Gujarat Manufacturing Sector Profile Focusing on Engineering, Textiles, Auto, Chemicals & Pharma

Manufacturing Sector Profile
SECTOR PROFILE

Table of Contents
1 India - Preferred erred investment in estment destination
2 Gujarat - Preferred investment destination in India
3 Manufacturing sector in Gujarat - Overview
and focus sub sectors
4 Manufacturing focus sub-sectors
4.1 Engineering
- Overview
- Gujarat Scenario – 2017
- Interventions planned
- Investment Opportunities
4.2 Technical Textile
- Overview
- Policy intervention
- Gujarat scenario - 2017
- Interventions planned
4.3 Auto
- Overview
- Gujarat Scenario – 2020
- Policy Initiatives and Interventions planned
- Investment opportunities
tunities
4.4 Chemicals & Petrochemicals
- Overview
- Policy interventions
- Gujarat Scenario – Year 2017
4.5 Pharmaceuticals & Biotechnology
- Overview
4.6 Gems & Jewellery
- Overview
5 Advantage Gujarat
6 Doing business in Gujarat
7 Key government agencies

INDIA - PREFERRED INVESTMENT DESTINATION
01
1

15.0%
10.0%
5.0%
2011-12
(A)
2010-11
(Q)
2009-10
2008-09
2007-08
02
INDIA - PREFERRED INVESTMENT DESTINATION
9th largest economy in the
world by nominal GDP and
3rd largest by purchasing
power parity (PPP)
Recorded the highest growth
rates in the mid-2000s
One of the fastest growing
economies in the world (GDP
growth rate – 8.6% in 2011)
GDP growth rate
Sectors’ contribution to GDP
CAGR
Exports
14%
CAGR
Imports
14%
India is one of the
major G-20 economies:
400
350
300
250
200
150
100
50
th the 17 largest exporter and
th 11 largest importer in the world
Main Export Partners
1.73
1.6
1.52
Automobile
industry
Construction
activities
nd The 2 preferred global
investment destination
China
India
Brazil
US
10%
Growth
Decline
No Change
(World Investment Prospects Survey
2010-2012 by UNCTAD)
USD 254 billion of FDI inflows
between April 2000 and
March 2012
US
13%
UAE
12%
China
8%
Hong Kong
4%
Main Import Partners
China
12%
UAE
7%
Saudi Arabia
6%
US
6%
Australia
5%
FDI Confidence Index, 2012
A.T. Kearney Survey
FDI - Top Sectors
9.5% 9.6% 9.3%
6.8% 8.0% 8.6%
0.0%
2006 2007 2008 2009 2010 2011
1.52
1.87
0 0.5 1 1.5 2
Germany
Services
30%
Telecommunications
12%
Computer software
and hardware
11%
Real estate
11%
Power
7%
6%
Metallurgical
industries
5%
Pharmaceuticals
5%
Petroleum
and natural
gas
3%
- 200 400 600 800 1,000 1,200
Agriculture Industry Services
USD, billion
16%
17%
17%
18%
19%
20%
25%
26%
26%
26%
25%
26%
59%
58%
57%
56%
56%
2006-07 54%
Trade Scenario, USD billion
0
1990-91 1994-95 2000-01 2004-05 2010-11
Export Import

World's largest
democracy with
1.2 billion people
Land of abundant
natural resources
democr natur
and div
diverse
climatic conditions
Enabling business
environment
greater global
participation
Strong Mark
Fundamen
Market
Fundamentals
Access to
result of the
IT revolution
Impetus on
Infrastruc
De
Infrastructure
Development
Progressive
simplification and
rationalization of
direct and indirect
tax structures
Competitively
priced skilled
labour
pric
en
with gr
technology as
a r
simplific
rationaliza
ADVANTAGE INDIA
03

04
GUJARAT - PREFERRED INVESTMENT DESTINATION IN INDIA
2

GUJARAT HAS BEEN RANKED 1ST AS PER THE “ECONOMIC FREEDOM RANKINGS
05
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 10%
Growth in agricultural output in
the state over the last 10 years 11%
A highly industrialized state - Gross State
Domestic Product contribution from
manufacturing sector 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 100%
A state with a high and
growing literacy rate 79%
26% A state with one of the highest share in
investments under implemented projects
in India

