Manufacturing Sector Profile
SECTOR PROFILE
Table of Contents 4.4 Chemicals & Petrochemicals
1
India - Preferred investment destination
2
Gujarat - Preferred investment destination in India
- Overview
3
Manufacturing sector in Gujarat - Overview and focus sub sectors
- Policy interventions
Manufacturing focus sub-sectors
- Investment Opportunities
4
4.1 Engineering
- Gujarat Scenario – Year 2017
4.5 Pharmaceuticals & Biotechnology
- Overview
- Overview
- Gujarat Scenario – 2017
- Policy interventions
- Interventions planned
- Investment Opportunities
- Investment Opportunities
4.6 Gems & Jewellery
4.2 Technical Textile
- Overview
- Overview
- Policy interventions
- Policy intervention
- Investment Opportunities
- Gujarat scenario - 2017
5
Advantage Gujarat
- Interventions planned
6
Doing business in Gujarat
- Investment Opportunities 4.3 Auto - Overview - Gujarat Scenario – 2020 - Policy Initiatives and Interventions planned - Investment opportunities
INDIA - PREFERRED INVESTMENT DESTINATION
1 01
INDIA - PREFERRED INVESTMENT DESTINATION
Trade Scenario, USD billion
9th largest economy in the world by nominal GDP and 3rd largest by purchasing power parity (PPP)
FDI Confidence Index, 2012 A.T. Kearney Survey
400
CAGR Exports 14%
300 250
Recorded the highest growth rates in the mid-2000s
1.87
China
350
CAGR Imports 14%
1.73
India
200
1.6
Brazil
150 100
US
1.52
Germany
1.52
Growth
50
Decline
0
One of the fastest growing economies in the world (GDP growth rate – 8.6% in 2011)
15.0%
9.5%
9.6%
9.3%
2000-01
Export
2004-05
2010-11
Import
0
8.6%
8.0%
6.8%
1994-95
India is one of the major G-20 economies: the 17th largest exporter and 11th largest importer in the world
GDP growth rate 10.0%
1990-91
1
1.5
2
FDI - Top Sectors Automobile industry 6% Power 7% Construction activities 10%
Metallurgical Pharmaceuticals industries 5% 5%
Petroleum and natural gas 3%
Services 30%
Main Export Partners
5.0% 0.0% 2006
2007
2008
2009
2010
2011-12 (A)
16%
2010-11 (Q)
17%
2009-10
17%
2008-09
18%
2007-08
19%
2006-07
20% -
59%
25%
57%
26%
UAE 12%
China 8%
Hong Kong 4%
Main Import Partners
56%
26%
54% 400
Computer software and hardware 11%
Telecommunications 12%
The 2nd preferred global investment destination (World Investment Prospects Survey 2010-2012 by UNCTAD)
56%
25% 26% 600
800
1,000
1,200
USD, billion Agriculture
US 13%
58%
26%
200
Real estate 11%
2011
Sectors’ contribution to GDP
02
0.5
No Change
Industry
Services
China 12%
UAE Saudi Arabia US 7% 6% 6%
Australia 5%
USD 254 billion of FDI inflows between April 2000 and March 2012
ADVANTAGE INDIA
World's largest democr democracy with 1.2 billion people
Land of abundant natur natural resources and div diverse climatic conditions
Enabling business en environment with gr greater global participation
Strong Mark Market Fundamen Fundamentals
Access to technology as a rresult of the IT revolution
Impetus on Infrastruc Infrastructure De Development
Progressive simplific simplification and rationaliza rationalization of direct and indirect tax structures
Competitively pric priced skilled labour
03
GUJARAT - PREFERRED INVESTMENT DESTINATION IN INDIA
2 04
GUJARAT HAS BEEN RANKED 1ST AS PER THE “ECONOMIC FREEDOM RANKINGS FOR THE STATES OF INDIA, 2012” REPORT Double digit growth rate with Gross State Domestic Product of USD 75 billion (2010-11) growing at a five year average of Growth in agricultural output in the state over the last 10 years A highly industrialized state - Gross State Domestic Product contribution from manufacturing sector
10% 11% 28%
Gujarat’s Degree of Openness (ratio of exports from state to Gross State Domestic Product)
53%
A state with a population of 60 million and one of the highest urbanization levels
43%
Increase in seat availability in technical institutions over last 3 years
A state with a high and growing literacy rate A state with one of the highest share in investments under implemented projects in India
100% 79% 26%
05
MANUFACTURING SECTOR IN GUJARAT - OVERVIEW AND FOCUS SUB SECTORS
3 06
MANUFACTURING SECTOR CONTRIBUTES 29.7% OF GSDP IN GUJARAT
• GSDP of manufacturing sector of Gujarat is ~ Rs. 131,889 crore (USD 26.4 billion) (at current prices) in 2010-11 • Total investment by 2010 in the manufacturing sector in Gujarat was Rs. 342,079 crore (USD 68.4 billion) • CAGR of investments in manufacturing sector in last 6 years ~ 19%
Gujarat aspires to become a beacon of comprehensive social and economic development by
Investments in manufacturing sector (Rs. crore)
Creating more employment
400,000 300,000
Development of entire value chain of the sector
CAGR - 19%
200,000 100,000
0 09
-1
9
Focusing on value addition in product development/ processes
20
20
08
-0
8 20
07
-0
7 20 06 -0
6 20 05 -0
20 04 -0
5
-
Development of knowledge base in sectors Sustainable development
07
GUJARAT – INVESTMENT REQUIREMENTS
• The size of the Indian economy is likely to be around US $ 3.8 trillion by 2025 – assuming an 8% CAGR • The GSDP of Gujarat is likely to be around US $ 780 billion by 2025 • Manufacturing sector in Gujarat likely to be around US $ 200 billion by 2025 By 2017 • Incremental investments required in Manufacturing sector by 2017 would be around US $ 80 billion • Currently, major investments in Gujarat in Manufacturing sector are in Chemical, Textiles and Engineering. • Defence offsets and agri business parks are upcoming sectors that are likely to attract investments in the State
08
GUJARAT AIMS TO ACHIEVE ~32% OF THE CONTRIBUTION FROM MANUFACTURING SECTOR IN THE NEXT 5 YEARS Contribution by manufacturing sector ~ 25.7% of GSDP in Gujarat
Secondary sector of Gujarat contributes ~ 35.9% of GSDP
Sectors that contribute to ~ 80% of manufacturing sector output
Fabricated metal products except machinery
Textiles
Coke refined petroleum products and nuclear fuel
Chemical and chemical products
Basic metals
Fabricated metal products, except machinery and equipment
Machinery and equipment
Pharmaceuticals, medical chemical and botanical
Food products
The following sub-sectors drive the growth of these major sectors
Technical Textiles
Speciality chemicals
Gems & Jewellery
Precision Engineering including defence offsets
Auto and Automobiles
Pharmaceuticals & Biotechnology
Food and Agri products
09
NATIONAL INVESTMENT AND MANUFACTURING ZONE AHMEDABAD- DHOLERA SPECIAL INVESTMENT REGION
• PROPOSED INTERNATIONAL AIRPORT @ FEDRA • SH-6 AND SH-20 PASSING THROUGH • CONNECTED TO NH-8 • ABUTTING TO PROPOSED KALPSAR PROJECT
Source :Government of Gujarat 10
NATIONAL INVESTMENT AND MANUFACTURING ZONE (SANAND-BECHARJI)
Becharji Manufacturing Zone Viragam Special Investment Region Sanand Cluster Ahmedabad Urban Development Authority Dholera Special Investment Region
Source :Government of Gujarat 11
MANUFACTURING FOCUS SUB-SECTORS
4 12
ENGINEERING
4.1 13
OVERVIEW
4.1.1 14
GLOBALLY, ASIA IS THE LARGEST PRODUCTION CENTER
Key global engineering segment output estimates (In Rs. billion) 8,000 Engineering services
7,000 6,000
Heavy electrical equipment
5,000 4,000
Industrial Machinery
• North America, Europe, and North Asia are the largest service providers; contributing 91% of the overall global market • Asia-Pacific is the largest producer; contributing 38.4% of the global market • America and Asia Pacific region are the largest producers; contributing ~71% of the overall global production
3,000 Machine Tools
2,000 1,000
Electrical equipment
2010
2011
2012*
2013*
2014*
2015*
• Globally, China is the largest producer and consumer of machine tools; contributing ~42% and ~30% of global consumption & production respectively
• Asia is the largest production center; contributing ~40% of the global market
Source:2012 World Machine Tools Output & Consumption Survey, IBISWorld Pvt Ltd, Datamonitor Plc, PwC analysis Note: * Forecasted Rate of 1 USD = Rs. 50. (assumed) 15
INDIA – ONE OF THE KEY LEADING MARKETS IN ASIA Size of key engineering segments (in Rs. Crore)
• Indian engineering sector is divided into; Heavy and light engineering •
Heavy engineering sector contributes ~80% of the overall market output
•
Sector is largely dominated by organized players
• Engineering accounts for ~29% of the total workforce employed in the organized sector in India • Europe, Asia and Middle East are the largest export destinations of India; contributing above 60% of the overall engineering exports
35,000 30,000 25,000 20,000 15,000 10,000 5,000 Electric generators Turbines Boilers Machine tools
Exports by segment in 2011 9% 27%
13%
Iron and steel Electronic goods Manufacturing of metals
14% Machinery and instruments 20% 17%
Other engineering goods Transport equipments
* Note: 1 USD = Rs.50
Source: Department of Heavy Engineering, EEPC, IBEF 16
2008-09
2009-10
2010-11
1,778
2,117
2,580
4,193
5,428
6,990
10,154
12,764
17,018
2,138
2,484
3,624
Engineering Exports (In Rs. crore)* 400,000
8.5%
R-1
300,000
CAG
200,000 100,000
2007
2008
2009
2010
2011
KEY EMERGING ENGINEERING SECTORS Defence offsets
• India's spending on Defence sector is expected to exceed Rs. 5,000 billion over the next 5 years • Around 40 projects involving offset obligations of Rs. 40,000 crore – are in the pipeline and are at different stages of bidding • Estimates show that the Indian Air Force will have more than 1,000 fighter jets and around 60 squadrons by 2030
Electronic system & design manufacturing • Indian electronic industry market demand was estimated around Rs. 2,250 billion in 2008-09; expected to grow to around Rs. 20,000 billion by 2020 • Domestic electronic industry production was estimated around Rs. 1,000 billion in 2008-09; expected to grow to around Rs. 5,000 billion by 2020 • Electronic industry imports are expected to grow at around 50-75% yearly
Source: Ministry of Communication and Information Technology, CII estimates 17
GUJARAT – A KEY ENGINEERING PRODUCTION CENTER OF INDIA
Gujarat's contribution in India Fabrication of metal products
16.2%
Machinery and equipment
12.7% 10.4%
Baasic metals
9.0%
Transport equipment
6.7%
Electrical equipment Electronics 0.0%
6.0% 5.0%
10.0%
15.0%
Some of the leading players in engineering sector • Gujarat contributes around 9% to national engineering output and around 8% to the national engineering workforce • The sector contributes around 18% to total industrial production in Gujarat • Gujarat is home to more than 30 engineering clusters; housing around 5,000 engineering factories in and around these clusters in the state
Source; ASI 2009-10, GIDB, IC Office 18
KEY ENABLERS FOR ENGINEERING SECTOR IN GUJARAT
6, Presence across the value chain
5, Integrated Industrial Infrastructure
4, Availability of skilled manpower
1, Strong local emand
2, Foreign investments and technology transfer
3, Sound base of Engineering SME clusters
19
1. STRONG LOCAL DEMAND
• The engineering sector is dependent on its end consuming sectors such as power, infrastructure and manufacturing. The growth of the engineering sector is directly contingent on the growth of these sectors. All these sectors are having vibrant presence in Gujarat. These sectors have huge demand of engineering products; which has contributed to huge presence of SME engineering firms across Gujarat
Power
Gujarat is the only power-surplus state in the country. The state envisages to increase the existing power generation capacity of the state to 30,000 MW by 2020. This will lead huge demand for the engineering sector.
Infrastructure
Manufacturing
The Blueprint for Infrastructure in Gujarat 2020 (BIG 2020); an integrated plan for Infrastructure development envisages an investment of Rs. 10,29,177 crore across 18 infrastructure sectors. (excluding investments in power sector worth Rs. 1,51,735 crore)
The end consuming sectors like Textile, Cement, Oil & Gas, Mining etc also have vibrant presence in the state; leading to local demand for Industrial machinery and machine tools for the respective sectors.
