C&W Industrial Sector in India
Transcript of C&W Industrial Sector in India
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INDIA REPORT
RESEARCH AND BUSINESS ANALYTICS GROUP | March 2009
The oasis of economic growth
INDUSTRIAL SECTOR IN INDIA
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EXECUTIVE SUMMARY
Despite the current economic slowdown and a
downsizing of India's expected GDP from 9% to
approximately 7.1% as per the latest report by
Central Statistical Organisation, India still
remains one of the fastest growing economies in
the world, ranking only second to China. Thepace of this growth has largely revolved around
India's service exports, backed by a robust and
ever-increasing domestic consumption. Strong
long term fundamentals like dynamic industrial
environment, positive trend in outsourced
manufacturing, increasing domestic demand and
growth in exports have led the Indian economy
to gain greater foothold in the world market
over the past decade. Distinct advantages such
as lower costs of production and superior
output quality makes India a viable destination
for outsourcing of manufacturing for several
multi-national corporations (MNCs) across the
world.
The manufacturing sector in India has witnessed
a healthy average growth of approximately 9% in
the last four years, with a record growth of
12.3% in 2006-07, primarily attributed to the
global cost competitiveness competitive capital
and operative costs that India has been able to
provide vis--vis other locations. Further, the
expanding domestic market together with the
scaling up of operations by Indian companies,emergence of new industry segments and
amendments in the regulatory framework such
as incentives and subsidies, single-window
clearances, investor friendly policies by several
state governments, etc., have provided a further
boost to the manufacturing scenario in India. An
increased and sustained focus on themanufacturing sector is inevitable as well as
advisable to achieve the projected average
growth of 9% growth during the 11th Five Year
Plan (2007-2012).
India has always enjoyed certain core advantages
in the manufacturing sector, like rich mineral
resources (iron ore, coal etc.), developed
processing base, natural sea ports (Kandla, Kochi,
Visakhapatnam, Paradeep, etc.) and abundant
supply of cost-effective labour. Owing to these
natural advantages, the manufacturing sector inIndia has spread across primary, secondary and
tertiary processing segments. While the
traditional manufacturing strongholds in India
which have been steel, cement, heavy engineering,
textiles, etc., the emerging industrial and related
sectors include agro-based/food processing
industries, pharmaceuticals, automobiles, logistics
and warehousing, among others which are also
gaining grounds in India.
Like the manufacturing industry on the whole,
the Indian industrial real estate market has alsodelivered a strong performance in recent years,
CONTENTS
1
A RESEARCH PUBLICATION
IND IAREPORT
INDUSTRIAL SECTOR IN INDIA The oasis of economic growth-
INDIA REPORT | MARCH 2009
1 Executive Summary
2 Major Growth Drivers ofManufacturing in India
4 Industrial Sector - The Real EstatePerspective
4 Some of the Major Issues andConcerns in Land Acquisition
6 Major Manufacturing Clusters
7 Western Corridor:Maharashtra, Gujarat
10 Southern Corridor:Andhra Pradesh, Karnataka, Tamil Nadu
15 Eastern Corridor:West Bengal, Jharkhand, Orissa
19 Northern Corridor:Himachal Pradesh, Uttarakhand,Punjab, Rajasthan, National CapitalRegion (NCR), Uttar Pradesh, Haryana
24 Outlook
26 Conclusion
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The compounded growth of the manufacturing
industry over the past decade has been a result
of the combined factors as enumerated below:
Economic Growth
The Indian economy has witnessed GDP growth
of over 8% since 2003-04 and has emerged as a
favoured manufacturing and outsourcing
destination. Escalating demand from the growing
mid-economic stratum and increasing exports
has brought in an upsurge of emergent industry
segments including pharmaceuticals, automobiles
and auto ancillaries, FMCG, consumer durables,
logistics, etc. The manufacturing sector, striving
to increase its growth rate from current 7% in
the ongoing financial crisis which has adversely
impacted household income there by putting
pressure in consumer demand. However recenteasing of inflation and stable domestic demand,
will require significant increase in expansion of
plant capacities and increase in productivity.
Infrastructure Developments
Approximately US$ 350 billion has been set
aside for infrastructure development
expenditure by the 11th Five Year Plan period.
The upcoming Dedicated Freight Corridors
(DFC) by the Indian Railways and the proposed
development of approximately 1,500 km of
Delhi Mumbai Industrial Corridor (DMIC) willlead to further development of 13 new
industrial corridors. The central government is
also in the process of setting up a dedicated
fund of INR 50,000 crore for futureth
infrastructure projects. The 11 Five year plan
aims to create an integrated transport system in
the country to include some of the following
key infrastructure development projects:
Doubling existing handling capacity of ports
from 505 million metric tonnes to 1017
million metric tonnes by 2012.
An increase of 51% in rail freight movement
through development of DFC and
development of logistic services.
Completion of National Highway
Development Program (Phase 3 to 7) and
integrate road development with railwaysand other modes of transport.
Government Initiatives
According to the World Economic Forum's
Global Competitiveness Report 2008-09, India
currently ranks 50th among 134 most
competitive economies across the world and a
renewed initiative to strengthen India's policies,
infrastructure, tax regulations, access to finance,
inflation etc. will further increase the
competitiveness of the economy when
compared to others. In order to accelerategrowth and improve competitiveness of the
Indian manufacturing sector, several initiatives
have been undertaken by the Central
Government as below:
Liberalisation of Foreign Direct Investment
(FDI) policy by allowing 100% FDI in the
manufacturing sector
Implementation of technology up-gradation
schemes which provides benefits like
interest reimbursement, capital subsidy andprotection against foreign exchange
fluctuations for various sectors including
several small scale industries, textiles and
apparel, food processing, etc.
Introduction of Special Economic Zones
(SEZ) Act which will increase exports and
facilitate job creation. At the same time
companies operating from these zones will
reap the benefits of sound infrastructure, tax
exemption, improved efficiency and margins
due to potential synergy from the
development etc.
MAJOR GROWTH DRIVERS FOR MANUFACTURING IN INDIA
with average rental growth reaching around 25-30% in key markets. Supply shortages, however,
in prime centres such as Mumbai and Delhi
NCR have forced much of the manufacturingand logistics facilities to relocate to industrial
parks in emerging tier-II and III locations
A renewed initiativeto strengthen India's
industrial policies,
focus on
infrastructure
development, easing
tax regulations and
access to finance will
further enhance
competitiveness of
Indian manufacturing
sector.
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The construction of DMIC spanning acrossapproximately 1500 kms and the
development of Manufacturing Investment
Regions (MIRs) across India
which is expected to double employment,
triple investment and quadruple exports
within this region in a five year time frame.
Exemption from central excise duty,
subsidies on capital investment and
transport, rebate on land and
rationalisation/ reduction in other duty
rates are some of the benefits extended tothe manufacturing sector.
Amendment of the 1984 Land Acquisition
Act, the proposed new policy on
Rehabilitation and Resettlement, and the
repealment of the Urban Land Ceiling and
Regulation Act by several state governments
will further eliminate ambiguity in present
land acquisition procedures.
Increasing Presence of Multinationals
Over the last few years, India has beenincreasingly pursued by multinational
organisations for gaining access to its
marketplace, and to avail its cost competitive
resources. Several multi national corporations
have already explored the opportunity of settingup production bases in India, prominent amongst
which are automobile majors , such as Nissan,
Suzuki, Fiat and Hyundai and iron and steel
majors like POSCO, Arcelor Mittal, Dow
Chemical, etc. are moving towards making India
their manufacturing hub for global exports.
Outsourced Manufacturing
India, only behind China, is the most preferred
global destination for outsourced manufacturing
activities. This is predominantly due to
advantageous factors like lower cost of
production, availability of skilled technical and
management talent coupled with an investor-
friendly government. Manufacturing companies in
sectors such as automobiles, pharmaceuticals,
food processing, electronics and hardware are
increasingly outsourcing production to obtain
cost efficiency and hedge revenues and
production risks over geography. According to
the Made In India Report by McKinsey and
Confederation of Indian Industries (CII),
revenues from manufactured productoutsourcing are expected to raise five times the
current value to over US$ 300 billion by 2015.