MANUFACTURING SECTOR IN GUJARAT - OVERVIEW AND FOCUS SUB SECTORS
3
06

07
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%
Investments
400,000
300,000
200,000
100,000
-
in manufacturing sector
(Rs. crore)
CAGR - 19%
Gujarat aspires to become a
beacon of comprehensive social
and economic development by
Creating more
employment
Development of entire
value chain of the sector
Focusing on value
addition in product
development/ processes
Development of
knowledge base in sectors
Sustainable
development
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10

08
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

09
GUJARAT AIMS TO ACHIEVE ~32% OF THE CONTRIBUTION FROM
MANUFACTURING SECTOR IN THE NEXT 5 YEARS
Secondary sector of Gujarat
contributes ~ 35.9% of GSDP
Contribution by manufacturing
sector ~ 25.7% of GSDP in Gujarat
Sectors that contribute to ~ 80% of manufacturing sector output
Technical
Textiles
Speciality
chemicals
Gems &
Jewellery
Auto and
Automobiles
Precision
Engineering
including
defence offsets
Pharmaceu-ticals
&
Biotechnology
Food and
Agri products
Textiles
Chemical and
chemical
products
Fabricated metal
products, except
machinery and
equipment
Pharmaceuticals,
medical chemical
and botanical
Food products
Fabricated metal
products except
machinery
Coke refined
petroleum
products and
nuclear fuel
Basic metals
Machinery and
equipment
The following sub-sectors drive the growth of these major sectors

10
NATIONAL INVESTMENT AND MANUFACTURING ZONE
AHMEDABAD- DHOLERA SPECIAL INVESTMENT REGION
Source :Government of Gujarat
• PROPOSED INTERNATIONAL AIRPORT @ FEDRA
• SH-6 AND SH-20 PASSING THROUGH
• CONNECTED TO NH-8
• ABUTTING TO PROPOSED KALPSAR PROJECT

11
NATIONAL INVESTMENT AND MANUFACTURING ZONE (SANAND-BECHARJI)
Becharji Manufacturing Zone
Viragam Special Investment Region
Sanand Cluster
Ahmedabad Urban Development Authority
Dholera Special Investment Region

12
MANUFACTURING FOCUS SUB-SECTORS
4

• North America, Europe, and North Asia
are the largest service providers;
contributing 91% of the overall global
market
• 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
15
GLOBALLY, ASIA IS THE LARGEST PRODUCTION CENTER
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
-
Key global engineering segment
output estimates (In Rs. billion)
2010 2011 2012* 2013* 2014* 2015*
Engineering
services
Heavy electrical
equipment
Industrial
Machinery
Machine Tools
Electrical
equipment
• 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
Source:2012 World Machine Tools Output & Consumption Survey, IBISWorld Pvt Ltd, Datamonitor Plc, PwC analysis
Note: * Forecasted
Rate of 1 USD = Rs. 50. (assumed)

13%
16
INDIA – ONE OF THE KEY LEADING MARKETS IN ASIA
• 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
Exports by segment in 2011
27%
9%
17%
Iron and steel
Electronic goods
Manufacturing of metals
Machinery and instruments
Source: Department of Heavy Engineering, EEPC, IBEF
Size of key engineering segments
(in Rs. Crore)
2008-09 2009-10 2010-11
35,000
30,000
25,000
20,000
15,000
10,000
5,000
-
Electric generators 1,778 2,117 2,580
Turbines 4,193 5,428 6,990
Boilers 10,154 12,764 17,018
Machine tools 2,138 2,484 3,624
Engineering Exports
(In Rs. crore)*
14%
20% Other engineering goods
Transport equipments
* Note: 1 USD = Rs.50
400,000
300,000
200,000
100,000
-
CAGR - 18.5%
2007 2008 2009 2010 2011

17
KEY EMERGING ENGINEERING SECTORS
Defence offsets
Electronic system & design manufacturing
• 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
• 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