Source: PwC analysis, Socio-economic review 2010-11 20
Gujarat contributes to 31% of the national textile output
The mineral and quarrying industry in state is estimated ~$2 bn. It houses more than 6500 mineral based industries in the state. State contributes 53% and 31% to national Crude Oil and Natural Gas output respectively
2. FOREIGN INVESTMENTS AND TECHNOLOGY TRANSFER AGREEMENTS IN THE ENGINEERING SECTOR *Foreign Technology Agreements in Gujarat during 1991 to 2011
Engineering
• Engineering sector has attracted investments worth rs. 4,481 crore during 1991 to 2011; contributing 12.66% of the overall FDI attracted by Gujarat during the same period
Chemicals & Petrochemicals Pharmaceutical Textile Glass Ceramics Others
*FDI in Gujarat during 1991 to 2011
• Engineering sector contributes about 59.31% of the total foreign technology transfer agreements commissioned/under implementation in terms of investments
Engineering Food processing Textile Chemical & Petrochemical Pharmaceutical Glass & Ceramics Infrastructure
Source: iNDEXTb, *Note: The data is for projects/agreements which are already commissioned or are under implementation during the period 1/1/1991 to 31/10/2011 21
3. SOUND BASE OF ENGINEERING SME CLUSTERS
• Ahmedabad, Anand, Rajkot, Vadodara, Surendranagar, Jamnagar, Mehsana, Panchmahal and Kutch have emerged as favored locations Banaskantha
Patan Mehsana
Sabarkantha Foundry & Forgings
Kutch
Steel Pipes and tubes
Gandhinagar Kheda
Surendranagar
Panchmahal
Ahmedabad
Fabricated metal products
Nadiad Anand
Jamnagar
Steel & Aluminium Furniture
Vadodara Rajkot Porbandar
Electric motors Power driven pumps
Bhavnagar Amreli Junagadh
Bharuch
Textile machinery parts Chemical machinery parts
Surat
Food processing machinery Machine tools
Navsari Dang Valsad
Source: Industries Commissionerate, Govt. of Gujarat 22
Steel re-rolled products Brass parts
Diesel engine & parts Ball & Roller bearings Automobile & auto parts
4. AVAILABILITY OF SKILLED MANPOWER
No. of seats available in engineering colleges in Gujarat during 2010-11
60,000
44,710 39,648 40,000
Self Finance Grant in aid Government
20,000
1,897 Diploma
Bachelors degree
Masters degree
• At the end of academic year 2010-11, state had intake capacity of 44,710, 39,648 and 1,897 seats in Diploma, Bachelor’s degree and Master degree engineering courses respectively
Source: Commissionerate of Technical Education, Gujarat Government 23
5. INTEGRATED INDUSTRIAL INFRASTRUCTURE
Most prominent locations with economic benefits for locating engineering unit
Banaskantha
Sabarkantha
Patan Anjar Mehsana
Kutch
Gandhinagar Surendranagar
Kheda
Sanand Ahmedabad Changodar Nadiad Anand
Navlakhi Jamnagar Okha Rajkot
Dholera
Porbandar
Bhavnagar Amreli Junagadh
Particular Panchmahal Dahod
Surat Navsari
Valsad
24
7
Special investment regions
10
DMIC influence area Bharuch Narmada Hazira
Dang
Source: GIDC
Special economic zones
Symbol
Vadodara
Pipavav Simar
Units
Upcoming modern sector specific clusters planned on PPP mode Engineering Plastics & Plastic Processing at Dahej Auto Components & Light Engineering at Halol Precision & Light Engineering at Sanand
6. PRESENCE ACROSS THE VALUE CHAIN
Engineering sector
Heavy engineering
Heavy electrical
Heavy engineering and machine tools
• Boilers
• Textile machinery
• Turbines and generator sets
• Ceramic machinery
• Transformers
• Sugar machinery
• Switchgear and control gear
• Rubber machinery • Material handling equipment
Light engineering
Automotive
Low technology products
High technology products
• Passenger and utility vehicles
• Roller bearings
• Auto components
• Welding equipment and consumables
• Agricultural machinery
• Casting and forging
• Process control instruments
• Earth moving and construction machinery
• Pipes and tubes
• Domestic appliances
• Fasteners
• Electronics
• Medical and surgical instruments
• Oil field equipment • Metallurgical machinery • Dairy machinery
.•.
Source: Commissionerate of Technical Education, Gujarat Government 25
GUJARAT SCENARIO – 2017
4.1.2 26
GOVERNMENT OF GUJARAT’S DEVELOPMENT AGENDA
Based on defence offsets, stronger engineering sector with value addition will emerge
Gujarat to target 35% of the possible Defence Offsets to be sourced from India
27
INTERVENTIONS PLANNED
4.1.3 28
GOVERNMENT INTERVENTIONS PLANNED TO BOOST THE SECTOR
• 3 precision engineering clusters with stateof-the-art infrastructure will be developed in the first phase in Halol, Sanand and Mandal –Becharaji; • These clusters will be developed by GIDC; • A Centre of Excellence, along with facilities for product testing and validation, will be developed in each of these clusters; • The benefits of existing industrial park scheme will be extended to these clusters; • Units coming in these clusters will be provided single window clearances and streamlined & hassle-free procedures for obtaining various approvals; • The units in these clusters will be networked with the prime educational institutions in the country, so as to enhance technology levels through improved skills and capabilities; • Development of ancillaries around these estates will be encouraged; • Government will identify and provide large tracts of land for specialized trials of equipments
29
INVESTMENT OPPORTUNITIES
4.1.4 Source: GIDC 30
INVESTMENT OPPORTUNITIES
Engineering service outsourcing
Transformers & Boiler manufacturing
Auto components
Defence offset
Material handling equipment
Machine tools
31
OVERVIEW
4.2.1 33
GLOBAL TECHNICAL TEXTILES SCENARIO ASIA WILL CONTINUE TO BE THE MOST IMPORTANT DEMAND CENTRE
Technical Textiles consumption by region • Global Technical Textiles market is estimated around Rs. 6,35,000 crore in 2010 from Rs. 4,64,400 crore in 2000
3% 29%
America Europe Asia Rest of the world
45%
• Technical Textiles account for over 25% of all fibre consumed and almost 50% of the total textile activity in certain industrialized countries • Packtech is the largest sub-sector by market size
23%
• China and India are expected to drive demand in the Asian region
Growth of retail and large construction projects will drive demand in these countries
Source: David Rigby Associates (Note: $ =50 rs is considered for calculation) 34
INDIAN TEXTILES SCENARIO TEXTILE INDUSTRY; A KEY PILLAR OF MANUFACTURING IN INDIA
• India is the 2nd largest textile economy by production in the world after China • The textile industry in India contributes 14% to total industrial production, 17% to export earnings in India and 4% to country’s gross domestic product (GDP) • Textile industry is the 2nd largest employment provider in India after agriculture: providing direct employment to over 35 million people • Currently consumption of Technical Textiles in India forms only 9% of total global consumption
In most industrialized economies, Technical Textiles contribute around 50% of the overall textile market, whereas in India its contribution is just around 20%. Given the huge potential demand and policy support by government, the share of Technical Textiles in India, is expected to rise to a level similar to that of industrialized countries.
Source: Ministry of Textile 35
INDIAN TECHNICAL TEXTILES SCENARIO A HIGHLY POTENT AND RAPIDLY GROWING INDUSTRY
180000
• Indian Technical Textiles market is estimated at Rs. 63,201 crore in 2011-12 and is projected to grow to Rs. 1,58,540 crore by 2016-17
160000
• It is expected to grow at a CAGR of 20% during the next 5 years
80000
• Packtech, Clothtech and Hometech are the largest segments, contributing to around 65% of the overall market • Protech is expected to grow very fast with a CAGR of 23%
140000 120000 100000
0%
GR CA
-2
60000 40000 20000 0 2011-(12) E
2016-17 (P)
Agrotech
Meditech
Mobiltech
Packtech
Sportech
Buildtech
Clothtech
Hometech
Protech
Geotech
Oekotech*
Indutech
There are over 3,000 Technical Textiles manufacturing units in India; 1/3rd of them are located in Gujarat
Overall market C.A.G.R - 20% (P) Packtech: 22%
Clothtech: 20%
Hometech: 20%
Indutech: 18%
Mobiltech: 17%
Sportech: 17%
Buildtech: 17%
Meditech: 20%
Protech: 23%
Agrotech: 20%
Geotech: 22%
Oekotech: 22%
Source: Ministry of Textiles, PwC Analysis (CAGR is calculated for 5 year period – 2011-12(E) to 2016-17 (P)) (E) – estimated, (P) - projected 36
GUJARAT TECHNICAL TEXTILES SCENARIO THE HUB FOR TECHNICAL TEXTILES IN INDIA
• Gujarat Technical Textiles market is estimated around Rs. 6,100 crore in 201112; contributing around 10% to the national Technical Textiles output
Some of the leading organized players in Gujarat
• Currently, 1,000 plus Technical Textiles units are already present in Gujarat, with presence in all the 12 sub-sectors of Technical Textiles • There are more than 200 products classified as Technical Textiles • Technical Textiles units are mainly concentrated in Ahmedabad, Surat, Vadodara and Kutch • Packtech (64%), Hometech (10%), Clothtech (9%) and Indutech (7%) are the four largest contributors; together contributing around 90% of states technical textile production
Source: iNDEXTb, ITTA 37
GEOGRAPHICAL DISTRIBUTION OF EXISTING TECHNICAL TEXTILES UNITS IN GUJARAT
Sub-sector
Units (In %)
Banaskantha 1.7
Buildtech
4.1
Clothtech
47.8
Sabarkantha
Patan Kutch
Agrotech
Mehsana Gandhinagar Surendranagar
Kheda
Panchmahal
Ahmedabad
Nadiad Anand
Jamnagar
Vadodara Rajkot Porbandar
Bhavnagar Amreli
Geotech
1.2
Hometech
8.1
Dahod
Bharuch
Narmada
Surat
Indutech
13.5
Meditech
1.4
Mobiltech
0.7
Packtech
18.5
Protech
1.9
Junagadh Navsari Dang Valsad Oekotech
0.35
Sportech
0.8
Existing
• Te c h n i c a l Te x t i l e s u n i t s a r e predominantly located in Ahmedabad, Surat, Vadodara and Kutch • Around 48% of the units are of Clothtech segment
Source: iNDEXTb 38
KEY ENABLERS OF GROWTH FOR THE INDUSTRY STRONG PRESENCE OF ALL ENABLERS IN GUJARAT
5. Presence of Non-Woven industry
1. Strong domestic demand
4. Availability of required skill sets
2. Industrial infrastructure and transport connectivity
3. High raw material availability
39
TECHNICAL TEXTILE
4.2 32
1. STRONG DOMESTIC DEMAND
3
• Technical Textiles find application/usage in a variety of day-to-day applications as well as industrial applications. The large quantum end users of Technical Textiles are cement industry, horticulture industry, automobile industry, chemical industry, infrastructure etc.
Packtech
7
Hometech
8
Clothtech Indutech
9
Buildtech 10
Others
63
End usage by sub-sectors of Technical textile market in Gujarat (In %) Cement
Horticulture
Automobile
Chemical
Infrastructure
Gujarat is the 5th largest cement producer in India. The sector is expected to grow in line with the growing Infrastructure in the state/country
Not only Gujarat is one of the largest producer of Horticulture, but it is also growing at a great pace. State achieve horticulture production of 173 lakh tons in 2010-11, compared to 59.49 lakh tons in 1998-99; growing with a CAGR of 9.30%
Gujarat is all set to become the next auto hub in India. It is already home to auto manufacturing plants of Tata Motors, Hyundai and General Motors. Maruti, Peugeot and Ford have also signed MoUs for the same
Gujarat is the Chemical hub of India; contributing to more than 50% of the overall Indian Chemical output
The Blueprint for Infrastructure in Gujarat 2020 (BIG 2020); an integrated plan for Infrastructure development envisages an investment of Rs. 11,80,912 crores across 19 infrastructure sectors
Technical textiles are expected to grow in line with the growing end consumer base
Source: iNDEXTb, National Horticulture Board, Gujarat Socio-economic review 2010-11, PwC analysis 40
2. INDUSTRIAL INFRASTRUCTURE AVAILABILITY AND TRANSPORT CONNECTIVITY
Banaskantha
Patan Mehsana
Most prominent locations for locating Technical Textile
Sabarkantha
Kutch
Textile & Apparel SEZ (4)
Gandhinagar Kheda Surendranagar
Panchmahal Dahod
Ahmedabad Nadiad Anand
Jamnagar
Vadodara
Integrated textile parks (7) Product clusters (18)
Rajkot Porbandar
Bhavnagar
Research & testing facility (2)
Bharuch Narmada
Amreli Junagadh
Surat
Educational infrastructure
Navsari
DMIC influence area
Dang Valsad
Source: www.sezindia.nic.in, GIDB, GIDC, IC Office 41
3. HIGH RAW MATERIAL AVAILABILITY
• Gujarat contributes to 62% of the overall petrochemical output of India and thus has facility to produce almost all varieties of man-made fibres Banaskantha
• It is also the largest producer of cotton in India; contributing to more than 30% of the cotton produced in India
Sabarkantha
Patan
Mehsana
Kutch
Gandhinagar Surendranagar
Kheda Panchmahal Dahod Ahmedabad Nadiad Anand Vadodara
Jamnagar Porbandar
Rajkot Bhavnagar Amreli
Junagadh
Bharuch Narmada
Man-made fibres
Surat Navsari Dang
Contribution to technical textiles
Polyester Poly-olefines
Valsad
Acrylic
80%
Polyamide Glass Fibre Natural fibres Cotton
Source: iNDEXTb, Agriculture & Co-operative Dept, Gujarat Govt, PwC analysis 42
19%
4. AVAILABILITY OF REQUIRED SKILLED SETS
Industrial Training Institutes (ITI): These are institutes which provide skilled manpower to the industry
Educational Infrastructure: It offers degree and diploma courses on textile engineering, processing, technology , chemistry, design, manufacturing technology and processing technology.
