat Maritime Board (Gandhinagar) and the Gujarat Infrastructure Development Board (Gandhinagar) will manage one SIR each.

According to the Act, an SIR will have to be built on a minimum of 50,000 hectares of land. At least 55% of the land must be set aside for non-processing and residential township development. Companies can purchase land directly from landowners. While companies establishing manufacturing units in an SIR may not receive tax incentives, they will benefit from the state-of-the-art infrastructure and other facilities available. Encouraged by the investment of $4.27 billion by ONGC Petro Additions Limited (New Delhi) in the Bharuch PCPIR, the state government hopes to attract similar participation for the proposed SIRs.

The SIRs will be located at Anjar, Pipavav, Navlakhi, Viramgam-Sanand, Santalpur, Aliyabet, Hazira, Simar, Okha, Halol, Dholera and Changodar. The government has identified 138,000 hectares for the Viramgam-Sanand SIR, 186,000 hectares for the Santalpur SIR, and 122,000 hectares for the Halol SIR. While the Santalpur SIR will be developed as an agricultural and solar-power hub, Viramgam-Sanand will focus on the automotive, engineering and health care sectors. The Halol SIR will consist of manufacturing facilities for electronics and auto ancillaries. The 50,000-hectare industrial hub at Dholera will be one of the smallest SIRs in the state. However, it is larger than the 32,700-hectare Special Economic Zone in Shenzhen, China, which is considered the largest in the world.

In a related development, the state government has directed the concerned regulatory authorities to expedite work on development of the PCPIR at Dahej. By 2020, the federal government is targeting $20 billion in investments in the PCPIR. According to Maheshwar Sahu, Gujarat's Principal Secretary for Industries and Mines, preliminary activities on 453 square meters of land have been completed. The PCPIR has received funding of $15.75 billion and $720 million for various facilities and infrastructure development, respectively. The PCPIR is expected to play an important role in the growth of India's petrochemicals sector. Petrochemical demand is estimated to grow from 3-4% to about 12-15% from 2015 through 2017.

Gujarat, which has a coastline of 1,600 kilometers, is emerging as a popular investment destination in India. The state has 41 ports and is strategically located, with access to Australia, China, the Gulf nations, the United Kingdom and South Korea. The ports account for nearly 25% of India's sea cargo movement. Gujarat garners nearly 15% of the total investments made in India and contributes 16% to the nation's industrial production. While the proposed PCPIR and SIRs will boost industrial production and create new jobs, the state is also expected to benefit from the Delhi-Mumbai Industrial Corridor (DMIC), which will establish a trading and manufacturing hub in the Delhi-Mumbai region. About 564 kilometers of the corridor falls in Gujarat, and as a result, the state is likely to witness investments of about $30 billion.

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