PIC
Manufacturingcompanies in
sectors such as
automobiles,
pharmaceuticals,
food processing,
electronics and
hardware, are
increasingly
outsourcing
production to obtain
cost efficiency and
hedge revenues andproduction risks
over geography.
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Real estate is a major cost component for most
capital intensive manufacturing industries. Unlike
other real estate segments like residential,
hospitality, retail and commercial office space,
which focus on built-up space and related costs,
the manufacturing sector requires large land
parcels in the range of 30-200 acres and above.
The quality of land and supply chain connectivity
are other crucial factor for the development of
this sector. Being an extremely complex and
cumbersome process, setting up or relocation ofmanufacturing unit is not always viable and
therefore each manufacturing set up has to
maintain long-term sustainability as an inherent
feature of the industrial space.
Operational and capital costs are the other
important criteria for site selection in this
segment, followed by industrial infrastructure
support and logistics/supply chain connectivity.
Easy availability and cost efficiency of both
skilled and unskilled labour is another important
factor which guides the manufacturing industry,together with pro-active Government policies
and incentives for industrial thrust areas. The
presence of ancillary industries is also kept in
focus during selection and set up of a
manufacturing base.
The establishment pattern of ancillary industries,
presents an interesting study in itself. While
there have been instances of industrial land
being selected on the basis of a strong presence
of ancillary industries in the vicinity, in many
cases the development of ancillary industries
have also been influenced by the existence of
major manufacturing facilities.
As the demand for new industrial locations rises,
companies are increasingly considering setting up
plants and manufacturing units that are
customised to their individual requirements.
Though small and medium enterprises (SME) are
usually content with industrial sheds in a location
of their choice, larger players are keen on
acquiring land and developing the area as per
their specific requirements. Land, by virtue of
being a state subject, has its own complexities
and the process of acquisition poses many
challenges which require professional assistance
and guidance.
INDUSTRIAL SECTOR -THE REAL ESTATE PERSPECTIVE
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INDUSTRIAL SECTOR IN INDIA - The oasis of economic growth
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Title Issues: 'Title' is the most vital part of any
land deal, however in India, due to heavy
fragmentation, unclear succession laws and other
factors, land title is usually shrouded in
controversies. Land deeds are segregated as
leasehold and freehold land, where leasehold
land only gives the user the right to usage of
land without the right to sell / re-sell or amend
the usage while freehold land gives the owner
complete rights to alter usage and even secede
from the land. However, there have been many
cases where leasehold lands have been garbed asfreehold and sold to unsuspecting buyers thus
SOME OF THE MAJOR ISSUES AND CONCERNS IN LAND ACQUISITION
Fragmented Land Holding: In India, land
ownership is usually fragmented with multiple
owners and thus there is low availability of large
contiguous land parcels with single owner. This
also leads to reduced availability of land with
clear title. A part of the problem is lack of
clearly zoned/demarcated land which is largely
due to archaic paper based land records lacking
standardisation across the various states. Even
though India is moving towards digital land
records, various legal bottlenecks threaten to
make the process painfully slow.
Being an extremelycomplex and
cumbersome
process, setting up
or relocation of
manufacturing unit is
not always viable and
therefore each
manufacturing set up
as to maintain long-
term sustainability as
an inherent feature
of the industrialspace.
Consideration for Industrial Land
Acquisition:
=Clear title
=Good connectivity to road, rail and ports
=Proximity to labour catchments
=Sound Physical infrastructure
=Accessibility of raw material and resources
=Supply chain connectivity
=Proximity to large markets
Source: Cushman & Wakefield Research
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increasing the opaqueness in the titles, possiblyleading to multiple claims on the same land
parcel. Due to the fact that land holdings are
fragmented, amalgamation of large land parcels
can be a very painfully slow process as various
owners need to be converted into sellers.
Further, with the ambiguities in land titles and
ownership, there is no actual existence of title
insurance as the costs far exceed the risks.
Although certain insurers are said to be
providing title insurance, the premiums are very
high therefore for all practical purposes title
insurance is non existent in India.
Zoning of Land and Conversion of Use:
Another aspect which can be precarious is the
aspect of zoning and land conversion process
which is under the jurisdiction of the town
planning authorities i.e. land use can be changed
from commercial to residential to industrial or
any combination. Thus upon acquisition, the
developer has to ensure that the land is
converted into the correct zone for industrial
use giving adequate reasons for conversion,
which is usually a slow as well as expensive
process to undertake.
Legal & Regulatory Issues:The legal andregulatory framework for land acquisition in
India is also rather complex. Inconsistent and
overlapping state and union government laws
lead to further complications and delays.
Amendment of Land Acquisition Act 1984 and
new policy on Rehabilitation and Resettlement
have been proposed by central government to
eliminate ambiguity of land acquisition. The
proposed amendment in Land Acquisition Act of1984 aims at redefining forceful acquisition of
land for public purpose. A new policy on
Rehabilitation and Resettlement has been
introduced with the focus on curbing real-estate
players from creating land banks and to
encourage development of land.
As every state has a separate legal and
regulatory framework, the mode of operation
differs from state to state. Technicalities like
Floor Space Index (FSI) and Floor Area Ratio
(FAR) benefits also differ between states, as aresult of which the amount of land being
acquired in a state can be different from anotherstate for the same project.
High Transaction Cost Due To
Complicated Tax Structure: Complicated
property tax regimes and stamp duty structures
also amounts to higher transaction costs on
purchase of real estate assets. In India, stamp
duty and property taxes are state functions and
it differs from state to state and in certain cases
even between cities within the same state.
Currently stamp duty paid on real estate
purchases ranges from 6% to 12% whileproperty tax and registration fees paid in
addition to stamp duty can increase the
transaction cost to as much as 10-15% of total
market value of the land. Disparity in stamp
duty rates is a hindrance for real estate. This
leads to a further lack of transparency in pricing
and creates valuation issues. Proposal for
uniform stamp duty structure across the
country along with rationalisation of stamp duty
rates to realistic levels would generate more
revenues.
Valuation:Valuation of land is one of the keyareas of concern in India as there is a wide
spread discrepancy between the circle rates and
actual market rates. Currently India has no
independent appraiser body that can meet
international standards like those set by
International Asset Valuation Committee,
International Federation of Surveyors, Royal
Institution of Chartered Surveyors, The Appraisal
Institute, American Society of Appraisers etc.
Thus the appraisers use various different
methods of valuations in India, the mostcommonly used method being the discounted
cash flow. However, even that measure, is difficult
to apply uniformly due to the wide spread
discrepancies in the variable factors such as
circle rates, actual rate of acquisition, stamp
rates etc. Therefore different appraisers can
arrive at different values for the same asset
based upon the valuation method, model and
assumptions being taken into consideration. This
allows for a large variance between the valuation
arrived upon.
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A new policy onRehabilitation and
Resettlement has
been proposed with
the focus on curbing
real-estate players
from creating land
banks and toencourage
development of land.
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MAJOR MANUFACTURING CLUSTERS
Several industries are diversifying and expanding
their operations in India to provide added
impetus to the manufacturing sector. High
growth sectors such as automobiles and
pharmaceuticals are the key beneficiaries of the
global trend in outsourced manufacturing
activities. Emerging sectors like food processing,
logistics, warehousing, and the growth in the
consumer goods segment have also provided a
fillip to the manufacturing sector.
The manufacturing sector is usually
concentrated in clusters to enable them to
leverage from the one another's operations. In
India, these clusters can be divided into four
major zones North, West, East and South. There
are several states across India that are promising
industrial destinations and are at various stages
of development. We have selected certain
prominent states to feature in each of the
respective zones. These zones have been
explored to focus on attractiveness, incentives
and initiatives of established and emergingindustrial locations along with types of
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Major Manufacturing Hubs in India
Automobile
Machine Tools
Textile
Drugs & Pharmaceuticals
Source: FedEx and Cushman & Wakefield Research
industries both existing and emerging in each ofthese locations.