Centre of Excellence: It focuses on research, new product & technology development, consultancy, training skilled manpower, testing etc
Research & testing facility:
Degree courses
Diploma courses:
ATIRA - Ahmedabad Textile Industry Research Association
L. D. College of Engineering, Ahmedabad
Dr. S & S Gandhy College of Engg. & Tech., Surat
MANTRA - Man-made Textile Research Association
Faculty of Engineering & Technology (MSU), Vadodara Sarvajanik College of Engg & Tech, Surat
Yearly intake of Degree courses as on 2010-11 150
Industrial Training Institutes (ITI’s):
28 ITI’s in Gujarat provide industrial training courses on Textile and
R.C. Technical Institute, Ahmedabad Sir Bhavsinhji Polytechnic Institute, Bhavnagar Govt. Girls Polytechnic, Surat
Yearly intake of Diploma courses as on 2010-11
18
100 50 0
18 33
132
Textile processing technology 25
22
Textile engineering Textile processing Textile technology Textile chemistry Bachelor
Master
120
Textile manufacturing technology
135
Textile design
60 0
20
40
60
80
100 120 140 160
Source: Commissionerate of Technical Education, Education Department, Govt. of Gujarat, iNDEXTb 43
5. PRESENCE OF NON-WOVEN INDUSTRY THE EMERGING CONVERSION CONFLUENCE
• Non woven industry is growing around 8-10% CAGR over the last 5 years • There are above 26 Non Woven fabric manufacturing units in Gujarat; around 50% of the non-woven manufacturing units in India are located in Gujarat • Non-woven technology finds its application in Mobiltech, Meditech, Protech and Geotech • Increasing awareness about hygiene using Non Woven products and its contribution towards green environment are the key success factors for the sector
Consumption of non-woven industry in India is $o.o4/per capita, very low compared to $2.73/per capita in North America; indicating high growth potential of the sector in India
Source: Gujarat Non Woven manufacturer’s association, www.technical-textile.net 44
POLICY INTERVENTIONS
4.2.2 45
FOSTERING GROWTH OF TECHNICAL TEXTILES POLICY SUPPORT BY GOVERNMENT OF INDIA 20%, 15%, 10% credit linked capital subsidy for Power loom, SSI & specified processing machinery respectively and 5% credit linked interest subsidy under TUFS (Technology Upgradation Fund Scheme) scheme on purchase of Technical textile machinery approved by government
The basic custom duty on imported technical textile machinery has been reduced from 10% to 5%
Scheme for Integrated Textile Parks(SITP) : 40% capital subsidy to a maximum of Rs. 40 crore on the total project cost on projects approved by government
Specified technical textile products are covered under focus product scheme/green technology products/hi-tech products of Exim policy and are entitled for duty credit scrip equivalent to 2% of FOB value of exports
100% FDI allowed for Textile sector under the automatic route
Support to create four Centers of Excellence focusing on agro textiles, geotextiles, protective textiles and medical textiles
Support to start-ups; Reputed consultants empanelled by Ministry of Textiles/Office of Textile Commissioner will prepare the project report and do the handholding of the potential entrepreneur till the completion of the project
Source: Technology Mission on Technical Textile, Ministry of Textiles, GOI 46
FOSTERING GROWTH OF TECHNICAL TEXTILES POLICY SUPPORT BY GOVERNMENT OF GUJARAT Credit linked interest subsidy • Credit linked interest subsidy in Technical Textiles of 6% for purchasing new plant & machinery to a maximum of Rs. 125 lakh, in addition to interest subsidy offered by Govt. of India.
Technology acquisition and upgradation • Financial assistance of up to 50% of the investment for technology acquisition / collaboration, with maximum of Rs 25 lakh per process/product once will be provided to the enterprises acquiring new technology.
Apparel training institutions • Assistance of up to 85%, with ceiling of maximum of Rs 3 crore, of the project cost will be provided to any autonomous institutions promoted by government/ public sector undertakings or private sector with a strong background of textile and apparel industries or skilled manpower development, which propose to set up apparel training facilities • Assistance of 50%, subject to a limit of Rs. 20 lakh per center for upgrading training centre to training centers focusing on Textile and apparels
Textile & Apparel Park • Support to Private Developer: Assistance of VGF of up to 20% of the total project cost to private developers intending to develop Textile and Apparel parks • Support to Industries/Industry association: Assistance of 50% of the total project cost, up to a maximum of Rs. 10 crore to a group of Industries or an Industry association who intend to develop a Textile and Apparel Park
Source: Industries and Mines Department, Govt. of Gujarat 47
GUJARAT SCENARIO - 2017
4.2.3 48
GOVERNMENT OF GUJARAT’S DEVELOPMENT AGENDA
• Develop the entire value chain of the Textile Industry • Value addition through focus on Technical Textiles
• Textile market in Gujarat by 2017 ~USD 25 billion • Growth is envisaged to be driven by Technical Textiles which has use in more than 200 different products across sectors • Attract at least 2,000 new units with an investment worth Rs. 10,000 crore by introducing Technical Textile Mission • Technical Textiles of Gujarat will strive to capture 50% of the Indian market
Source: iNDEXTb 49
INTERVENTIONS PLANNED
4.2.4 50
INTERVENTIONS IN TECHNICAL TEXTILES SECTOR
• Technical Textile Mission will focus on development of Composite Centres and up gradation of technology – with an expert group being formed • Expert group will develop strategy for the development of Technical Textiles sector • 2 new Composite Centres for the development of Technical Textiles to be set up in Ahmedabad (existing centre in Ahmedabad to strengthened) and Surat district. (existing GoI scheme for the development of such Composite Centres will be improved) • The existing scheme of Rs. 10 crore being provided to the Centre of Excellence will be increased to Rs. 20 crore for Technical Textiles • 2 new Technical Textile zones to be developed in Ahmedabad and Surat district • Additional 2% interest subsidy will be given for players in Technical Textiles – interest subsidy will be limited to a maximum amount Rs. 2 crore
Source: Industries Commissionerate, iNDEXTb 51
COMPOSITE CENTRE – KEY COMPONENTS WILL HELP IN THE DEVELOPMENT OF ENTIRE VALUE CHAIN
• R & D Centre (Product Development): The R & D centre would have a pilot project for new product development. It would include machines for complete value chain
Spinning Marketing
• Production centre: It would serve 2 purposes:
Weaving
Marketing
Knitting
- To produce the 1st batch of the product developed in the R&D centre - It shall generate revenue for the centre
Composite centre of Textile Industry Garmenting
Processing
• Testing and certification: Help test the produc ts developed and provide certification. It would also provide testing for raw materials • Design studio: Development of new designs
Designing
Finishing Testing
• Branding and Marketing: Help industry participate in National and International Exhibitions and organize conferences, seminars, workshops etc to educate the industry • Skill development: Training manpower with the latest technology
52
INVESTMENT OPPORTUNITIES
4.2.5 53
COMPOSITE CENTRE – KEY COMPONENTS WILL HELP IN THE DEVELOPMENT OF ENTIRE VALUE CHAIN
Agrotech Agro shading net, packing net for agro products
Buildtech
Hometech
Indutech
Hometech High quality upholstery fabric, narrow width fabric for furniture application, wipes for house hold use, fiber foam & wadding, fiberfill products like quit & pillows
Glass fiber battery separator, fusing belts, high mesh filters. Industry felt, woolen felt, fire resistant fabric, slings for bulk handling
Source: iNDEXTb 54
Scaffolding net
Oekotech
Packtech
PP nonwoven liners for land fill sites of MSW
Jumbo bags, FIBC, coated fabric for soft luggage
Clothtech
Geotech
Narrow width fabric as fashion accessories like belt
geotextiles
Meditech Nonwoven disposables like apron, mask, caps, draper etc
Geotech Woven & non-woven
Mobiltech Interior carpets & NVH components
Protech Fire retardant clothes
AUTO
4.3 55
OVERVIEW
4.3.1 56
AUTOMOTIVE INDUSTRY – GLOBAL SCENARIO
The Auto sector has rebounded globally in the year 2010 – 2011 and there is a 26% increase in the vehicle production .
• This level of output is equivalent to a global turnover (gross revenue) of almost USD 2.5 trillion.
90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0
77.9
59.0
60.7
2.80
64.5 6.30
66.5
69.2
3.50
4.10
73.3
70.5
26.00 61.8
5.80
-3.70 -12.40
2002
2003
2004
2005
2006
2007
2008
2009
30 25 20 15 10 5 0 51015-
2010
World Vehicle Production (Units in Million ) Percentage Increase / decrease (-)
Top contributor in the Production for Cars and Commercial Vehicles from 2002-2010 1,059,562 1,124,357 1,147,379
China India
1,856,828
Brazil Iran
% Growth
In Million units
Global Vehicle Production (in Million units )
• A bulk of this increase in Asia-Pacific region have come from China where production has increased from 3.3 million units in 2002 to 18 million units in 2010. 15 million units of vehicles have been produced between 2002 – 2010 . • The second contributor to the growth is India where the production has increased nearly four times higher from 0.9 million units in 2002 to 3.5 million units in 2010. 2.6 million units has been produced during this period. • North America, Western Europe and Japan are the mature Automotive market . • Emerging Auto market are BRIC Nations .
South Korea
2,641,987 14,977,863
Thailand
Source : OICA Statistics 57
AUTOMOBILE INDUSTRY MARKET OVERVIEW (1/3) THE INDIAN AUTOMOTIVE MANUFACTURING INDUSTRY HAS REMAINED STRONG IN RECENT YEARS DESPITE MANY OTHER MARKETS AROUND THE WORLD EXPERIENCING A SLUMP IN THE FACE OF GLOBAL RECESSION
50 45 40 35 30 25 20 15 10 5 0
28.8
32.3
35.4
37.4
45.3
0.25
20%
0.2 0.15
12% 0.1
10% 6%
0.05
0 0 2006
2007
2008
2009
2010
Total Automobile Production in India (in Million units ) 20.0 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0
17.9 14.1 11.1
10.9
11.2
FDI inflows into the automotives sector over Apr 2000 – Aug 2010 was USD 4.7 billion (4.5 per cent of total FDI)
India accounts for 9% of the Asia-Pacific automotive manufacturing industry value
Cars is the largest segment of the automotive manufacturing industry in India, accounting for 50% of the industry's total value
India is the second largest producer or two wheelers and 4th largest producer in commercial vehicles
Expected to be the world 7th largest automobile market in 2016 and world 3rd largest by 2030 ,only behind the China and the US
10.0
-2.1
2.9
2007
2008
0.0 5.0-
Source: SIAM, Datamonitor 58
The Indian automotive manufacturing industry reached a volume of 18 million units in the year 2010
20.0
5.0
2006
In 2015, the Indian automotive manufacturing industry is forecast to have a value of $66 billion, an increase of 46% since 2010
15.0
25.8
13.8
30.0 25.0
27.5
The Indian automotive manufacturing industry grew by 20% in 2010 to reach a value of $45 billion %Growth
$ billion
India automotive manufacturing industry value: $ billion, 2006-10
2009
2010
AUTOMOBILE INDUSTRY MARKET OVERVIEW (2/3) DOMESTIC SALES OF AUTOMOBILES HAVE BEEN GROWING AT A HEALTHY PACE
26.44
26.17
9.37
25 20
7.44
8.00
7.25
7.87
10.00
15 10
6.00
0 0.68 0.53
1.95 0.50 0.44
1.55 0.38 0.35
2.52
5
0.72
0.49 0.36
2.00
1.55
-4.64
4.00 1.38 0.47 0.40
In Million units
12.00
30
% Growth
14.00
11.79
Automobile Domestic Sales in India (in Million units )
Market Share by Volume in Fy 2010-2011
-
5 10-
0.00 2006 Passenger Vehicles Two Wheelers
2007
2008 Commercial Vehicles % Growth
2009
16%
2010 Three Wheelers
4% 4%
Passenger Vehicles Commercial Vehicles Three Wheelers
76% Two Wheelers
• Industry has sold around 15 million vehicle units at a growth rate of 26%in the year 2010 – 2011 • Sale of automobiles in India has grown at a CAGR of 11.25% over the last 5 years from 2006 – 2010 • Sales of passenger vehicles is the fast growing segment with CAGR of 16% over the same period
Source: Ministry of Heavy Industries & SIAM 59
AUTOMOTIVE MARKET OVERVIEW (3/3) EXPORTS HAVE GROWN STRONGLY – INDIA BEING CONSIDERED AS HUB FOR SMALL CARS
• The volume of exports from the sector have increased at a CAGR of 24% during the period 2006 – 2010.
