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Special Relocation Incentive Will Attract Global Firms To shift From China To Gujarat: Gujarat CM Vijay Rupani
The Government of Gujarat has launched New Industrial Policy 2020, initiating Relocation Incentives. Gujarat does attract FDI from many counties for the ease of doing business and conducive investor friendly policy but that that has not happened for the global investors who are planning to shift from China in big way. On such policy issues, Gujarat Chief Minister Vijay Rupani speaks with BW Businessworld's Manish Kumar Jha.
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You announced a new Gujarat Industrial Policy 2020 that aims to provide an estimated Rs 40,000 crore as subsidies to industries in the next five years. What are the policy elements?
Gujarat is known to support industries at every stage. Under the New Gujarat Industrial Policy 2020, the state government has taken several path breaking initiatives. Gujarat is the first state to undertake a bold decision to de-link incentives from SGST and give capital subsidy to large industries.
Other initiatives include: Availability of Government land on lease for industrial purpose, Relocation Incentives, Promotion of Micro, Small and Medium Enterprises (MSMEs), Promotion of MSMEs SC/ST entrepreneurs, Use of Rooftop Solar Power by MSMEs, Promote Startup & Innovation, Support for Research & Development in state Special focus on promotion of Service Sector MSMEs, Promotion of Thrust Sectors, Attracting Large/Mega and Ultra-Mega Investments, Conducive Industrial Infrastructure, Support for Environmental Infrastructure & Initiatives for Sustainable Development and Skill enhancement etc.
Govt will be provide support to up to 65 per cent of the cost of acquiring foreign patented technologies by MSMEs. What is outlay for such scheme?
The government has always laid thrust on promotion of innovation and R&D in the state. In the new policy also, significant focus has been laid on the same. The Budget outlay for individual schemes, particularly those related to innovation and R&D is flexible and we plan to support all eligible applicants.
What has been the FDI in Gujarat in the year 2020 since the pandemic led disruption in the investment?
Over the past 4 years, the government has taken several initiatives for Ease of Doing Business and other policy reforms. This has led to a unprecedented increase in investments by both large and small enterprises.
In FY 2019-20; with total FDI of ~INR 43000 crore, Gujarat saw the highest national increment of 240% in FDI inflows from previous year as against a growth of 14% in FDI in India.
The New Gujarat industrial policy will give further boost to this investment trend in the state.
While announcing the new industrial policy, you said Gujarat welcomes all those industrial units who are planning to shift from China and other countries due to the pandemic. So far, such investment from China has not happened. What is new in the scheme?
Today, China supplies almost 40%to 60% of raw material and finished products to all over world. But, as per news in global newspaper, Global firms want to shift from China to India or ASEAN countries. Due to COVID 19, we had conducted number of webinars with International organizations to know the difficulties faced by companies.
It was clearly indicated that they will not be able to shift 100% of their production from China. But still they might shift significant portion of their production to India or ASEAN countries.
In this context, Govt. of Gujarat has introduced Special Relocation incentives for those companies who wants to relocate and set up industry in Gujarat
What is your take on the large infrastructure and key industries of the State, specific to LNG, petrochemicals, chemicals, iron and steel, and cement which have faced crisis during pandemic and need policy support?
In the New Industrial Policy 2020, the Government of Gujarat has taken a bold step and removed the list of ineligible activities as mentioned in earlier Incentive to Industries scheme.
In new Industrial Policy 2020, LNG, petrochemicals, chemicals, iron and steel, and cement are eligible for incentives.