The manufacturing
sector is usually
concentrated in
clusters to enable
them to leverage
from the one
another's
operations.
PIC
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Western Corridor
Automobile
Machine Tools
Textile
Drugs & Pharmaceuticals
Source: FedEx and Cushman & Wakefield Research
Maharashtra
Maharashtra has for long been a major
manufacturing hub and one of the most
industrialised states in the country. Existing
industrial base and availability of skilled
manpower have encouraged the growth of the
manufacturing sector in Maharashtra. In order to
further stimulate the state's economy, the
revised Industrial, Investment and Infrastructural
Policy of Maharashtra aims to achieve industrial
growth of approximately 10% by 2010. As a
result, apart from sustaining growth of traditional
industries like automobile, pharmaceuticals,
engineering, chemicals and textiles, the new
policy also focuses on emerging industries like
bio-technology and food processing. Building up
quality infrastructure, incentivising the
manufacturing sector and attracting investments
are some of the key strategies of the state to
realise its industrial policy objectives.
Some of the key policies and incentives that are
likely to play a critical role in the growth of the
manufacturing sector in Maharashtra are as
follows:
WESTERN CORRIDOR
Industrial Promotion Subsidy for new units
and expansion of existing units in the state.
Interest subsidy to small scale units in apparel
and textile industry.
Customised package of incentives to
industrial projects with investment of over
INR 250 cores.
Exemption from electricity duty and waiver
on stamp duty.
Refund/ Exemption of Octroi for 15 years Development of manufacturing clusters and
industrial townships to improve
competitiveness.
Promote setting up of Special Economic
Zones (SEZs) to promote exports from the
state.
Specific policies for vital industries like
Biotech, Textile and Agro Processing.
Major Industrial locations are spread across the
state, however locations of Mumbai, Pune,
Nashik, Nagpur and Aurangabad are key
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Western Corridor - Land Value Trend
Source: Cushman & Wakefield Research
Existing Corridors Land Values Outlook(YOY growth)
Emerging corridors
Pimpri Chinchwad 0%
Panvel 0%
Talegaon 0%Chakan 0%
Sanaswadi 0%
Ranjangaon 0%
Trans-Thane Creek
Taloja
-30%
-15%
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industrial hubs in Maharashtra. The proposeddevelopment of a four-lane road connectivity
between these locations and a greater emphasis
on knowledge based manufacturing along with
agro based industries is likely to further
stimulate growth of the manufacturing sector in
the state. Approximately 80,000 acres of land is
being developed for industrial use across 12
major locations.
Mumbai
Scarcity of land parcels and rising land prices hasled to the development of peripheral corridors
in Mumbai. The demand for industrial land in the
peripheral locations has been fuelled by several
infrastructural developments like the Maha
Mumbai SEZ, the proposed international airport
and the Mumbai Trans-Harbour Link project
(connecting Sewri to Nhava Sheva) Panvel, Taloja,
Trans-Thane Creek, Khopoli and Uran are likely
to witness accelerated growth in near future.
Panvel is a strategically placed, rapidly growing
location near Mumbai. Availability of large landparcels, octroi exemption and proximity to
Jawaharlal Nehru Port Trust (JNPT) make it an
ideal location for logistics and warehousing
industry. Taloja, another prominent industrial hub
in Navi Mumbai which is expected to witness an
upsurge in demand from the warehousing
industry owing to its closeness to the Panvel-
Pune Road and the proposed airport.
Additionally, Trans-Thane Creek which is the
largest industrial area near Mumbai and has
witnessed increasing presence from engineering,
electronics and pharmaceutical sectors in recentpast. This increased demand is likely to drive
demand in adjoining areas of Rabale, Ghansoli,
Mahape and Turbhe.
Pune
With over 9,500 acres of land under
development by Maharashtra Industrial
Development Corporation (MIDC), Pune has
reaped benefits of its existing industrial
experience, while also becoming one of the
largest industrial hubs in the state ofMaharashtra. It is also one of the largest
automobile manufacturing hubs in India, alongwith engineering and electronic industries. More
recently sectors such as food processing,
pharmaceutical and biotechnology industries
have also set up their manufacturing bases here
towards the north and north-eastern part of the
city.
Pimpri - Chinchawad is an established auto
cluster that currently houses many major
automobile players, along with several auto
ancillary units. Shortage of land in existing
locations has led to the emergence of newcorridors like Talegaon and Chakan. Chakan is
especially attractive due to existing tax benefits,
proximity to Jawaharlal Nehru Port Trust (JNPT),
National Highway (NH) 3 and 4, and proposed
airport at Rajgurunagar.
In addition to the presence of automobile sector,
MIDC has also started acquiring large areas of
land to set up Biotechnology and Infotech Parks
between Talegaon and Vadgaon. Mundwa,
Poonawala and Monshi also provide good
opportunities for industrial development.Ranjangaon is emerging as a major industrial
center with several greenfield projects currently
underway. It has already attracted several
manufacturing companies from automobile and
consumer good sectors.
About 4500 acres of land is being acquired by
MIDC for proposed development of industrial
parks and SEZs which will lead to development
of the area of Sanaswadi, north-east of Wagholi,
as another major location for industrial parks.
Nashik
Nashik is another key automobile and
engineering goods manufacturing centre. Over
the last few years, the district has also witnessed
increasing presence of agro processing units.
There are several industrial estates which are
currently operational in Nashik. Development of
4 additional industrial estates, proposed
construction of a 4 lane highway between
Mumbai - Nashik and proposed rail terminus are
some of the key infrastructure projects aimed to
accelerated industrial growth.
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Trans-Thane Creekwhich is the largest
industrial area near
Mumbai and has
witnessed increasing
presence from
engineering,
electronics and
pharmaceutical
sectors in recent
past. This increasing
demand is likely to
drive demand inadjoining areas of.
Rabale, Ghansoli,
Mahape and Turbhe.
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Spread over 2700 hectares of land, Sinnar is thelargest industrial estate in the district with about
174 medium and large operational
manufacturing units catering to engineering,
automobile components and food processing.
Satpur, Ambad, Pimpalgaon and Manmad are the
key industrial hubs in Nashik.
Gujarat is distinguished as one of the most
rapidly evolving industrial states in the country.
The state has set a growth target of 11.2% forth
the 11 Five year plan which will require the
industrial sector to grow over 14% during the
same time period. To achieve this accelerated
growth, the state government has put special
emphasis on manufacturing sector. A front
runner in attracting investments, presence of a
large industrial base, large scale development of
SEZs and investor friendly industrial policy are
major drivers for industrial growth in Gujarat.
While historically Gujarat has been a prominent
manufacturer of textile, engineering products
and pharmaceuticals, the emerging industries
include the automobile and food processing.
Key highlights of the current state industrial
policy are as follows:
Financial assistance at the rate of 20-50% of
fixed capital investment to industrial parks.
Gujarat
Exemption of stamp duty on development ofindustrial park.
Availability of interest subsidy to small and
medium enterprises.
Cluster Development Scheme (CDS) to
promote competitiveness of small and
medium enterprises by creating common
facilities to reduce cost, strengthen
infrastructure facilities and marketing of
products.
Up-gradation of industrial infrastructure
along with promotion and development of
SEZs.
The proposed development of DMIC is
expected to provide more opportunities for
industrial development in the state. About 40%
of the total proposed corridor will pass through
Gujarat influencing industrial growth in 18 out of
25 districts in Gujarat. Vadodra, Ankhleshwar,
Dahej, Bharuch, Surat, Navsari, Valsad and
Umargaon are key industrial locations which are
likely to be benefited from the upcoming
corridor. Peripheral locations of Ahmedabad arealso likely to witness major industrial
developments due to the proposed development
of automobile and pharmaceutical manufacturing
units at Sanand.