0.00
2006 Passenger Vehicles Two Wheelers
2007
2009 2008 Commercial Vehicles
2010 Three Wheelers
Growth Rate
35 30 25 20 15 10 5 0
% Growth
4.53
0.76
11.40
17.89
4.46 0.45 1.73
10.04
2.36 0.43 1.48
8.20 2.18 0.59 1.41
6.20
10.00
1.98 0.50 1.48
in Million units
15.00
5.00
23.60
22.42
2.70
29.64
20.00
15.40
Automobile Exports in India (Million units )
• Exports have reached 2.3 million vehicle units in the year 2010. • Two wheeler segment is the fast growing segment at a CAGR rate of 25% over the same period.
Table : Market Leaders in different segments Segments
Market Leader
Others
Passenger Vehicles 45%
16%
15%
7%
63%
23%
7%
59%
30%
4%
41%
40%
10%
59%
24%
7%
6%
51%
21%
14%
10%
MCV’s and HCV’s
LCV’s 4%
Three Wheelers Motor Cycles Scooters
Source :SIAM 60
AUTO COMPONENT INDUSTRY MARKET OVERVIEW (1/2) INDIAN AUTO COMPONENT INDUSTRY IS EMERGING AS ONE OF THE FASTEST GROWING MANUFACTURING SECTOR • The Indian auto component industry recorded its highest year-on-year (y-o-y) growth of 34% in 2010-11.
• India is estimated to have the potential to become one of the top five auto component economies by 2025. • The automotive component industry caters to three broad categories of the market, - Original equipment manufacturers (OEM) or vehicle manufac turers comprise 25 percent total demand - Replacement market that comprises 65 percent of the total demand - Export market that comprises primarily of international tier-I suppliers and constitutes 10 percent of total demand
USD in billion
• Total revenues of US$ 40 billion; major contribution coming from exports at US$ 5 billion and fresh investment from the US at around US$ 2 billion.
Turnover of Auto Component Industry
CAGR 2007 – 11: 14.6% CAGR 2011 – 21: 11%*
120 100 80 60 40 20 0
26.5
2007-2008
23.0 2008-2009
Financial Figures for the years
30.1
2009-2010
113* 66.3*
39.9
2010-2011 2015-2016
2020-2021
* Estimates
Automative component Market share in India Electrical component 9%
Others 7%
Engine parts 31%
Equipment 10% Suspension and braking components 12% Body and chasis 12%
Drive transmission and steering components 19%
Source :ACMA 61
AUTO COMPONENT INDUSTRY MARKET OVERVIEW (2/2) INDIA EXPORTS MAINLY ENGINE & TRANSMISSION PRODUCTS AND IS PERCEIVED TO BE VERY COMPETITIVE
35 30 25
Auto Component Industry Investments (in USD billion)
20 15 10 5
12.3 3.8
4.0
3.4
*
5.2
0
2
1.7
1.5 1
0.66
0.5
0.1
0 2007 - 2008 2008 -2009 2009 -2010 2010 -2011 2015 -2016 2020 -2021
Financial Figures for the years
36%
28%
Asia North America South America Australia
7% 1% 5%
Source :ACMA
23%
2007-2008
2008-2009
2009-2010
2010-2011
* Estimates
Export Destinations
62
2.3
2.5
29*
CAGR 2007 -2011: 11% CAGR 2011-2021: 18.8%
USD in Billion
USD in Billion
Turn over of Exports of Auto components from India (in USD billion)
Africa Europe
• In 2010-11, automotive component exports from India were worth USD 5 billion and are expected to reach USD 12 billion in 2016. • Among the major export destinations for Indian auto components, Europe leads the way with 36% share, followed by Asia (28%) and North America (23%). • 80% of exports account for original equipment manufacturers and 20% account for after market.
GROWTH DRIVERS FOR AUTOMOTIVE SECTOR IN INDIA
• Demand for Indian Automobiles and auto components is increasing globally • Av a i l a b i l i t y o f l o w - c o s t s k i l l e d manpower is widespread
Cost competitiveness
Growth in the road sector
• Focus on R&D and product development is increasing Increasing Consumer demand
• Disposable income in rural areas is increasing
Growth Drivers An Enabling regulatory environment
• Entry of global players in the market offers a large number of products in various segments Easy Financing Schemes
New Product Launches
• Working population is growing and hence, per capita income is increasing
• Product lifecycles are reducing, and players are employing quick product launches • Most Indian auto players are focusing on small car segment • Interest on loans have declined and access to credit has increased
Source :ACMA 63
KEY SUCCESS FACTORS FOR AUTO INDUSTRY IN GUJARAT
Increasing Investment
Presence across value chain
Robust Infrastructure Facilities
Source :ACMA 64
Growing Urbanization
Strong Manufacturing base
Presence of Strong Auto Ancillaries
GROWING URBANIZATION RAPIDLY INCREASING URBANIZATION IN THE STATE IMPLIES POSITIVE SIGNS FOR AUTO MANUFACTURERS
• 43% of the population lives in urban areas. • One of the top three states in India with highest number of Motor Vehicles registered .
State Wise comparison of Registered Motor Vehicles as on 31.03.2009
Number of Motor Vehicles Registered on road in Gujarat (in Numbers)
Maharastra 14% 14000000
Other states 54%
12266575 11872573 12000000 10998651 10289056 10000000 9497337
Tamil Nadu 12% Gujarat 10%
Source : Ministry of Road Transport and Highways
Goods Vehicles (Truck to Tempo)
8000000
Public/Private Buses
6000000
Motor Cars /Jeeps / Taxis Auto Rickshaws
4000000
Motor Cylcles /Scooters/Mopeds
2000000
Uttar Pradesh 10%
Others (tractor, trailor,trucker and others)
0
Classof Vehicles
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2010-2011- up to August
Source : Ministry of Road Transport and Highways
CAGR of Registered vehicles for Gujarat from 2001- 2009 is 8.9%
65
STRONG MANUFACTURING BASE CONTRIBUTION OF MANUFACTURING SECTOR TO GSDP IN GUJARAT – 26.4% (2009-10)
Manufacturing Sector Contribution Thailand
Investments in manufacturing sector (Rs. crore) 40% 400,000
34%
China 28%
Poland malaysia
26%
Turkey
26%
Hungary
26%
South Korea
18%
Argentina
18%
Japan
18%
Germany
200,000 100,000 2004-05
16%
Egypt
16%
2005-06
3%
16%
India
16%
26%
5%
27% 0%
10%
20%
Chemicals
Machinery and Equipments
30%
6% 5%
40%
Source :Source Economic Review of Gujarat , 2010 - 2011 66
2009-10
Pharmaceuticals
5%
Gujarat
2008-09
Petroleum
17%
5%
Russia
2006-07 2007-08
Manufacturing Sector break up in Gujarat
17%
Brazil
CAGR -23%
300,000
50%
21% 7%
Fabricated metals Products, except machinery and equipments Textiles
AUTO ANCILLARIES IN GUJARAT Sound base : 30 clusters comprising castings & machine tools, brass parts, oil engines & electric motors, submersible pumps, industrial valves & bearings, auto-ancillaries
In Gujarat, Auto and auto ancillary industry covers, • Assembling and manufacturing automobiles • Manufacture of auto components for all types of vehicles • CNG kits for automobiles
Sanand
Rajkot Halol
• Industrial automotive bearings • Automobile gears • Automobile design centre • Engineering design for aerospace industries • Auto ancillary SEZ/Park
Cluster development approach and strengthening emerging clusters will add to the strength of the state in attracting further industrial investments
Source :Government of Gujarat 67
GUJARAT: EMERGING AUTO HUB LEVERAGING ITS STRENGTHS THROUGH SOUND ECONOMIC POLICIES AND COMPETENT MANAGEMENT BY THE STATE GOVERNMENT
Delhi Mumbai Industrial Corridor Area Planning map
• Low transaction cost for accessing market in the western and northern India.
Dadri
• Good rail connectivity – to improve significantly with dedicated freight corridors to Dahej and Nhava Sheva passing through large parts of the state . • The Delhi-Mumbai Dedicated Freight Corridor project will provide excellent rail connectivity for the auto sector in Sanand and for other industries. • Gujarat ’s por t development initiatives are closely coordinated with rail transport.
Mahesana
`
Ahmedabad Rajkot
Vadodara Surat
Diu Daman
J.N.Port End Terminals DFC Alignment
Source : DMIC 68
Cities/ Urban Agglomerations
SANAND INDUSTRIAL ESTATE SANAND AS ONE OF THE PREFERRED LOCATION AMONG AUTO AND AUTO COMPONENT MANUFACTURERS IN GUJARAT Projects Existing and Proposed investment in Sanand Name of Industry
No .of. units
Investment (in USD Billion)
Area
1,500 hectares
Auto
3
2.22
Focus Sectors
Chemicals
2
0.0071
Textiles
4
0.0069
Pharma
1
0.0068
Automobiles and Ancillary units, Engineering , Engineering plastics, Semiconductors, Electronics etc.
Electrical
2
0.0235
Cement
1
0.0611
Engineering
1
0.0146
Total Investment
2.404
Connectivity element
Location
Distance/ Connectivity
Airport
Ahmedabad
30 km/SH
Nearest port
Kandla/Mundra
300-400 Km
Nearest City
Ahmedabad
30 kms/SH
NH/State Highway
NH 8A/ SH
20 kms/ On 4 lane SH
Nearest Railway junction
Ahmedabad
30 Kms/ State Highway
Nearest railway line
ViramgamSanand line
< 5 km
Major Auto and Auto Component players in Sanand
Source: GIDC, Govt of Gujarat 69
GUJARAT : PRESENCE ACROSS VALUE CHAIN
Steel
Forging
Casting
Fabrication
Machinery production
Automobile manufacturing
Engineering ancillaries
Foundry & Forgings Steel re-rolled products Brass parts Fabricated metal products Steel & Aluminium Furniture Electric motors Power driven pumps Textile machinery parts Chemical machinery parts Food processing machinery Machine tools Diesel engine & parts Ball & Roller bearings Automobile & auto parts
70
AUTO SECTOR – INVESTMENT SPREAD IN GUJARAT
General Motors India Pvt. Ltd has invested Rs2,000 crore in its plant at Halol in Vadodara and is in the process of investing around $250 million (around Rs1,100 crore) more
Tata Motors Ltd has invested Rs2,900 crore for its Nano plant in Sanand
Bombardier Transportation India Ltd. has invested Rs207 crore to set up its wagon manufacturing plant at Savli in Vadodara district
Apollo Tyres Ltd has invested Rs2,000 crore to set up tyre manufacturing facilities in Limda in Vadodara district
Asia MotorWorks Ltd, manufacturer of heavy commercial trucks has invested Rs1,400 crore to set up its factory at Bhuj with an annual capacity of 50,000 vehicles
CEAT Ltd, the flagship company of RPG Enterprises Ltd setting up a tyre making facility in Halol with an estimated investment of Rs1,500 crore
Atul Auto Ltd, a Rajkot based three-wheeler company has invested Rs63 crore for setting up a 24,000 per annum capacity in Shapar near Rajkot
Electrotherm (India) Ltd has set up a electric two-wheeler manufacturing facility in Ahmedabad with a installed capacity of 250,000 unit-per annum.
Source: GIDC, Govt of Gujarat 71
POSITIVE DEVELOPMENTS IN GUJARAT AFTER NANO PROJECT In 2011 Ford made a commitment to invest USD 0.88 billion in the State and start state of the art manufacturing plant which will have a planned capacity of 0.4 million vehicles per year .
In 2011, Maruti-Suzuki made an announcement to invest USD 2.6 billion to develop its manufacturing plant in Gujarat. Also, another USD 1.33 billion will be invested to develop ancillary units in Gujarat.
