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Gujarat Announced Tremendous Surge In FDI: Principal Secretary Manoj Das
Gujarat government recently announced a relief package of Rs. 14,000 crore for industries to help revive and restore the economy after the lockdown under the guidance of the Chief Minister.
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After securing the top position viz domestic investments committed to the country, Gujarat also reported a stellar growth in Foreign Direct Investment (FDI) in 2019-20. Even as other industrialized states such as Maharashtra, Tamil Nadu, Andhra Pradesh, etc. reported an overall drop in FDI last year, Gujarat’s FDI grew by a staggering 240%, the highest amongst Indian states.
PM Modi government's thrust consider India to be one of the most open economies for Foreign Direct investment after it improvised guidelines for certain sectors in the previous five years. On the other hand, governments over the globe have been progressively obstructing the passage of overseas investments on national security grounds, as per a December report from the United Nations Conference on Development and Trade.
With the recent interest of overseas companies for investing in Gujarat, this trend is likely to accelerate even further. Over 30 companies such as Deutsch Colour, American Hygienics Corporation, Zentiva, Global Rare Earth, etc. representing various countries such as USA, UK, China, Czech Republic, Taiwan, Austria, Germany, South Korea, etc. are in advanced stage of discussion with the state government to commence their operations in Gujarat. These companies have committed an investment of almost Rs. 61,000 crore and are expected to generate almost 50,000 employment opportunities over the next two years. Cumulative land requirement of these companies stands at 5,800 acres. Gujarat Industrial development corporation (GIDC) is supporting these companies in accruing land across different locations as per their requirement. Arcelor Mittal, which entered Gujarat with their recent acquisition of a steel plant in Hazira is also expanding its operations substantially in the state. India’s second largest refinery, Nayara energy also has significant expansion plans and are in the process of obtaining environment clearance. These two major expansions would boost FDI in Gujarat significantly and create job opportunities for the youth.
In addition to the above, almost 50 applications have been received between April to June 2020 for acquiring land in GIDC estates mostly in the districts of Ahmedabad, Bharuch, Rajkot, Vadodara, Bhavnagar and Valsad. The state investment promotion agency - Industrial Extension Bureau has also handled and responded to about 30 investor proposals from companies based in France, Singapore, Italy, etc.
Manoj Das, Principal Secretary, Gujarat CM stated that - “The increased interest evinced by both domestic and foreign companies in Gujarat is a testimony to the visionary and proactive leadership of Chief Minister Shri Vijay Rupani. Recent initiatives under his leadership, by way of policy support, ease of doing business reforms, exemption from select labour laws and MSME Ordinance have substantially enhanced the confidence of companies intending to invest and expand in Gujarat. The state offers the right ecosystem with the presence of large companies and a network of over 3.3 million MSMEs which function across the value chain, provide forward/backward linkages and higher return on investment. The constant support and guidance provided from the Central Government has also paved the way for Gujarat to retain its strong position.”
A testimony of these efforts is seen in the report issued by Invest on Great Places of Manufacturing in India for Multinationals in May 2020. The report identified locations across various industry sectors most suited for setting up manufacturing facilities for multinational corporations. The locations from Gujarat that have been included among the list of India’s world class investment destinations include Dahej for Chemicals and Petrochemicals, Sanand-Mandal- Bechraji for Automobile & Automobile Components, Ahmedabad, Halol & Vadodara for Drugs & Pharmaceuticals and Ahmedabad & Sanand for Electronics & Consumer Appliances.
Officials of the Industries & Mines Department have had successful interactions with the potential investors through webinars, tele-conferences, etc. during Covid times to apprise them of the investment climate and support mechanism that the state has to offer. The investors are informed of key value propositions offered by Gujarat which include proactive and forward- looking policies, robust framework of ease of doing business and handholding by a business friendly and stable government has emerged as a key pull factor for these companies. Moreover, the network of ports and access to hinterland markets has proved to be beneficial to existing investors to maximize return on their investment. Some of the webinars include those with JETRO to discuss investment opportunities for Japanese companies looking to shift their supply chains outside China, webinar on Electronics and ESDM sectors for foreign investors organized by Invest India and webinars on Electronics sector, Textiles sector and Pharmaceuticals and Medical Devices sector organized by Embassy of India in Japan with Japanese investors. State is also participating in the upcoming webinar on investment opportunities for Japanese investors being organized by the Embassy of India in Japan on 17 June 2020.
All the above webinars had senior level participation from Fortune 500 companies and other large industries, key government stakeholders, office bearers of various trade associations and chambers of commerce, overseas embassy / consulate officials, etc.
The state government recently announced a relief package of Rs. 14,000 crore for industries to help revive and restore the economy after the lockdown under the guidance of the Chief Minister. The benefits offered by the state include rebate in property tax, electricity payments, vehicle taxes, subsidy for industries in GIDC estates, interest subsidy, etc. This has been an important step to handhold and support the companies that have been affected by the pandemic. Support provided to industrial units during difficult times is raising confidence and is reassuring the investors.
Thus, amidst a worldwide pandemic and trepidation of notable development deceleration, Narendra Modi's administration took a significant choice to boycott foreign direct investment (FDI) under the programmed course from nations having land fringes with India. The altered FDI strategy is planned for anticipate "shrewd takeovers" of Indian companies in the midst of the COVID-19 pandemic. Specifically, investigators stress that, in the post-COVID period, Chinese organizations will purchase up troubled resources at an expendable cost.