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Gujarat isdistinguished as one
of the most rapidly
evolving industrial
states in the country.
The state has set a
growth target of
11.2% for the 11th
Five Year plan which
will require the
industrial sector to
grow over 14%
during the sametime period.
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Andhra Pradesh
Andhra Pradesh has historically been an
agricultural state rather than industrial, but the
government is keen to ensure a more
wholesome growth for the state and is
attracting investments from various industries.
The state is rich in minerals, horticulture,
agricultural and food related production thus
making it a valuable centre for raw materials and
processing. The state also boasts of a large
presence of research & development institutions
around the urban centre of Hyderabad thus
enabling the city to achieve the title of 'bulk
drug capital of India.' The thrust industries as
per the state government are information
technology, pharmaceuticals and biotechnology.
Andhra Pradesh has some key advantages like
skilled population and a central location along
with good connectivity by road (major national
highways such as NH 7 and 9), Air (major
airports being redeveloped and Greenfield
airport being commissioned), Ports (2 major
ports and 10 minor ports with an additional
port at Gangavaram which is currently beingdeveloped) with a proactive government
providing strong infrastructure - the only state
to have an exclusive infrastructural development
act and subsidised land attracting various
industries to set up in this state.
Some incentives offered by the Andra Pradesh
government in the Industrial Investment
Promotion policy 2005-2010 are as follows:
100% reimbursement on registration of land
and building / leased property for industrial
use
Reimbursement of power at Rs 0.75 per unit
for eligible industries and Rs 1.00 per unit for
eligible food processing industries
VAT reimbursement of 25% paid by the
industry for a period of 5 years
15% investment subsidy subject to a certain
limits
Additional 5% on fixed capital investment up
to a limit for SC/ST
Southern Corridor
Automobile
Machine Tools
Textile
Drugs & Pharmaceuticals
Source: FedEx and Cushman & Wakefield Research
SOUTHERN CORRIDOR
Existing Corridors Land Values Outlook(YOY growth)
Emerging corridors
Bommasandra 5-7%Peenya 5-7%Jigani 5%Sriperumbudur 5%Irungattukottai 5%Vishakapattam 5%Balanagar 10%
NH 5 10%Dobaspet 5%Oragadam 5-10%Ennore 5%Kanakpura 5%Tumkur 5%Narasapura 5%Krishtanapatnam 20%Kadapa 15%
Southern Corridor - Land Value Trend
Source: Cushman & Wakefield Research
Andhra Pradeshranks second in
producing Value
Added food
products and has a
10% share of
beverages within the
country.
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Vijayawada
Vijayawada emerged as an industrial hub due to
the connectivity with a natural harbor. Located
on NH 5 this location is accessible to large
markets such as Chennai and Kolkata by road
and a developed railway network, to be
connected it to other parts of the nation. There
are various small to medium scale industries in
the automobile body building, garment, iron and
hardware sector. It is also a major trading hub
due to the location and connectivity thus being
referred to as the commercial hub of AndhraPradesh.
Emerging locations such as Tada, which is being
promoted by the Andhra Pradesh state
government, has an industrial park set up by the
government with strong infrastructure and good
connectivity by being on the golden quadrilateral.
Karnataka is among the top five industrialised
states in India and was the first to introduce a
state Industrial Policy in1982-83. It is ranked asone of the largest exporter of software in India
and also one of the largest recipients of FDI in
the country. It is one of the leading states for
biotechnology while also being a manufacturing
hub for some of the largest public sector
industries namely Hindustan Aeronautics
Limited, National Aerospace Laboratories, Bharat
Earth Movers Limited, Bharat Heavy Electricals
Limited, United Breweries Group and Hindustan
Machine Tools. There are various industrial zones
within the state and although majority of themare concentrated in and around Bangalore city,
there is a steady disbursement of industrial
corridors to different areas of the state. The
Commerce and Industry Department, Karnataka
Industrial Area Development Board and
Karnataka State Industrial Investment
Development Corporation (KSIIDC) have
promoted industrial infrastructure development,
in addition to the incentives, in the state thus
attracting various new industries to set up
within the state. The key thrust areas for the
state are aerospace, engineering, automobile,
Karnataka
Hyderabad
Hyderabad is a major centre for pharmaceuticals
and biotechnology industries in the country. Its
prominence as an industrial town is due to the
robust infrastructure provided by the
government and the connectivity to other parts
of the nation through major national highways.
Development projects such as Genome Valley,
Fab City and the hardware park that are being
set up around Hyderabad are expected to
attract corporations to the city. Patancheravu on
NH 9, which has access to Bangalore andVijayawada, has an established manufacturing hub
and has recently witnessed the growth of
sectors such as warehousing and logistics.
Visakhapatnam
Visakhapatnam is an important centre for
industrial development in India as it is also the
largest port in the country. The second port at
Gangavaram will further increase trading
opportunity and efficiency thus attracting more
industries to set up base in this region.Warehousing facilities, strong connectivity and
upcoming infrastructural initiatives such as the
international airport make this location
attractive for various sectors like heavy
industries, fertilizer, oil and gas. The proposed
Petroleum, Chemicals and Petrochemical
Investment region (PCPIR) on the Kakinanda-
Visakhapatnam coastal corridor is expected to
be spread over 604 sq. km which has already
attracted large corporations to the area and
smaller support industries are following suit.
There are various food processing units that are
established and currently being set up in order
to cater to the seafood export industry that
leverages from the established fishing industry. In
the recent years there has been an influx of large
textile corporations moving into the city due to
the SEZ and textile parks being set up in the city
limits. The setting up of the Jawaharlal Nehru
Pharma City (SEZ) - a 2200 acre campus
development - has worked as the necessary
catalyst for the growth of the pharmaceutical
industry.
11
The second port atGangavaram will
further increase
trading opportunity
and efficiency thus
attracting more
industries to set up
base in this region.
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machine tools, steel, cement, pharmaceuticals,food processing, apparels and textiles,
electronics, IT and biotechnology.
Some of the Incentives and concessions under
the New Industrial Policy (2006-2011)
Capital investment subsidy to small scale
industries (SSI) in all areas
Exemption of electricity duty on captive
power plants
Exemption of stamp duty and reduction of
registration charges in thrust areas
Waiver of conversion fee for up to 50 acres
in thrust areas
Reduction of 18% on land acquisition
charges through Karnataka Industrial Areas
Development Board (KIADB) in thrust areas
Subsidy of up to $200,000 for setting up of
effluent treatment plant in any area
Entry tax concessions for 3/5 years on
capital goods/ raw materials in thrust areas
The new Industrial Policy for 2006-2011 aims to
achieve a Gross State Domestic Product
(GSDP) growth rate of 9% per annum and 12%
average annual growth over the policy period in
the industrial sector, which accounts for 18% of
GSDP. This growth target will ensure that the
government continues to play an important part
in attracting industries to choose Karnataka as
an ideal location for manufacturing.
Bangalore
Bangalore is home to various industrial houseswhich have set up manufacturing units around
the city giving rise to several industrial zones, of
which Bommasandra, Peenya and Jigani are the
most prominent locations. However, to keep
pace with the rapidly growing industrial sector
new locations like Tumkur, Mysore, Dobaspet
and Kanakpura are gaining prominence in and
around the city. Major industries find Bangalore
favourable due to factors like availability of
skilled workers, easy connectivity, favourable
climate, relatively lower costs.
Mangalore
Mangalore is predominantly characterised by the
oil and gas, port (ship building) related activities
and food processing industries. Some of the
established locations around Mangalore are
Baikampady and Yeyyadi which house small scale
industries. The upcoming export promotion
industrial park's at Ganjimutt is expected to
provide a further fillip to the export oriented
industries in these locations.