Bajaj Auto Ltd are planning to explore the option of setting up a two-wheeler manufacturing facility at Kutch. The factory, with an annual production capacity of around five million units, will require an investment of USD 0.22 billion. Hindustan Aeronautics Ltd is in talks with the state for setting up a USD 0.88 billion project for design, development, manufacture, repair and overhaul of aircraft, aero engines and helicopters
72
GUJARAT SCENARIO – 2020
4.3.2 73
GUJARAT SCENARIO - 2020
Anjar
By 2020, Gujarat aims to
Sanand Viramgam Changodar
Navlakhi
achieve 10% of Engineering
Savli
output from Auto and auto
Rajkot Okha
Dholera
components from
Halol
current level of 3.7%
Simar
Particular The upcoming Special Investment Regions (SIR) will
Existing auto clusters
act as global investment destinations, supported
Emerging auto clusters in SIRs by 2015
by modern infrastructure, premium civic amenities,
Emerging auto clusters in SIRs by 2020
centers of excellence and proactive policy framework
74
DMIC influence area
Symbol
GUJARAT SCENARIO – 2020
4.3.3 75
POLICY INITIATIVES AND INTERVENTIONS PLANNED
The National Strategy for Manufacturing, drawn by the National Manufacturing Competitiveness Council (NMCC), has identified “automobiles sector” as a priority area. The Government of India has taken a number of initiatives to promote growth in the sector. Auto Policy 2002 • The policy emphasizes on low emission fuel auto technologies and the availability of appropriate auto fuels. • The policy’s objective is to establish India as an international hub for manufacturing small, affordable passenger cars and a key global centre for manufacturing tractors and two-wheelers. • The policy provides for the automatic approval for foreign equity investment of up to 100 per cent for the manufacture of auto components. Automotive Mission Plan 2016 The AMP targets exports worth US$ 40–45 billion in 2016, including component exports worth US$ 20–25 billion and outsourced engineering services worth US$ 2–2.5 billion. The AMP targets a total turnover of US$ 145 billion by 2016.
Interventions Planned : Auto clusters will be promoted in Rajkot, Halol, Sanand and Mandal
Source: Ministry of Heavy Industries 76
INVESTMENT OPPORTUNITIES
4.3.4 77
INVESTMENT OPPORTUNITIES
• Government policies, including a weighted tax deduction of up to 200% for in-house R&D activities in the country, have given impetus to investment in R&D. • India’s vast availability of low-cost skilled and educated manpower, proven product-development capabilities, and geographic advantage due to its proximity to emerging markets present significant growth opportunities in the country. • The number of global players moving to India has been increasing on the back of Government of India permitting 100% foreign equity investments. • Light vehicle sales in India are estimated to cross the 3 million mark by 2012. • The Automobile Mission Plan envisages industry to grow 5-fold to US$145 billion by 2016 • The auto component industry in India has potential to grow at a CAGR of 13% to reach US$40 billion by 2015
Source: Ministry of Heavy Industries, SIAM & ACMA 78
CHEMICALS AND PETROCHEMICALS
4.4 79
OVERVIEW
4.4.1 80
GLOBAL PERSPECTIVE Linkage with demand from emerging regions
Sector growth recorded at 11% in 2010, as against a negative growth of 7% in 2009
USD 2.4 trillion industry in 2010
Commodity Plastics 12%
Europe 25% Americas 28%
Manufacturing base shifting to Asia on account of lower cost and presence of end use markets
Middle East, Africa 3%
Specialty Chemicals 24%
Bulk Chemicals 13% Consumer Chemicals 15%
Asia-Pacifica 47%
Petrochemicals 26% Asia-Pacific accounts for 46% of the total consumption
Petrochemicals and specialty chemicals account for 50% of the market
3,000 2,500 2,000 1,500 1,000 500 0 Market Value Growth Global GDP Growth
Others 10%
2006
2007
2008
2009
2010
1987
2181 10% 5%
2342 7.00% 3.00%
2173 -7% -0.50%
2413 11% 5%
Industry grew at a CAGR of 5% from 2006-2010
12% 10% 8% 6% 4% 2% 0% - 2% - 4% - 6% -8%
12% 10% 8% 6% 4% 2% 0% World
Europe
USA
Asia
Latin America
Asia registered the highest production growth
Source: Industries, SIAM & ACMA 81
ASIA PACIFIC EMERGING AS A KEY MANUFACTURING CENTRE Chemical Sales by Country: Top 10 – USD billion
Region-wise sales - 2010
800
Europe 24%
700 600
Americas 25%
500 400
RoW 2%
300 200 100 0 2010 2009
China
USA
748 541
514 451
Japan Germany 199 156
France
Brazil
99 88
98 73
184 148
Imports
South Korea 97 72
India
Italy
Taiwan
73 51
65 57
64 56
RoW 58%
China 11%
China to remain a key importer in the medium term, attributed to strong domestic demand
82
China 6%
United Kingdom 4% Germany
USA 8%
10%
Total trade in 2010 – USD 1.2 trillion
Source:UN Comtrade
Exports
Region-wise Trade Pattern
RoW 62%
United Kingdom Germany France Japan 4% 7% 5% 3%
Asia-Pacific 49%
USA 11% France 5%
Japan 6%
KEY GROWTH DRIVERS - GLOBALLY
Demand growth in Asia
Petrochemical supply in Middle East
Commoditization in specialty chemicals
• Anticipated growth in domestic demand as well as lower manufacturing cost favouring exports to trigger massive capacity growth
• Economies of scale on account of lower feedstock rates • Proximity to Asian markets
• Increased competition affecting gross margins (except a few niche segments
Technology and innovation
• Development of superior, cost effective technologies
Feedstock costs
Environment
• Mitigating volatility through tie up with companies having feedstock advantage • Alternate feedstock
• Development of green technology and environment friendly products
Chemical industry contribution to industrial sectors
Critical success factors
Automobile Greater customer orientation
Clothing Agricultural production
Economies of scale
Semiconductors Strong supply chain management
Shoes, snickers and other footwear Compact discs and tapes
Strong Environmental focus
Manufacture of plastic bottles Household fabrics and floor coverings 0%
20%
40%
60%
80%
R&D and Product Innovation Value addition through Solutions
100%
Material inputs to many industrial sectors
83
GLOBAL CHEMICAL INDUSTRY IN 2020
5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Industry Growth-USD billion
Segment
CAGR 2010-15
CAGR – 2015-20
Specialty Chemicals
5%
5%
Petrochemicals
7%
7%
Commodity Chemicals
8%
7%
2010
2015
2020
Polymers
6%
6%
2413
3260
4362
Others
5%
5%
Source: Industry Reports
• Future growth of chemical industry linked with demand in Asia, Middle East and Latin America • Petrochemicals and commodity chemicals are the promising sectors. Specialty chemicals segment supported by some companies having multiple business models across various markets • Europe, North America likely to report modest growth (~2%), lower than anticipated global GDP growth • China to emerge as the largest chemical region in the world by 2020 • India and other Asian countries also indicating promising potential
84
INDIA PERSPECTIVE • Indian Chemical Industry valued at USD 60 billion in 2010-11, with petrochemicals and specialty chemicals accounting for over 50%
Indian Chemical Industry – USD 60 billion 3% 25%
• Sector contributes 5% to country’s national output • Although industry is primarily driven by consumption in domestic markets, the industry also accounts for 12% of total exports
27%
45%
• Manufacturing more than 70,000 products Petrochemicals
• Lower levels of per-capita consumption indicating significant growth potential
Agrochemicals
Specialty chemicals
Other
Export performance – Chemicals and related products – USD billion
Per capita consumption - India and World (kg) 50
2.5
40
2.0
30
1.5
20
1.0
10
0.5
0
0.0
PVC
India
Soda Ash
Polyester Other polymer
HVC
World
Exports
2006-07
2007-08
2008-09
2009-10
2010-11
1.20
1.63
1.61
2.04
2.30
HVC – Olefins, Aromatics, pyrolysis gas, acetylene, hydrogen
Source: Department of Chemicals and Petrochemicals, GoI Department of Commerce, GoI
85
KEY STRENGTHS AND GROWTH DRIVERS Low cost manufacturing • Manufacturing cost is lower in India than most developed economies, which also offers export opportunities
Most chemical items fall under the RBI automatic approval route for FDI investment up to 100%
Provision of requisite infrastructure through SEZs / planned PCPIR
Skilled English speaking working force
Procedures relating to investments are simplified to encourage FDI
Increasing government support to PSUs and autonomous bodies
Increasing industry focus on quality and specialized application areas
Domestic Market • End use market segments including packaging, construction, electronics, automobile, textiles expected to grow above 10%
Growing disposable income and growth in working age population • By 2015, over 65 million households expected to have an annual income of about USD 7,000 • Estimates indicating highest working age population in India by 2030
R&D Strength • Potential to evolve as an innovation oriented with network of 200 national laboratories and 1,300 Research and Development centers
Domestic Chemical Industry anticipated to grow at a rate of 10-12% till 2020
86
INDIAN CHEMICAL INDUSTRY IN 2020
Segment-wise anticipated growth - USD billion
180 160 140 Other
120
Agrochemicals
100
Specialty chemicals
80
Petrochemicals 60 40 20 0 2010-11
2019-20
• Chemicals industry anticipated to grow to USD 154 billion in 2019-20 • Future growth potential – Petrochemicals (12%) and specialty chemicals (15%)
Source: Department of Chemicals & Petrochemicals, GoI 87
GUJARAT: THE HUB FOR CHEMICAL INDUSTRY Gujarat’s share in India – Value of output Annual Survey of Industries 2009-10 28.83%
Others 16.07%
Textiles
• Hub of chemical industry in India, contributes to more than 62 % of national petrochemicals and 51% of national chemical sector output • Around 6,600 chemical and petrochemicals products are produced in the state
Other non-metallic mineral products Machinery and equipment Pharmaceutical, medicinal chemical Chemical and Chemical Products Coke, refined petroleum
• More than 35% of large and medium units in the state
14.12% 12.73% 13.04% 34.05% 42.22% 0%
20%
40%
60%
• Provides 16% of employment in the state • Leads all states in India in terms of investments committed in chemical and petrochemical sector • Large quantity of production of basic chemicals caustic soda, caustic potash and chloromethane • Largest supplier of bio fertilizers, seeds, urea and other fertilizers
Gujarat’s contribution to national output
Methanol LAB Caustic Soda Ethylene Acetic Acid Polymers Soda Ash 0%
Source: GCA 88
20%
40%
60%
80%
100%
SOME OF THE LARGEST CHEMICAL AND PETROCHEMICAL COMPLEXES OF THE WORLD EXIST IN GUJARAT
Refineries (87MTPA)
IOC
Chemical and LNG terminal (15MTPA) LNG terminal Dahej
Petrochemical complexes
IPCL (RIL)
Chlor Alkali plants (1MMTPA)
GACL
IPCL (RIL)
Soda Ash plants (3 MMTPA)
Chemical Fertilizer plants
Tata Chemicals
IFFC
Gujarat Heavy Chemicals
Container handling
GSFC
Pipavav
GNFC
Mundra
UPL RIL
LNG Hazira
RIL
Nirma Shriram
Atul Products
Essar
Chemical port terminal Dahej
ONGC
Indian Rayon
Saurashtra Chemicals
Dhrangadhra Chemicals
KRIBHCO
89
FOREIGN INVESTMENTS AND TECHNOLOGY TRANSFER AGREEMENTS IN THE CHEMICAL SECTOR *Foreign Technology Agreements in Gujarat during 1991 to 2011 8%
1%
Engineering
2% Chemicals & Petrochemicals
• Chemicals and Petrochemicals sector has attracted FDI worth Rs. 16,876 crore during 1991 to 2011; contributing 46% of the overall FDI attracted by Gujarat during the same period
Pharmaceutical
31%
Textile Glass Ceramics 59%
*FDI in Gujarat during 1991 to 2011
Others
22% Engineering 46%
Textile Chemical & Petrochemical 17%
Infrastructure Others
3%
12%
• Chemicals and Petrochemicals sector contributes about 31% of the total foreign technology transfer agreements commissioned/under implementation in terms of investments
Source: iNDEXTb, *Note: The data is for projects/agreements which are already commissioned or are under implementation during the period 1/1/1991 to 31/10/2011 90
GUJARAT: PETROLEUM, CHEMICAL & PETROCHEMICAL INVESTMENT REGION (PCPIR) PCPIR is a specifically delineated investment region planned for the establishment of manufacturing facilities for domestic and export led production of petroleum, chemicals and petrochemicals
• Spread over 453 sq km of brown-field area in the coastal belt of Gulf of Khambhat in Bharuch District • Vicinity of other existing GIDC chemical estates, viz. Jhagadia, Ankleshwar, Panoli and onsite chemical port terminal & LNG terminal at Dahej • ONGC Petro Additions Ltd (OPaL), a join venture promoted by Oil and Natural Gas Corporation Ltd. (ONGC) and Gujarat State Petroleum Corporation (GSPC) to act as anchor tenant • Th e p ro p o s e d S E Z i n P C P I R i n c l u d e s, petrochemical and downstream petrochemical industries, synthetic organic chemicals, industrial
Firms already present
gas producing industry, packaging industry,
• Indian Petrochemicals Corporation Limited (IPCL)
shipbuilding/fabricating unit and other small
•
Petronet LNG
chemical industries
•
Gujarat Chemical Port Terminal Company Limited (GCPTL)
91
PCPIR ADVANTAGE
Export promotion measures Chemical port terminal and chemical storage facility at Dahej
Location advantage With a capacity of 22MMTPA, Dahej port is present in the region The anchorage is at a distance of 5 km from the old port and 6 km from a container terminal in Jageshwar, Bharuch
92
Well established infrastructure Proposed SEZ by GIDC at Dahej & Jhagadia Proposed SEZ in private Sector by Jubilant Quality work force Peaceful Labor. Least man days lost
Regulatory Framework Gujarat SEZ Act Liberal SEZ policy Gujarat Infrastructure Development Act Notified Area Authority under GID Act. Area Development Authority under Town Planning Act
Availability of natural resources Concentration of Petroleum, Chemical and Petrochemical estates across the district Rich natural resources and feedstock availability
Road and rail
Airport connectivity
Support infrastructure
National Highway 8 passes through the district, connecting it with Ahmedabad (182 km) and Mumbai (362 km), along with the DMIC
The nearest airport is present in Vadodara which is 100 km away from the region. Ahmedabad International Airport is 200 km
Offers future expansion possibilities to augment the capacity to 30MTPA for catering LNG, DryBulk and Liquid Chemicals
GUJARAT: A LEADER IN ENVIRONMENT PROTECTION
The Government of Gujarat constituted Gujarat Pollution Control Board with a view to protect the environment, prevent and control pollution of air and water in the State.
Quality of water supplied being assessed through various projects GEMS Project: The global environmental monitoring system project is undertaking an assessment of the quality of water of the major rivers of the state, Narmada, Tapi MINARS Project: Industrial discharges are degrading the quality of river Water, through MINARS project water quality is checked at various stations
• 28 CETP ( common effluent treatment plants) operational in state • 8 C o m m o n H a z a r d o u s Wa s t e Treatment, Storage and Disposal Facilities in operation • 21 hospitals have own (BMW ) incinerators • 13 Common bio medical waste management facility
Ahmedabad Vadodara Rajkot Bharuch Surat Navsari Valsad
Source: GPCB 93
INVESTMENT SCENARIO
Value of MoUs signed during Vibrant Gujarat Summits (USD billion)
• 5th Vibrant Gujarat Summit was held on 12-13 Jan,2011
500
• Total 7,936 MoUs worth Rs.20.8 lakh crore were signed during the Summit
400
• 83 MoUs were signed in Vibrant Gujarat 2011 Summit for projects to be established in the chemicals & petrochemicals sector • Proposed investments – Rs. 56,218 crore
450
350 300 250 200 150 100 50 0 2003
Source: www.vibrantgujarat.com 94
2005
2007
2009
2011
LEADING COMPANIES IN GUJARAT
95
POLICY INTERVENTIONS
4.4.2 96
GUJARAT: INDUSTRIAL POLICY
Gujarat aspires to become a beacon of comprehensive social and economic development.
Industrial Policy 2009
Incentives Thrust Sectors
Various Sector
Manufacturing
specific
Services
Subsidy on
Infrastructure
electricity
Regional Focus
duty Up gradation
FDI/NRI
of industrial estates
HR/Labour
Business
Labour law
Environment
flexibility
Single window
Infrastructure
Industry-academia
clearance
Support for
collaboration
Marketing support
Urban
support for
Grievance
Physical
development
redressal
Industrial
of specialized
Information
institutes
centers
97
GUJARAT: INDUSTRIAL POLICY
• Any small scale unit set up with its own investment can avail 10% limited to maximum Rs. 10 lakh of the eligible fixed capital investment under interest subsidy or investment subsidy scheme – 2000 • For modernization program one can avail of 5% subsidy on the applicable interest over the loan period
Interest Subsidy on eligible parameters
Venture Capital & Patent Assistance
Quality Certification & Skill Enhancement
Technology Acquisition Fund
Support to R&D Institutions
Market Development Support
Support for Vendor Development
Support to auxiliary industries for value addition
Cluster Development in PPP mode
98
Rehabilitation of Sick Units
Promotion of specific sectors
GUJARAT: INDUSTRIAL POLICY Licensing Policy • In Chemical Sector, 100% FDI is permissible. Manufacture of most chemical products inter-alia covering organic / inorganic, dyestuffs & Pesticides is de-licensed • The entrepreneurs need to submit only IEM with the Department of Industrial Policy & Promotion. • Hazardous products come under compulsory licensing policy Custom Duty Customs Duty on most Organic, Inorganic Chemicals, Pharmaceuticals, Fertilizers and other miscellaneous chemicals is 35% Excise Duty On almost all chemicals the excise duty is 16% VAT Duty VAT on 54 chemicals reduced to 5% in Gujarat SEZ incentives • Income Tax Incentives • Corporate tax holiday on export profit – 100% for initial 5 years and 50% for the next 5 years thereafter and 50% of the ploughed back export profit for next 5 years • External commercial borrowing by SEZ units upto US $ 500 million in a year without any maturity restriction through recognized banking channels • Single window clearance for Central and State level approvals • Exemption from State sales tax and other levies as extended by the respective State Governments
99
GUJARAT: INDUSTRIAL POLICY For Developers of SEZs • Income Tax Incentives • 100% tax holiday for a period of any 10 consecutive years out of 15 years beginning from the year in which the SEZ is notified • Exempt from dividend distribution tax • Other Benefits • Full freedom in allocation of developed plots to approved SEZ units on purely commercial basis
Common Incentives • Indirect Tax Incentives • Nil customs duty • Nil excise duty • Exemption from central sales tax • Exemption from service tax
100
GUJARAT SCENARIO – YEAR 2017
4.4.3 101
GOVERNMENT OF GUJARAT’S DEVELOPMENT AGENDA
Development Agenda: • Development of this sector will lead to value addition • Development of linkages with user sectors and increasing product portfolio – meet the needs of other sector (Textiles and Auto industry are key industrial users that need the development of specialty and fine chemicals for their growth) • Identify competitive advantages existing within the State – Gujarat is one of the largest producers of castor and guar seeds in India. Potential of application of these crops in specialty and fine chemicals is immense
Chemical industry in Gujarat has the potential to reach ~USD 70 billion in 2017 Contribution of Specialty and Fine Chemicals will be doubled by 2017
102
PROPOSED INTERVENTIONS
New chemical zones for Specialty and Fine Chemicals
Infrastructure management
Efficiency – energy and water
Promoting R & D and Centre of Excellence
• 3 speciality chemical zones to be developed in Jambusar, Padra and Dahej
• Facilitate provisioning of modern infrastructure
• Centralized waste evaluation and management institution . Ex. Shanghai model • Shift philosophy from end of pipe line to self treatment eliminating reliance on CETPs • Industry-academia-government collaboration – to set standards and for enforcement
• Centres of excellence for specialty and fine chemicals will be set up at Ankleshwar & Dahej
103
PHARMACEUTICALS & BIOTECHNOLOGY
4.5 104
OVERVIEW
4.5.1 105
GLOBAL PERSPECTIVE - PHARMACEUTICALS A USD 856 billion industry in 2010, registering a CAGR of 7% over the last six years
Region-wise Market - 2010
10%
700 600
15%
8%
500
6%
400 300
4%
200
2% 2005
2006
2007
2008
2009
2010
Market Size
605
651
720
788
819
856
Growth
8%
8%
11%
9%
4%
5%
Source: IMS Health
Growth
Market Size
800
100 0
29%
12%
900
11%
39% 6%
0%
North America Asia/Africa/Australia Latin America
Europe Japan
Source: IMS Health
• Market growth primarily attributed to increasing incidence of lifestyle related diseases in global population • North America remains the largest pharmaceutical market with 39% share, followed by Europe and Asia-Pacific • Industry witnessing increased opportunities in areas of biopharmaceuticals, pharmacogenomics and biologicals market • Global pharmaceutical industry anticipated to reach USD 975 billion in 2013
106
300
14%
250
12%
with a CAGR of over 10% from 2006-
0
accounts for a significant share of
6%
100 50
• M edical/healthcare segment
8%
150
• USD 250 billion industry in 2010, 2010
10%
200
4%
Growth
Market Size
GLOBAL PERSPECTIVE - BIOTECHNOLOGY
2% 2006
2007
2008
2009
2010
Market Size
166
186
209
231
250
Growth
9%
12%
12%
11%
8%
0%
Source: ABLE Biospectrum Survey
the global market, with revenue of
Region-wise Market - 2010
about USD 165 billion, representing 67% of the industry
26%
• Promising growth prospec ts indicative in Asia-Pacific region, particularly in the emerging area of
46%
25%
agricultural and industrial bi0technology • Global market expected to grow at
Americas
Europe
3% Asia-Pacific
Middle East & Africa
CAGR of 8% from 2011-2015, to USD 390 billion
Region-wise Market - 2010
• Robust growth anticipated in Asia and Europe,
with CAGR of 12%
67%
14%
and 7% respectively
11% 8% Medical/Healthcare
Service provider
Food & Agri
Other
107
INDIAN PERSPECTIVE - PHARMACEUTICALS
Market Share by value in Asia-Pacific
• USD 16 billion industry in 2010-11, ranking 3rd in terms of production volume • India ranks 14th largest by value, primarily on account of lower manufacturing cost of drugs in India, ranging from 5% to 50% less in comparison with developed countries
19% 10%
Japan China
9%
• The industry has reported CAGR of over 10% since the last five years, attributed to the following factors:
India 10%
South Korea
52%
• Burden of diseases
Rest of Asia -Pacific
• Economic growth leading to higher disposable incomes • Growth of demand for Private and Government Health Insurance • Increasing investment by domestic and international players in India • Deeper penetration into rural markets • Growth and availability of healthcare and incentives for setting up special economic zones (SEZs)
Indian Pharma Industry Growth (USD billion) 18 16 4%
R-1
14
CAG
12 10
• The domestic market is highly fragmented with more than 3,000 pharmaceutical players and 20,000 manufacturing units, employing a workforce of over 500,000
8 6 4 2 0 2007
Source:Department of Pharmaceuticals, GoI 108
2008
2009
2010
2011
DOMESTIC MARKET DOMINATED BY GENERIC DRUGS • Generic drugs account for over 70% of the domestic market, attributed to robust domestic demand and relatively lower manufacturing cost supporting robust growth in exports • Majority of the manufacturing units are located in the western region
West Bengal 7%
Andhra Pradesh 7%
Gujarat 15%
Tamil Nadu 5% OTC medicines 20%
Generic drugs 72%
Maharashtra 30%
Others 36% Patented drugs 8%
• Characterized by large and competitive work force, low production and R&D costs, India has over 200 export destinations (including
10
40%
9
35%
8
30%
Despite significant growth in production and
7
25%
export volumes, imports of some life saving, new
6
20%
5
15%
generation, under patent formulations like anti-
4
10%
3
5%
regulated markets in North America and Europe). •
cancer, cardio vascular and anti-hypertension
2
0%
continue to be imported. Although the volumes
1
- 5%
are relatively modest, imports have grown at
0
Growth
Export Trend – USD billion
emerged as a key pharmaceuticals exporter, with
-10%
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
CAGR of 26% in the last five years Source:Ministry of Commerce, GoI 109
INDIAN PERSPECTIVE - BIOTECHNOLOGY Market Share (by value) in Asia-Pacific
14% 9% Japan
• USD 3.5 billion industry in 2011, registering a growth of about 21% over the last year. India is among the top 12 biotech destinations in the world, ranking 3rd by value in Asia-Pacific market
China
5%
India South Korea
15% 57%
Rest of Asia-Pacific
• Industry dominated by exports, which accounted for 51% of the total revenue in 2010-11. Biopharma segment accounts for over 60% of the total industry turnover • O ver 350 companies in I ndia, dominated by the south and west region, with 175 and 139 companies respectively. The sector currently employs over 20,000 scientists • Top 20 companies contributed 52% of the industry revenue in 2010-11
Growth of Indian Biotech industry (USD billion) CAGR – 19% 4 4 3 3 2 2 1 1 0 2007
2008
2009
Source:ABLE Biospecgtru Survey 110
2010
2011
DOMESTIC, EXPORT MARKET DOMINATED BY BIO-PHARMA Market Segmentation
Bio-services 19%
4000 Bio-agri 14%
3500 3000
Bioinformatics
2500
Bio-industrial 4%
Bioindustrial
2000
Bioagri
1500 Bio-pharma 62%
Bioservices
1000
Bio-informatics 1%
Biopharma
500 0 2006-07
2007-08
2008-09
2009-10
2010-11
Bio-agri is the fastest growing sector from 5% to 14% in industry ......... in 2010-11
Bio-pharma and bio-services constitute over 80% of the domestic biotechnology market
Trade Pattern • About USD 1.8 billion of industry revenue contributed by exports – primarily comprising bio-pharma (63%) and bio-services (34%)
Export Trend 2 1.8 1.6
• Bio-pharma – Vaccines, diagnostics, therapeutics
1.2
• Bio-services – Contract research, outsourcing services • Relatively negligible impor ts in comparison with total trade
USD billion
• Key export items:
1.4
R CAG
%
- 29
1 0.8 0.6 0.4 0.2 0 2007
2008
2009
2010
2011
Source:ABLE Biospecgtrum Survey 111
KEY ADVANTAGES IN BIOTECHNOLOGY SECTOR Favourable IP climate Low-cost operations • R&D costs in India significantly lower; outsourcing to India can save up to USD 200 million (Rs. 800 crore).