Mysore
Mysore has established industries such as
weaving, sandalwood products, and lime and salt
production. The Karnataka Industrial Areas
Development Board (KIADB) has established
four industrial areas in and around Mysore which
are located in Belagola, Belawadi, Hebbal
(Electronic City) and Hootagalli areas. Currently
the city is witnessing heightened interest from
the IT sector and is proving to be a competitor
to Bangalore. There is considerable growth,
powered by IT on the State Highway 17 whichconnects Bangalore and Mysore.
Tamil Nadu is a major contributor to the nations
GDP as it is one of the largest state economies
within India and considered as one of the most
industrialised states in India. In 2006-07, the
manufacturing sector contributed 20.23% to the
GSDP and by 2011 the state plans to raise the
contribution to 27% as specified in the State
Government Industrial Policy 2007.The government is working with various nodal
agencies such as Tamil Nadu Industrial
Development Corporation (TIDCO) aimed at
identifying and promoting establishment of large
and medium scale industries within the State,
State Industries Promotion Corporation of Tamil
Nadu (SIPCOT) aimed to identifying, developing,
and maintaining industrial areas in backward
areas of the State, Tamil Nadu Industrial
Investment Corporation (TIIC) which assist
financially new or existing units in operations
Tamil Nadu
The Commerce andIndustry
Department,
Karnataka Industrial
Area Development
Board and Karnataka
State Industrial
Investment
Development
Corporation
(KSIIDC) have
promoted industrial
infrastructuredevelopment, in
addition to the
incentives, in the
state thus attracting
various new
industries to set up
within the state.
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commencement and expansion and Tamil NaduIndustrial Guidance & Export Promotion Bureau
- which provides comprehensive information,
guidance and support to investors. These
agencies along with other government initiatives
such as single window clearance and incentives
which are sector and location specific and often
customised to the investor depending upon their
needs and the quantum of investment have
contributed to the growth of industrialisation
and investment in the state.
Tamil Nadu has historically been a prominentstate for trading and manufacturing which can be
attributed to the locational benefits of the state.
It is the only state that houses three major ports
- Chennai Port, Ennore Port and Tuticorin Port,
in addition to 14 minor ports. Further
governments infrastructural initiatives have
ensured that the state remains a strong
competitor in investment and presence of
manufacturing and industrial units. Some of the
more prominent industries in the state are
textiles, automobiles and heavy vehicles, auto
components, railway coaches, power pumps,
leather tanning industries, cement, paper etc.
While currently the government is promoting
other industrial sectors such as rubber,
floriculture, biotechnology, and agriculture.
Chennai
Chennai also referred to as the 'Detroit of India'
due to the existence of large auto and auto
auxiliary cluster in and around the city, has also
recently attracted the electronic hardware
manufacturing sector in a large way withcompanies like Nokia, Samsung, Motorola,
Foxconn, Dell, Flextronics etc., setting up their
manufacturing facilities in and around the city.
The development of the IT/ITeS sector has also
brought about large migrant population from
neighbouring cities and states. Chennai is a very
attractive location for industries due to
excellent connectivity through road, rail and sea,
additionally availability of skilled manpower and
presence of international air transport makes it
an ideal location for exporters.
Sriperumbudur
Sriperumbudur, situated just a little over 40 km
from Chennai, gained prominence due to the
setting up of manufacturing units by companies
like Saint Gobain and Hyundai in the area and is
now being showcased as an ideal location for
future development due to the establishment of
various telecom manufacturers such as Nokia,
Motorola, and Samsung.
Emerging locations such as Oragadam, Ennore
and the NH 5 corridors are also gainingprominence due to the availability of large land
parcels, availability of land subsidised by the state
government and robust infrastructure
development. Industries are biased towards
certain locations due to their advantages that
can be leveraged in order to make the
operations more efficient and develop a viable
business model as seen with various export
oriented firms being attracted to Ennore due to
the existing port. Industries like logistical firms
prefer to be located on the NH 5 due to the
already existing goods warehousing facility andthe excellent connectivity through the golden
quadrilateral to east India.
Tiruchirappalli
Tiruchirappalli with the presence of BHEL,
ordnance factory, Dalmia Cement and other
prominent corporations is a major engineering,
manufacturing and fabrication hub. There are also
smaller agricultural and food processing based
industries on the peripheries of Tiruchirappalli
and towards Coimbatore which is expected togrow in the future due to its logistical advantage
of being connected to large cities such as
Chennai, Madurai, Nagappattinam and
Coimbatore. With multiple national highways
(NH 45, NH 45B, NH 67, NH 210, NH 227)
running through it and multiple railway stations
such as Tiruchirapalli Junction, Tiruchirapalli
Town, Tiruchirapalli Fort, Tiruchirapalli Palakkarai
etc. and an international airport that is being
upgraded, the city is expected to transform itself
as not only a manufacturing centre but also as a
logistical trading hub.
Tamil Nadu hashistorically been a
prominent state for
trading and
manufacturing this
can be attributed to
the locational
benefits of the state.
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Coimbatore
Coimbatore district's primary industries are
engineering, textiles, hosiery and poultry with
the city having headquarters of corporates such
as Pricol, LMW, ELGI, Suguna and Bromark
Pioneer Poultry. It is also known as the
Manchester of South India due to the strong
presence of textile industry especially seen in
the town of Tiruppur - the largest garment
manufacturing and exporting cluster in India. The
cotton fields in the district helps to keep input
costs low thus making it a highly competitivemarket. Investment from Suzlon and Hansen
transmission could transform the area to a
major player in the alternative energy and
manufacturing components arena.
Karur
Karur is an established hub for the bus body
building industries where most of the private
buses used in south India are manufactured in
this region. The state government owned Tamil
Nadu Newsprint and Papers which is the world's
biggest bagasse based paper mills is also present
here. There are other industries such as textiles,
sugar and cement that are prevalent in this
region. Although the region is centrally located
within the state it offers limited connectivity
through rail and other means of transport thushampering the growth in this region.
The government is also concentrating on certain
corridors such as the Chennai-Manali-Ennore
corridor and the Chengalpattu-Sriperumbudur-
Ranipet corridor currently and at a later stage
the Madurai-Thoothukkudi and Coimbatore -
Salem Corridors will also be developed.
Coimbatoredistrict's primary
industries are
engineering, textiles,
hosiery and poultry
with the city having
headquarters of
corporates such as
Pricol, LMW, ELGI,
Suguna and Bromark
Pioneer Poultry.
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Some key policies and incentives offered by the
state that have helped the industrial sector are:
Waiver in electricity duty for 5 years
50% refund on stamp duty and registration
Subsidy on interest, employment generation
and investment capital
Guidance in identification, allotment,
conversion of land and other infrastructural
facilities
Subsidy for quality improvement in the Small
Scale sector
West Bengal government has identified four
major industrial centers namely Kolkata, Haldia,
Asansol-Durgapur and Kharagpur. Salt Lake is an
exclusive centre for IT/ITeS. The state already
has good connectivity through the golden
quadrilateral and is currently the gateway to the
north eastern states. Good support
infrastructure such as power, communication,
ports and waterways also add to the
attractiveness of the state. The east -west freight
corridor is also expected to provide the
required impetus to the overall industrial growth
of the state.
Kolkata
The state capital is the major hub for the IT/ITeS
sector in locations of Salt Lake and Rajarhat. The
city was forced to expand to the peripheries due
a shortage of land and has since emerged as the
technology centre catering to the growing
requirements of the services industry. Theadjoining districts of South and North 24
Parganas and Howrah are major manufacturing
hubs for industries like jute, steel, leather and
textiles industries.
Haldia
A city on the Haldi River is the home to many
national and international oil and petro -
chemical companies. It is the chemical hub of the
state where the existing industrial base, social
infrastructure and transport linkages make it afavorable choice for further growth of industries
Eastern Corridor
Automobile
Machine Tools
Textile
Drugs & Pharmaceuticals
Source: FedEx and Cushman & Wakefield Research
EASTERN CORRIDOR
West Bengal
West Bengal has traditionally been the centre
for manufacturing and trading. It continues to be
a leading industrial state in the eastern region
with availability of skilled manpower which has
provided the required stimuli for growth.
According to the CMIE -Centre for Monitoring
Indian Economy - estimates in March 2007 the
outstanding investments in the state was US$ 50
billion registering a growth in excess of 100%
over the year. This exceptional growth was
mainly driven by investments in the construction,
manufacturing and power sectors. Traditionally
the state has been the home to several
industries like tea, steel and foundry, leather,
chemicals, coal and textiles to name a few. The
state's initiative to offer a cordial environment to
the investors has resulted in the formation of
"Shilpa Bandhu" a single window agency for
providing investors with every possible
assistance in setting up industrial units within the
state. This has resulted in greater interest from
new industries that are now planning to enter
the state such as metals, ceramics, foodprocessing and automotives.
West Bengal hasindustrial areas in
many districts but
the government has
identified four major
industrial centers
namely Kolkata,
Haldia, Asansol-
Durgapur and
Kharagpur.
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bauxite, manganese, limestone, china clay, fire clay,graphite, kainite, chromite, asbestos, thorium,
sillimanite and uranium. The state holds the
distinction of having the first iron and steel plant
at Jamshedpur, the largest fertilizer factory at
Sindri and the biggest explosives factory at
Gomia. The industrial sector has shown
impressive growth over the years. As per the
Annual Survey of industries, the number of
factories increased from 1,382 in 1999 to over
1,600 in 2007.
The Jharkhand Industrial InfrastructureDevelopment Corporation (JIIDCO) facilitates
and develops infrastructure for industrial
development. Currently, the state has three
Industrial Area Development Authorities
(IADAs) headquartered at Adityapur, Bokaro and
Ranchi. These authorities are responsible for
acquisition of land, development of support
infrastructure facilities like road, drainage, water
supply and public utilities within their
jurisdiction. To provide a boost to the industrial
development in the state, several initiatives of
the government are listed below:
Single Window Clearance for all industries
Assistance in land acquisition
Investment and Interest subsidy at growth
centres
Priority in power allocation in growth centre
The state is mainly dependent on mining and
agriculture, however industrialisation in some
pockets has been the key drivers of the state
economy. The main industrial centres in
Jharkhand are Ranchi, Jamshedpur, Dhanbad and
Bokaro. The government also plans to promote
Ranchi and Jamshedpur as key centres for
IT/ITeS sector. Steel plants, automotives, power,
mining and engineering are the key industries
that are already dominant in the state.
Strengthening of the transport infrastructure has
become a priority for economic, industrial and
social development of Jharkhand. The state is
planning to develop expressways along the main
high-density corridors. It is also in the process of
starting inter state and intra state bus terminals.
The state has an extensive and well developed
of petrochemicals products, fertilizers, oilrefineries, chemicals, ship building and breaking.
A mega petro - chemical industrial estate is
expected soon which will add a new dimension
to the up stream and down stream oil
industries. Another project for Purified
Terephthalic Acid (PTA) is also on the anvil.
Asansol - Durgapur
Located in the western part of the Burdwan
District in South Bengal, Asansol - Durgapur
region has been a prominent industrial belt ofthe state due to the presence of major steel
plants in Burnpur and Durgapur. The coal belt in
the Raniganj area along with many chemical and
engineering industries in the vicinity have helped
the region to be established as a preferred
destination for industrial and mining activities.
Biotech and automobile SEZs are planned at
Kanksha near Panagarh and Andal which is also
expected to have the first Aerotropolis in the
sate. Bankura and Purulia have also successfully
attracted industrialists keen on setting up steel
and cement plants in the region due to thepresence of cost effective land and labour. All
these locations have large land parcels along
with the availability of skilled work force.
Kharagpur
Situated in the prime railway junction
approximately 120 kms from Kolkata, Kharagpur
shares the borders of Jharkhand. Several
engineering industries are already present and
are projected to be the home for steel and auto
components industry. Proposed biotech andiron and steel parks will add significantly to the
industrial prominence of the sector.
Jharkhand, by virtue of being in the Chhota
Nagpur area, is rich in natural resources. The
area was one of India's first industrial locations
to be developed by the government. Many
public- private partnership endevours were set
up in Jharkhand through the first phase of
industrialisation of modern India. The state haslarge reserves of iron ore, coal, copper, mica,
Jharkhand
The JharkhandIndustrial
Infrastructure
Development
Corporation
(JIIDCO) facilitates
and develops
infrastructure for
industrial
development.
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railway system providing vital links to the miningindustry with important cities and ports of the
country.
Ranchi
The capital city of Jharkhand is also an important
industrial location housing several heavy
engineering companies within its vicinity along
with various coal mines. Due to the rapid pace
of urbanisation and the lack of space, the state
aims to develop a technology park in the
suburbs to attract the growing services sector.The industrial area around the city is dotted
with companies engaged in the production of
heavy engineering, automobiles, steel rods,
aluminium, electric equipment, transformer oil,
paraffin and petroleum jelly.
Jamshedpur
Tata Nagar at Jamshedpur is the first iron and
steel city in India and is located in East
Singhbhum district. The city was founded by late
Jamshedji Nusserwanji Tata. The areassurrounding Jamshedpur has abundant natural
resources like iron ore, coal and lime, which
form raw materials for the steel industry.
Adityapur, located in close proximity to the steel
plants of Jamshedpur and Bokaro, Heavy
Engineering Corporation in Ranchi, Uranium
Corporation in Ghatsila and Hindustan Copper
Limited in Jadugoda are fast emerging as the
industrial centre of the east. This forms the heart
of the Chhotanagpur belt which has transformed
to an industrial hub. To provide the necessary
impetus to the development of sectors likeautomobile and auto components. A SEZ is also
notified in Adityapur. These areas have the
advantage of being in the area richest in natural
resources.
Dhanbad and Bokaro
This district sharing borders with West Bengal
and Bihar is the coal capital of the nation. The
metallurgical coal of the Jharia coalfield has given
Dhanbad an important place in the industrial
map of the nation. Coal has attracted andbrought about a concentration of numerous
other industries. This region is home to severalmines, coal washeries, engineering, fertilizer and
cement industries. This area is ideally suited for
coal products and small engineering industries.
Bokaro Steel City is located in the eastern part
of the state and is home to one of the largest
steel plants in India, Bokaro Steel Plant, which is
a part of Steel Authority of India Limited. The
first blast furnace was started in 1972. The first
methane gas well was also established here at
Parwatpur. The Damodar Valley Corporation
(DVC) runs two thermal power plants in thedistrict. There are other industries like LPG
bottling plants as well as oil and gas companies in
the district.
Orissa is the second most mineralised states in
India with vast mineral deposits of coal, iron ore,
manganese ore, bauxite and chromites. Several
well known mineral-based industries have been
attracted to the state. Traditionally an industrial
state, due to its proximity to the Chhota Nagpurarea, in recent times, Orissa has once again
started to attract attention of national and
international investors as a prominent
destination for industrial investment. Rourkela
Steel Plant was a major initiative to provide the
required momentum to this state. Metals and
mining has been the key industries in the state
along with the traditional textiles industry.
The state government has taken several steps to
improve industrial infrastructure and promote
investments in the state. Significant among themare:
Development of industrial and social
infrastructure in steel and mining corridors,
including setting up of railway corridors,
upgrading ports, creating expressways
Major expansion of Paradeep Port underway
through public private partnership (PPP);
Land allocation at subsidised rates
Exemption of electricity duty for 5 years
The state government has reaffirmed itscommitment to transform Orissa into a vibrant
Orissa
Orissa has onceagain started to
attract attention of
national and
international
investors as a
prominent
destination for
industrial
investment.
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industrial state and has reformulated theIndustrial Policy in March 2007 which aims at
creating a more conducive business environment
that will raise income, employment and
economic growth. The Industrial Promotion and
Investment Corporation of Orissa Ltd (IPICOL)
is a key promotional institution that was
incorporated in 1973 with the main objective of
accelerating the pace of industrial development
by promoting large and medium scale industries.