• Adherence to TRIPS agreement with regard to the Patent Protection Act implemented in 2005 has increased the confidence of innovator companies in India.
• Cost of clinical trials 50% lower in phase I and 60% lower in phase II compared to global markets.
Name of Institution
Area of focus
National Center for Biological Sciences
Biochemistry, bioinformatics and genetics
• Clinical trials take significantly lesser time in India.
Jawaharlal Nehru Institute for Advanced Scientific Research
Molecular and chemical biology and genetics
National Institute of Immunology
Immunology
Institute of Genomics & Integrative Biology
Genomics, genome informatics and proteomics
International Centre for Genetic Engineering and Biotechnology
Molecular biology and biotechnology
Centre for Cellular & Molecular Biology
Bioinformaticand genetics
Centre for DNA Fingerprinting & Diagnostics
Computational biology and bioinformatics
Central Drug Research Institute
Drug discovery and regulatory studies
Large pool of talented human resources • India has a large talent pool of science students pursuing higher education. • 5,000 PhDs and 1,000 postdoctorals in biosciences-related fields. • Numerous top-notch life science education and research institutes.
112
SWOT ANALYSIS, KEY TRENDS AND IMPLICATIONS Strengths • Higher GDP growth leading to increase in disposable income in the hands of general public and their positive attitude towards spending on healthcare • Cost competitiveness • Low-cost, highly skilled set of English speaking labour force • Growing treatment naive patient population Opportunities • Global demand for generics rising • Rapid OTC and generic market growth • Increased penetration in non-metro markets • Large demand of quality diagnostic services • Significant investment from MNCs • Public Private Partnership (PPP) for strengthening infrastructure Increased investments & MNC activity
Increasing reach in non-metro markets
• Shift towards a networked business mode
• Seen as the next volume driver, though costs of operation is high due to poor health infrastructure
• Increasing M&A and alliances • Consolidation in the market
Goods and Service Tax (GST)
• Though delayed from its April 2010 implementation date, GST will add significant efficiencies to economy and lead to an overhaul of supply chain
Weaknesses • Poor all-round infrastructure is a major challenge • Stringent price controls • Lack of data protection • Poor health insurance coverage
Threats • Labour shortage • Wage inflation • Government expanding the umbrella of the Drugs Price Control Order (DPCO) • Considerable counterfeiting threat • Competition from other emerging economies
Growing insurance
Changing disease profile
Goods and Service Tax (GST
• Use of • More numbers of • Shift towards technology & IT patients will be biotech & for innovation in coming in for speciality healthcare treatment therapies, delivery e.g. increased Mobile clinics investment in R&D and acute disease segment will sustain strong growth
113
GROWTH DRIVERS Change in spending pattern
1
2
Growth in key segments
• India’s population of 1.2 billion projected to rise to 1.6 billion by 2050
• Patent regime suppor ting low cost manufacturing of generic drugs
• Increasing middle class population rapidly acquiring purchasing power necessar y to afford quality healthcare
• A robust OTC segment growth likely in view of liberalization of OTC sales (schedule K), and encouragement of prescription to OTC switches
• Anticipated Growth in healthcare spending as a percentage total income (figure below)
• Patent drug segment to remain relatively modest, however larger local firms anticipated to augment investment into R&D, supporting patent drug growth
13%
15% 10%
4%
5
Generic Drugs
5%
OTC Drugs
0%
Patent Drugs 1995
3
Growth Drivers
2005
2015
2025
Government’s plan of augmenting public expenditure on health to 2.5% of GDP from current level of
Development of healthcare infrastructure on PPP mode
15% 16% 17% 18%
19%
4
Increasing penetration of healthcare insurance
6
Resolution of data exclusivity laws to increase investor confidence
Attributed to the above growth drivers, Indian Pharmaceuticals and Biotechnology industry anticipated to grow to USD 50-70 billion and USD 15 billion respectively, by the year 2020
114
GUJARAT – THE PHARMACEUTICAL HUB
• Gujarat has a well established base of over 1,100 formulation units and about 400 bulk drug manufacturing units
105 year old industry
14% units contributing 30% to India’s Pharma sector turnover
40% of India’s CRAMS companies
28% of India’s Pharma exports
40% of Pharma machinery production
Provides direct employment to more than 60,000 people
• The state’s share in national production has increased from 22% in 2007-08 to 30% in 2010-11 • The state houses units manufacturing diverse products including tablets, capsules, dr y syrups, ex ter nal p re p a rat i o n s, c y to tox i c d r u g s, vaccines, small and large volume parental, APIs, biopharma products, medical devices • Gujarat has also emerged as a leading state in patent applications in India. Various SMEs, research organizations and academic institutions have filed a total of 900 patents from 2007-08 to 2009-10
Source:Pharmexcil, IDMA, FDCA 115
EMERGING BIOTECHNOLOGY HUB
Vibrant Gujarat – MoUs signed in Biotechnology sector (USD 1400
• The landscape of Gujarat Biotech industry, consist of more than 50 Biotechnology companies (14%) and 66 support organizations • The thrust areas of Gujarat Biotech industry include healthcare, pharmaceuticals, agriculture b i o t e c h n o l o g y, i n d u s t r i a l enzymes bioinformatics, contract research, marine and environmental biotechnology • The present annual turnover in biotechnology in Gujarat has been around USD 150 – 175 million (Rs. 700 crore) • Vibrant Gujarat Summit 2011 witnessed investment intentions of USD 1.2 billion with total 35 MoUs between state biotech players and industrialists from abroad and outside Gujarat
116
1200 1000 800 600 400 200 0 2003
2005
2007
2009
2011
Source:www.vibrantgujarat.com
Major Alliances with Foreign partners
Zydus
Altana and Biogen
Reliance Life sciences
GenMedix
Intas Biopharma
Virionics Corporation
Synchron
Parexel and Innovance
Alembic
UCB
PHARMA, BIOTECH INFRASTRUCTURE – CLUSTER/SEZ/IR
Ahmedabad cluster Manufacturing Base: • APIs • Formulations • Biologicals • Contract manufacturing
PHAEZ (Cadila Pharma) Location: Ahmedabad Area: 200 hectare Likely activities: Biologicals, APIs & Pharmaceuticals
PHARMEZ (Zydus Cadila) Location: Ahmedabad Area: 49 hectare Likely activities: Pharmaceuticals
Vadodara cluster Manufacturing Base: • Formulations • Biogenerics
Dishman PHARMA SEZ Location: Ahmedabad Area:139 hectare Likely Activities: Bulk drugs
Mehsana Biotech Park
Savli Biotech Park Pharmaceuticals identified as a potential sector in 3 SIRs – Viramgam, Changodar and Okha
Jamnagar Biotech Park
Ankleshwar cluster Manufacturing Base: • APIs • Formulations • Vaccines
J B Chemicals SEZ Location: Bharuch Area: 130 hectare Likely activities: Bulk drugs, Intermediates, R & D and Contract manufacturing
Jubilant PHARMA SEZ Location: Bharuch Area: 200 hectare Likely activities: Manufacturing hub for pharmaceuticals, fine & specialty chemicals outsourcing
Bharuch and Vapi/Valsad cluster Manufacturing Base: • Formulations • APIs
117
ACADEMIC INFRASTRUCTURE - PHARMACEUTICALS No. of seats (full time) Pharmacy degree
First pharmacy college in India was established in Gujarat – L. M. College of Pharmacy established in 1947 providing diploma, bachelor and master courses in pharmacy
8000 7000 6000 5000 4000 3000 2000 1000 0
6758
3705
2007-08
2008-09
2009-10
2010-11
Source:Gujarat Socio-economic review 2011-12
• • • • • • •
NIPER Gujarat Cancer Research Institute Directorate of Forensic Science B.V. Patel PERD center Zydus Research Center North Gujarat University Department of Biotech, Gujarat University • Nirma Institute of Pharmacy
• • • • •
118
National Research Center for Groundnut Central Salt and Marine Chemicals Research Institute Department of Life science, Bhavnagar University Junagadh Agriculture University Department of Bioscience, Saurashtra
• Navsari Agriculture University
• National Research center for Medicinal & Aromatic Plants • National Dairy Development Board • Gujarat State Fertilisers Corporation • Sun Pharma research center • MS University of Vadodara • Anand Agriculture University
ACADEMIC INFRASTRUCTURE - BIOTECHNOLOGY
Agro Biotech
• • • • •
Anand Agriculture University, Anand CP college of Agriculture, Sardar Krushinagar Junagadh Agricultural University, Junagadh Navsari Agricultural University, Navsari National Research Center in Medicinal and Aromatic plants
• L.M. college of pharmacy • B.V. Patel PERD (Pharmaceutical Education & Research Pharma Biotech Development) Center • Nirma Institute of Pharmacy • Center for Salt & Marine Chemical Research Institute (CSMCRI) Marine Biotech • Department of Marine Sciences, Bhavnagar University
Environment Biotech
• • • • • •
Department of Bioscience, S.P. University The National Institute of Occupational Health Department of Microbiology, MS University of Baroda Department of Microbiology, Gujarat University Department of Life science, Bhavnagar University Gujarat Ecological Education and Research Foundation
Medical Biotech • Cancer Research Institute, Ahmedabad • Genetics center, Ahmedabad
Biotech Engineering
Bioinformatics
• Department of Microbiology and Biotechnology, MS University of Baroda • Department of Biotechnology, Hemchandracharya, North Gujarat University • Department of Biochemistry, MS University of Baroda • Department of Food and Nutrition, MS University of Baroda • • • • • • • •
MSc in Bioinformatics, Gujarat University Sardar Patel University, Vallabh Vidhyanagar MS University of Baroda Bhavnagar University, Bhavnagar Saurashtra University, Rajkot Indian Institute of Advanced Research, Gandhinagar Sikkim Manipal University, Ahmedabad Study center Bioinformatics Institute of India, Ahmedabad Study center
Banaskantha
Gandhinagar Ahmedabad
Anand Vadodara
Rajkot
Junagadh
Bhavnagar
Navsari
National Institute of Pharmaceutical Education and Research (NIPER) • The Government of India has declared NIPER as an ‘Institute of National Importance’ • National level institute in pharmaceutical sciences with an objective of becoming center of excellence for advanced studies and research in pharmaceutical sciences • Set up in Ahmedabad district having the masters course in pharmacy with an intake capacity of 31 students
119
PRESENCE ACROSS VALUE CHAIN - PHARMACEUTICALS
Manufacturing
Research and Development
Design of Molecule
Research Biology
Pre-clinical Development
Clinical Development Phase I/II/III
Education / Research Institutes
API manufacturing
Phase IV trials
Formulation
Packaging
Sales & Marketing
• • • •
Nirma Institute of Pharmacy C U Shah college of Pharmacy and research S R Patel college of Pharma education and research B K Modi government pharmacy college
• • • • •
Zydus Cadila Healthcare Ltd. Claris Life sciences Ltd. Cadila Pharmaceuticals Ltd. Intas Pharmaceutical Ltd. Sun Pharma
• • • •
Lambda Therapeutics Quintiles Synchron B A Research
Research & Development
Manufacturing
Marketing and Exports
Contract Research Organisations
120
• • • • •
Torrent Pharmaceuticals Ltd. Dishman Pharmaceuticals Abott Laboratories Wyeth Jubilant Organosys
PRESENCE ACROSS VALUE CHAIN - BIOTECHNOLOGY
Basic Research
Drug Discovery
Integration and Product development
Manufacturing
Transportation Logistics
Marketing and Sales
Services
Crop protection
Research Areas
• • • • • • • •
Clinical research Industrial testing Sea water, Marine algae Environmental Agriculture Medicinal and aromatic plants Blood collection and testing Healthcare
Pharmaceutical
Bioinformatics
Marine
Industrial
Biotechnology
Preventive medicines
Seeds
Growth stimulator
Services
Marketing
R&D
Agriculture biotechnology Microbiology Biochemistry Genetic engineering Plant tissue culture Plant & Animal science Pharma technology Education Industrial biotechnology
Agriculture
• • • • • • • •
Manufacturing
Business Areas
Diagnostics
Biopharma therapeutics
Sector Areas Nutraceuticals Phyto pharmaceuticals
Vaccines
121
MAJOR PLAYERS IN GUJARAT
Ahmedabad
Ankleshwar Rajkot
122
Surat
Vadodara
POLICY INTERVENTIONS
4.5.2 123
GUJARAT: INDUSTRIAL POLICY
Gujarat aspires to become a beacon of comprehensive social and economic development.