An efficient network of roads, railways, ports
and aviation provide the necessary impetus forthe development of the industrial zones. Power
and telecom also form a part of the robust
physical infrastructure of the state and is the
binding force for the key industrial locations of
Angul and Bolangir, Cuttack, Jharsugda and
Jagatsinghpur.
Angul and Bolangir
Due to the availability of rich mineral deposits,
this locations is dotted with several mining and
metal based industries, power generation andengineering industries. These locations have
many small scale industries that help generate
significant investments and employment.
Cuttack
Famous for its the traditional textiles and
handicrafts, Cuttak also houses several other
industries such as paper mills, metal work and
food processing industries. Hosiery and knit
wear are the key industries that are instrumental
in the industrial development of the region.
Jharsugda and Jagatsinghpur
The districts of Jharsugda and Jagatsinghpur are
known for the manufacturing of steel and related
products. Availability of the requisite talent pool
has helped this location to emerge as a
preferred industrial centre. Shipping and food
processing are some new age industries that
have gained importance in the past.
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Simplification of rules and procedures by theexisting state level "Single Window Clearance
and Monitoring Authority"
The above incentives from state and central
government have attracted fruitful investments
and major industrial players (like Blue Star, TVS,
Cadbury, Pidilite, Hindustan Unilever Limited,
Nestle, and Mahindra & Mahindra). Locations like
Baddi in Salon, Sirmour, Kangra, Una and Mandi
are key industrial locations in Himachal.
Uttrarakhand is one of the latest states carved
out of Uttar Pradesh in November 2000. Since
its inception, the state government has taken
rapid strives in development of industrial hubs in
the state. High literacy rate of over 72%,
availability of rich mineral deposits and
availability of uninterrupted power are key
advantages available to state of Uttarakhand.
Agro food, pharmaceuticals and electronic
sectors and their allied industries have
registered their presence in Uttarakhand. Thestate's share of the total investment proposals in
the country has more than doubled since its
inception in 2000. Approximately US$ 2 billion
worth of investment is expected to be made in
the automobile, pharmaceuticals, processed food,
and fast moving consumer goods sectors in the
near future.
Major fiscal and non fiscal incentives being made
available by state government of Uttrakhand
includes:
100% relief in Excise duty for 10 years and100% income tax exemption for first 5 years
Central Sales Tax levied at concessional rate
of 1%.
Stamp duty concessions to be provided for
land in identified areas.
Capital investment subsidy of 15% and
interest subsidy of 3-5% for small scale
industries.
Simplification and rationalisation of labour
laws and single window clearance to reduceproject delays.
Uttarakhand
Promote private sector participation indevelopment of infrastructure projects.
Pant Nagar and Haridwar have emerged as
attractive industrial locations in the state.
Currently 3 integrated industrial corridors have
been developed at Haridwar. Sitarganj and
Siggadi are other prominent locations in
Uttarakhand which have witnessed major
industrial development in the state.
In Punjab small scale industries dominate the
industrial scene with approximately 47% of the
total manufacturing sector in Punjab. The other
thrust sectors for the state are chemicals, metals
and pharmaceuticals. The state's key industries
include automotive and auto components,
bicycles and bicycle parts, food products, light
engineering goods, paper and paper products,
sports goods and textiles. The established
industrial locations are Ludhiana, Patiala, Roop
Nagar, Amritsar, Bathinda and Jalandar. Industrial
infrastructure, roadways as well as housingprojects and commercial complexes have seen
the maximum investment inflow in the recent
past. The state is also focused on sector-specific
infrastructure for food, apparel, biotech, IT and
electronics sectors. In terms of SEZ space,
Quark City, Mohali, has been granted SEZ status
to promote IT/electronics industries, as well as
to the Ranbaxy SEZ at SAS Nagar, also in Mohali.
The Industrial Policy of Punjab is aimed at
developing infrastructure and speedy clearance
of new projects. Key highlights of industrialpolicy are as follows:
Replace Octroi and entry tax with a single
Local Area Development Tax (LADT)
Infrastructure development though private
sector participation by setting up of Special
Purpose Vehicles (SPVs)
Freight subsidy for exports
Customised sector specific policies for
biotech and apparel sector and proposed
industries in border areas.
Punjab
Agro food,pharmaceuticals and
electronic sectors
and their allied
industries have
registered their
presence in
Uttarakhand.
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Project of upto 3 crores to be cleared by theDistrict level committee under the
Chairmanship of the District Collector
2% interest subsidy at documented rate of
interest of Financial Institutions to an SSI
project having plant & machinery worth not
exceeding INR 100 lakhs.
25% of the cost of DG Set limited to INR
250,000 is granted to SSI units for the
purchase of DG Set.
SSI units are eligible to get INR 10,000 perproduct to get BIS certification mark
To encourage cottage industries amongst
women entrepreneurs to motivate them to
opt for self employment women are being
provided training through DICs and NGOs.
To promote and help in marketing the
products of Handicrafts, Handlooms and SSI
Sector, Udyog Mela/ Exhibitions are
organised at Naitonal, State and District
Level.
Major existing industrial belts of Rajasthan
include Jaipur, Alwar, Kota, Bhilwara and Jodhpur.
The proposed development of DMIC is likely to
further develop industrial areas in Jaipur, Dausa
and Bhilwara. Alwar and Bharatpur are other
prominent industrial hubs which have presence
of industries like cement, chemicals, dyes,
electronics, engineering machines and food
processing. Prominent industrial hubs such as
Kota, Jaipur, Bikaner and Bhilwara have the
presence of textile, leather, engineering goods,
and electronics. Bawal, located on the Haryana
border, provides a link between Jaipur and Delhi
thus allowing goods to move both upstream and
downstream into neighbouring states.
The National Capital Region (NCR) is the focal
point for many commercial and IT/ITeS activities
in North India and has historically been an
attractive location for industrial activities such as
automobiles, light engineering, textiles,
The National Capital Region (NCR)
Upcoming industrial infrastructure in Punjabincludes:
Electronics Township (ELTOP), Mohali, which also
includes a Software Technology Park, is jointly
promoted by Punjab InfoTech Corp and the
Department of Information Technology.
Food Park Project, Sirhind spread over 25 acres,
which is a joint initiative between an Non-
Resident Indians group and Punjab Agro
Industries Corporation. One of India's largest
and most sophisticated integrated foodprocessing complex, it has an annual capacity of
over 5,000 MT.
Apparel Park, Doraha, is an Integrated Textile
Park, with 115 plots, jointly developed by the
Punjab Small Industry and Export Corporation
Limited and the Association of Textile Industry.
Biotech Park, Dera Bassi, a Public Private
Partnership initiative between the Punjab State
Council for Science and Technology and Beckons
Industries, it would comprise 10-15 industrial
units in agri-biotech and health care sectors.
Industrial performance of Rajasthan has been
driven largely by small scale industries
dominated by key industries like food processing,
agro industries, engineering products, cement,
ceramic and marble and handicrafts. The state's
proactive role in developing skilled and semi-
skilled work force has helped in increasing the
attractiveness of this region, in establishing it as a
preferred industrial location for food processingand engineering products. State is focusing on
developing sector specific infrastructure for
food, apparel and electronic sector. While the
export promotion industrial park near Jaipur is
one of the largest parks in north India, similar
industrial parks are being developed at Alwar
and Jodhpur. Theme parks with facilities for a
particular industry and upcoming SEZs are other
major infrasture developments currently
underway in Rajasthan. Some of the incentives
offered by the state are:
Rajasthan
Alwar and Bharatpurare other prominent
industrial hubs
which have presence
of major industries
like cement,
chemicals, dyes,
electronics,
engineering
machines and food
processing.