Industrial Policy 2009
Incentives Thrust Sectors
Various Sector
Manufacturing
specific
Services
Subsidy on
Infrastructure
electricity
Regional Focus
duty Up gradation
FDI/NRI
of industrial estates
124
HR/Labour
Business
Labour law
Environment
flexibility
Single window
Infrastructure
Industry-academia
clearance
Support for
collaboration
Marketing support
Urban
support for
Grievance
Physical
development
redressal
Industrial
of specialized
Information
institutes
centers
GUJARAT: INDUSTRIAL POLICY
Interest Subsidy on eligible parameters
Venture Capital & Patent Assistance
Quality Certification & Skill Enhancement
Technology Acquisition Fund
Support to R&D Institutions
Market Development Support
Support for Vendor Development
Support to auxiliary industries for value addition
Cluster Development in PPP mode
Rehabilitation of Sick Units
Promotion of specific sectors
125
GUJARAT: SEZ POLICY SEZ incentives • Income Tax Incentives • Corporate tax holiday on export profit – 100% for initial 5 years and 50% for the next 5 years thereafter and 50% of the ploughed back export profit for next 5 years • External commercial borrowing by SEZ units upto US $ 500 million in a year without any maturity restriction through recognized banking channels • Single window clearance for Central and State level approvals • Exemption from State sales tax and other levies as extended by the respective State Governments
SEZ incentives • Income Tax Incentives • 100% tax holiday for a period of any 10 consecutive years out of 15 years beginning from the year in which the SEZ is notified • Exempt from dividend distribution tax • Other Benefits • Full freedom in allocation of developed plots to approved SEZ units on purely commercial basis
SEZ incentives • Common Incentives • Indirect Tax Incentives • Nil customs duty • Nil excise duty • Exemption from service tax
126
SUPPORT FOR BIOTECHNOLOGY SECTOR
Funding
Incentives
Gujarat Biotechnology Venture Fund (GBVF) is set up by the State to support entrepreneurs with an initial corpus of USD 10 million * ( Rs. 50 Crore)
The State has proposed to provide special package of incentives, on case to case basis for mega BT projects having an investment of USD 20 million (Rs. 100 Crore or more)
Biotechnology
Policy Institution Gujarat State Biotechnology Mission (GSBTM) has been constituted to encourage new entrepreneurs into biotech and attract investments in the State
State Biotechnology policy 2007-2012 State proposes to develop sector specific Biotechnology Zones and Parks. State proposes to promote biotech research & strengthen industry-academia linkage
127
GOVERNMENT INITIATIVES
128
Presence of Pharmaceutical Export Promotion Council (Pharmexcil)
The State has allowed setting up of Special Economic Zones in the sector which will boost pharmaceutical investments
Promotion of generic drugs by giving them preference in Government purchases
I.T. application for issuance of manufacturing license, sales license and product license implemented by FDCA
Establishment of National Institute for Pharmaceutical Education and Research (NIPER) for Human resource development
For quick disposal of various documents like CoPP, NCC and FSC, FDCA has started the process of I.T. application
Incentives to encourage R&D in the sector in terms of various tax benefits
Establishment of Center of Excellence for Clinical Research
Establishment of Gujarat Genomics Initiative, Genetic Diagnostic centers and Gene Banks
Establishment of Center of Excellence for various sectors of biotechnology
INVESTMENT OPPORTUNITIES
4.5.3 129
OPPORTUNITIES
Manufacturing
Services
R&D
Source: Industries Commissionerate 130
• • • • • • •
API & Formulations Medical Equipment Healthcare Products Pharmaceutical Machinery Vaccines Bio-pharma and therapeutics BT seeds and crops
• • • • • •
Contract research Contract manufacturing Diagnostics Pharmaceutical Retail Stem cell banking Infrastructure
• Clinical research • Genetic engineering • Drug research and development
GEMS & JEWELLERY
4.6 131
OVERVIEW
4.6.1 Source: Industries Commissionerate 132
GLOBAL SCENARIO INDIA WILL CONTINUE TO BE A KEY MARKET GLOBALLY
Market Size (USD billion) • Global Gems & Jewellery sector is expected to grow to $230 billion by 2015, from $185 billion in 2010; growing at a CAGR of 4.5% • United States is the largest consumer • Market size of India and China is expected to grow to a level equivalent to that of United States
250
230
185
200
GR CA % 5 4.4
150
• India is the largest consumer of gold • India is also the largest diamond processing centre in the world; contributing 60% to global diamond cutting and polishing • India exports around 95% of the world’s processed diamonds
100
50
0 2010 2015
Source: GJEPC, WGC, GFMS, CARE, CRISIL 133
INDIAN SCENARIO LARGEST GEMS & JEWELLERY PROCESSING CENTRE
• Indian Gems & Jewellery market was valued at $27 billion in 2011, and is expected to grow at CAGR of 15% to $55 billion in 2016 • India is world’s largest processing centre for Gems • Gems and Jewellery sector is the 2nd largest foreign exchange earner in India, • India is home to more than 3 lakh traditional jewellers; accounting for 96% of the overall market • Branded jewellery / organized retail market is expected to grow at CAGR of around 40% in next 3 years Source: Care, GJEPC, CRISIL 134
KEY DEMAND DRIVERS Consumer spending in India (In $ billion)
Gold Price (INR per 10 gram) 25,000
1400
– 17% CAGR
1200 1000 800
1153.12
1252.32
986.81
20,000 15,000
783.33 10,000
600 400
5,000
200
2009
2010
2011
2012
%
-11
R CAG
11 20 9 0 20 7 0 20 5 0 20 3 0 20 1 0 20 9 9 19 7 9 19 5 9 19 3 9 19 1 9 19 9 8 19 7 8 19 5 8 19 3 8 19 1 8 19 9 7 19
0
Above, 80% of the Jewellery in India is made of Gold
Growing spending power
Investment led demand
With the growing economy, spending power of the people is also rising with a CAGR of 17% since last 3 years, leading to growth of jewellery demand in India
Gems & Jewellery these days are also looked as potential investment option: given the higher returns on investments it has provided during past
Source: Euromonitor International, GJEPC 135
KEY DRIVERS OF DEMAND Indian Gems & Jewellery exports (In $ billion)
Indian population forecast (In Million) India is the 2nd largest country by population: contributing around 17% of the overall global population
2000
2010-11
1500
2009-10
1000
2008-09
500
2007-08
0
5%
0.2
2 R–
G CA
2006-07 2016 0-4
5-9
2021 10-19
20-29
2026 30-59
> 60
-
10.00
20.00
Cut & Polished Diamonds
Traditional domestic demand
Gold Jewellery
40.00
50.00 Other
Foreign demand
• for the tradition of buying jewellery during auspicious periods (Diwali, Dhanteras) and during wedding occasions to round the year purchases
• The sector is 2nd largest foreign exchange earner in the Indian economy; contributing 17.5% to the total export earnings of the country
• Around 17% of the forecasted would be in 20-29 age - the most likely age for wedding; contributing to domestic wedding demand
• It has grown with a CAGR of 20% in last 5 years
Source: India stat, GJEPC 136
30.00
GUJARAT SCENARIO GEMS & JEWELLERY MANUFACTURING HUB OF INDIA
Some of the leading players in Gujarat
•
Over 70% of total Gems and Jewellery exports of India are from the state
• Around 55% of the global and more than 80% of India’s processed diamonds are processed in Gujarat • State contributes 85% of unique handmade silver jewellery production of India • The sector is dominated by highly unorganized players and is fragmented in nature in Gujarat
Source: GJEPC, Socio-economic review 2010-11 137
SURAT: THE GLOBAL DIAMOND PROCESSING HUB
• Surat is the largest diamond processing cluster in the world • 90% of total diamonds in Gujarat are p ro ce s s e d by a b o u t 1 0 , 0 0 0 diamond units located in and around Surat; employing work force of around 1 mn • Presence of Indian diamond institute has lead to an increase in labour productivity • Surat specializes in processing smallest low grade diamonds
Surat is called “A Silky City Sparkling with Diamonds”
Source: iNDEXTb, GJEPC 138
INDUSTRIAL INFRASTRUCTURE CURRENT & PLANNED GEMS & JEWELLERY CLUSTERS Gems & Jewellery SEZ in Gujarat
Palanpur
Imitation Jewellery cluster
Gems & Jewellery cluster
Ahmedabad
Name\Particular
Area (In Ha)
Status
Industry
SUR SEZ
50
functional
Multi-sectoral
Gems & Jewellery SEZ - Gujarat Hira Bourse
74
Formal approval granted
Gems & Jewellery
Rajkot Accessories and costume jewellery cluster Bhavnagar
Global diamond processing hub
Surat Navsari
Upcoming gems & jewellery clusters on PPP mode
Valsad
Gems & Jewellery Park at Bhavnagar
Gems & jewellery clusters in Gujarat
Gems & Jewellery Park at Sanand
Surat, Ahmedabad and Rajkot are the major gems & jewellery clusters
Source: IC office, GIDC & GIDB 139
EDUCATIONAL INFRASTRUCTURE AVAILABILITY OF SKILLED CRAFTSMAN
Labour cost per carat in USD
Major institutions offering courses specific to Gems & Jewellery 160 140 120 100 80 60 40 20
Telaviv/Israel
Shenzen/China
0 Antwerp/Belgium
National Institute of National Institute of Fashion Technology (NIFT), Design (NID), Gandhinagar Ahmedabad
Gujarat/India
Indian Diamond Institute (IDI), Surat
Entrepreneurship merged with skilled craftsman is the key enabling factor for Gems & Jewellery sector in Gujarat
Source: HBS report, Education dept, Govt of Gujarat, GJEPC 140
POLICY INTERVENTIONS
4.6.2 141
FOSTERING GROWTH OF GEMS & JEWELLERY POLICY SUPPORT BY GOVERNMENT OF INDIA
100% FDI through automatic route
Exemption for rough coloured precious gems from custom duty
Duty free import of consumables for metals other than gold and platinum up to 2% on Freight on board
Duty free import entitlement for rejected jewellery up to 2% of FOB value of exports
Import of gold of 18 carat and above under the replenishment scheme
No import duty on polished diamonds
The limit value of jewellery parcels for exports through foreign post office raised from $50k to $75k
Establishing ‘ Diamond Bourses’ to make India and international diamond trading hub
Source: iNDEXTb 142
FOSTERING GROWTH OF GEMS & JEWELLERY SECTOR POLICY SUPPORT BY GOVERNMENT OF GUJARAT
For establishing modern jewellery units
Interest subsidy at 3% to a maximum of Rs. 15 lakh for a term not higher than 5 years
Hallmark certification/Training institute • Maximum financial assistance of 3% to a maximum of Rs.15 lakh for a term no higher than 5 years for setting up of Hallmark certification/Gem testing centre • Assistance for setting up hallmark certification centre • Support for setting up training institutes • Need based financial assistance for setting up training institute focusing on the Gems & Jewellery sector
Financial assistance for setting up Jewellery parks
• Assistance of viability gap funding of 20% of the total project cost to private developer intending to develop Jewellery park on PPP basis • Financial assistance of 50% of total project cost to a maximum of Rs. 10 crore to Industries/ Industries association intending to develop Jewellery park on PPP basis
Source: IC office 143
INVESTMENT OPPORTUNITIES
4.6.3 144
INVESTMENT OPPORTUNITIES
Jewellery fabrication & retail
Infrastructure development
Diamond studded jewellery Jewellery Parks Gold Jewellery Modern Jewellery units Silver Jewellery Platinum Jewellery Rings Studded Gold & Silver jewellery chains & ornaments
Educational institutes focussing on Gems & Jewellery sector Establishing hallmark centre Gemmology institute with testing facility
Hand made Gold and silver ornaments
Source: iNDEXTb 145
ADVANTAGE GUJARAT
Source: TERI, GEDA 146
5
GUJARAT – THE STATE WITH STRATEGIC LOCATION
147
GUJARAT – INDIA’S ECONOMIC POWERHOUSE
148
GUJARAT – ROBUST INFRASTRUCTURE
149
GUJARAT – STRONG URBAN, SOCIAL AND EDUCATIONAL INFRASTRUCTURE
150
GUJARAT – LAND OF INNOVATIVE HUMAN CAPITAL
151
GUJARAT – NEW PARADIGM FOR INDUSTRIAL GROWTH
The current phase – involving Integrated development of large areas like SIRs, PCPIR and DMIC – is poised to transform the industrial scenario in the state
Level of Integration
Integrated large area developments
202 Industrial Estates
83 product clusters Phase I
Phase II
• Special Investment Regions (>100 sq. km.) and Industrial Areas (50-100 sq. km.)
SEZs • Multi product • Chemical • Textile • Pharma • IT / ITeS • Electronics • Engineering • Biotech • Gems & Jewellery
• GIDC Industrial Estates • Petroleum, Chemicals and Petrochemicals Investment Region • Knowledge corridor • Logistics parks • Theme towns
Phase III
Phase IV
• Delhi Mumbai Industrial Corridor
Phase of industrial development
152
GUJARAT - PROACTIVE GOVERNANCE
153
OPPORTUNITIES TO INVEST IN GUJARAT
154
DOING BUSINESS IN GUJARAT
Source: TERI, GEDA
6
155
OVERALL FRAMEWORK FOR DOING BUSINESS
156
TAX FRAMEWORK
157
EXCHANGE CONTROL REGIME
158
FRAMEWORK FOR SETTING UP INDUSTRY IN GUJARAT
159