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pharmaceuticals etc. Various companies haveestablished their corporate headquarters as well
as production units in the NCR mainly because
of good connectivity through land and air, its
large existing consumer markets and robust
infrastructure initiatives. The North Western
Freight Corridor, Golden Quadrilateral, Eastern
and Western Peripheral Roads and the North
South Corridor have all helped increase
connectivity to this region. The proposed airport
in Greater Noida along with the expansion of
the cargo hub in the existing Delhi international
airport will be added advantages of this location.
Traditional industrial locations of Okhla, Mohan
Cooperative Area and NOIDA have been
saturated especially with the entry of IT/ITeS
companies which have preferred these locations
as they are situated in the heart of the city.
Additionally the Delhi Government's drive to
relocate polluting units outside of the city has
further helped peripheral locations to develop
into industrial locations while maintaining the
advantage of being close to the national capital.
This move has increased rentals due to high
demand, forcing industrial facilities to relocate to
peripheral locations of NCR in U.P and Haryana
such as Rohtak, Bhiwadi and Greater Noida etc.
Uttar Pradesh offers easy availability of land in
239 fully developed industrial areas, spread over
37,388 acres. Its industrial infrastructure also
includes several Industrial Infrastructure
Development Centres (IIDCs) and
approximately eight notified SEZs. There arevarious prevalent industries in this state which
enables it to achieve the title of the 2nd largest
economy in the country. Agriculture continues
to remain the most prevalent sector after this
the cottage industries of handlooms and
handicrafts would be the most prevalent in this
state providing employment to the large skilled
and unskilled worker base.
The UP government or the governing body (in
the case of NOIDA, Greater NOIDA etc.) offer
attractive incentives which are customised to
Uttar Pradesh (UP)
the investors needs depending upon theinvestment quantum, employment opportunity,
region and type of industry being established.
UP's thrust industries include sectors like
Biotech, IT/ITeS, Food and agro-processing units,
and textiles. Varanasi has attracted a proposal
for a Textile Park and SEZ. Integrated Logistics
Hubs/Free Trade Warehousing Zones have been
proposed in collaboration with IL&FS, Mineral &
Mining Trading Corporation and Mitsui (Japan).
An Integrated Agro/Food Processing Zones has
been proposed at Hapur.
Ghaziabad, NOIDA & Greater NOIDA:
Ghaziabad is already home to several small and
medium industries and with the upcoming Taj
and Ganga Expressway the attention is steadily
moving away from the established corridors of
NOIDA towards Greater NOIDA. Apart from
IT/ITeS, there are several other industries that
are also evaluating possible opportunities of
foraying into the newly planned developments of
Greater NOIDA, along with developers who
have already begun developing commercial, retailand residential projects to cater to these
industrial pockets.
Haryana is one of the leading industrialised
states with an inclination towards the
automobile industry. The state has the presence
of various manufacturing corporations such as
Maruti Udyog, Honda, Escorts, Hero Honda.
Already existing locations of Gurgaon and
Faridabad constitute towards the bulk ofproduction and revenue generation for the state.
Industries are considering other locations in
order to avail cheaper rentals, incentives and
robust infrastructure that is being provided by
the government.
Some incentives include:
Interest free loan, quantified at 50% of tax
paid on sale of goods sold and 75% for food
processing units, repayable after a period of
5 years
Haryana
Traditional industriallocations of Okhla,
Mohan Cooperative
Area and NOIDA
have been saturated
especially with the
entry of IT/ITeS
companies which
have preferred these
locations as they are
situated in the heart
of the city.
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Subsidy up to 1% of FOB of export unitssubject to a maximum of INR 1 Million P.A.
Exemption from electricity duty for 5 years
Manesar, Dharuhera & Rewari:
Located in Haryana (along NH 8) and in close
proximity to Delhi and Gurgaon, these regions
have availability of large land parcels and lower
cost of labour which has provided the necessary
The focus ofdevelopment is
gradually shifting
from the peripheries
of major
metropolitan
centres to the
emerging locations
along highways,
railway corridors
and Tier II and III
cities, which are fast
emerging as thefuture growth
centres.
impetus to transform the area into industrialzones. Haryana State Industrial Development
Corporation (HSIDC) has successfully
developed an Industrial Model Township in
Manesar and is planning to develop an additional
2 IMT's. Companies like Hero Honda and Maruti
Udyog are some of the major automobile giants
already present here, along with several auto
ancillary units in the pipeline.
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eager to set up such units. The western and
southern states of Maharashtra and Tamil Nadu
have successfully attracted various domestic and
global automobile manufacturers and numerous
auto ancillary units. In the north, the automobile
sector is limited to NCR, while the eastern
states have a major focus on steel and heavy
engineering.
State governments have also geared up in their
own ways to develop themselves as facilitators.
They have proactively announced many
incentives and are developing areas to cater to
the growing demand from the industrial sectors.
The Central Government has in turn eased
certain regulatory requirements to further the
cause pioneered by the state government. States
such as Himachal Pradesh, Jharkhand and Andhra
Pradesh have initiated single window clearance
in an attempt to accelerate and ease the
processes. Similarly the eastern states of
Jharkhand and Orissa have assured assistance
and subsidy in land acquisition. Uttaranchal,Gujarat, Jharkhand and Tamil Nadu have provided
tax holidays and concessions on investments
industrial development. There are also special
subsidies for employment generation in West
Bengal and capital investment and fixed assets in
Uttaranchal and Maharashtra.
Our studies have revealed that various industrial
growth centres have been developed across the
country, covering a total development of
approximately 363,263 acres. The southern zone
being the frontrunner, has the largest shareamounting to approximately 236,656 acres
spread across the three major states of Tamil
Nadu, Karnataka and Andhra Pradesh, followed
by the west. The government acknowledges the
role of SMEs and their growth has been
exemplary, particularly of industries like
automobile, steel products, machine tools,
textiles and apparels, chemical and
pharmaceuticals.
Several international corporations continue to
exhibit their confidence in India for outsourcingtheir manufacturing facilities and backend
OUTLOOK
To maintain an accelerated growth of the
economy, which is triggered mainly by the
booming services sector, the government has
taken a keener interest in the country's
industrial sector. Various state governments have
also taken major initiatives to attract industries
and generate revenue as well as employment in
their respective states by promoting existing or
new industrial sectors. It is observed that certain
industries prefer certain specific geographical
locations due to their inherent attributes andclassical factors of economies of scale and
benefit from the synergies due to the presence
of other industries in the vicinity. However, this
scenario is rapidly undergoing a transformation
and industrialists are now willing to explore
newer horizons and leverage incentives offered
by the various state governments and ease of
operations. The state governments have been
conscious in assessing their states both in terms
of the traditional benefits enjoyed states enjoy as
well as evaluating their regions for setting up of
new age industrial activities which would
enhance their state's revenue flows and
economic growth.
New age sectors like food processing,
pharmaceuticals and biotechnology, along with
IT/ITeS are some of the industries are being
preferred for promotion by most state
governments due to their non-polluting and high
return nature. However, the western and
southern zones have been the principal hubs,
where most of the major players of the new age
sectors are already present. Whilst there is notexactly an equitable distribution of industries
across the country with clear pockets of
development of a certain kind of industry in
certain specific states, however, most states are
trying to attract more and more industries from
different sectors.
The northern states of Himachal Pradesh and
Uttaranchal have been promoting their industrial
locations to attract industries like food
processing and pharmaceutical units. Similarly,
the textiles and apparel industry is also spreadacross the country, with most state governments
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activities. Industrial segments like retail, telecom,banking, logistics and IT are expected to sustain
their performance, leading to increased demand
for land in and around key growth centres. The
clustering of industries will continue to take
place resulting in greater efficiency and lower
costs for manufactures. Encouraging the growth
of sector-specific industries in suitable locations.
This in turn will add to the unique dynamics
prevalent in the distribution of land holdings,
town planning and developments in each
location.
North* East** West*** South****
Food Processing
Pharmaceutical andBiotechnology
Textiles and Garments
Gems and Jewellery
Single windowclearance
Subsidy on capitalinvestment
Exemption on exciseduty and