18
GUJARAT – A KEY ENGINEERING PRODUCTION CENTER OF INDIA
Gujarat's contribution in India
Fabrication of metal products
Machinery and equipment
Baasic metals
Transport equipment
Electrical equipment
Source; ASI 2009-10, GIDB, IC Office
6.7%
6.0%
10.4%
9.0%
12.7%
16.2%
Electronics
0.0% 5.0% 10.0% 15.0%
• 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
Some of the leading players in engineering sector

19
KEY ENABLERS FOR ENGINEERING SECTOR IN GUJARAT
6, Presence across
the value chain 1, Strong local
emand
2, Foreign investments
and technology
transfer
5, Integrated Industrial
Infrastructure
3, Sound base of
Engineering
SME clusters
4, Availability of
skilled manpower

• 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
Gujarat is the only
power-surplus state in
The state envisages to
increase the existing
power generation
capacity of the state to
30,000 MW by 2020.
This will lead huge
20
1. STRONG LOCAL DEMAND
the country.
demand for the
engineering sector.
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)
Source: PwC analysis, Socio-economic review 2010-11
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.
Gujarat contributes to
31% of the national
textile output
Manufacturing
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
Power Infrastructure

• 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
Food processing
Chemical &
Petrochemical
Pharmaceutical
Glass & Ceramics
21
2. FOREIGN INVESTMENTS AND TECHNOLOGY TRANSFER AGREEMENTS
IN THE ENGINEERING SECTOR
*Foreign Technology Agreements in
Gujarat during 1991 to 2011
Engineering
Chemicals &
Petrochemicals
Pharmaceutical
Textile
Glass Ceramics
Others
• Engineering sector contributes about 59.31% of
the total foreign technology transfer agreements
commissioned/under implementation in terms
of investments
*FDI in Gujarat during 1991 to 2011
Engineering
Textile
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

22
3. SOUND BASE OF ENGINEERING SME CLUSTERS
Kutch
Jamnagar
Porbandar
Banaskantha
Surendranagar
Rajkot
Junagadh
Amreli
Ahmedabad
Bhavnagar
Source: Industries Commissionerate, Govt. of Gujarat
Sabarkantha
Panchmahal
Vadodara
Kheda
Bharuch
Surat
Navsari
Valsad
Gandhinagar
Patan
Mehsana
Anand
Dang
Nadiad
• Ahmedabad, Anand, Rajkot, Vadodara,
Surendranagar, Jamnagar, Mehsana,
Panchmahal and Kutch have emerged
as favored locations
Foundry & Forgings
Steel Pipes and tubes
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

• 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
23
4. AVAILABILITY OF SKILLED MANPOWER
60,000
40,000
20,000
-
No. of seats available in engineering
colleges in Gujarat during 2010-11
44,710
39,648
Diploma Bachelors
degree
1,897
Masters
degree
Self Finance
Grant in aid
Government
Source: Commissionerate of Technical Education, Gujarat Government

24
5. INTEGRATED INDUSTRIAL INFRASTRUCTURE
Source: GIDC
Kutch
Jamnagar
Porbandar
Banaskantha
Patan Sabarkantha
Surendranagar
Junagadh
Amreli
Mehsana
Changodar
Bhavnagar
Rajkot
Ahmedabad
Vadodara
Bharuch
Surat
Navsari
Valsad
Gandhinagar
Anand
Dang
Dahod
Panchmahal
Nadiad
Narmada
Kheda
Particular Units Symbol
Special economic zones 7
Special investment regions 10
DMIC influence area
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
Dholera
Hazira
Okha
Navlakhi
Sanand
Pipavav
Simar
Anjar
Most prominent locations
with economic benefits
for locating engineering
unit

25
6. PRESENCE ACROSS THE VALUE CHAIN
. • .
Heavy engineering
Heavy electrical
• Boilers
•
Turbines and
generator sets
• Transformers
•
control gear
Switchgear and
• Textile machinery
• Ceramic machinery
• Sugar machinery
• Rubber machinery
•
Material handling
equipment
• Oil field equipment
• Metallurgical machinery
• Dairy machinery
•
utility vehicles
Passenger and
• Auto components
• Agricultural machinery
•
Earth moving and
construction machinery
Source: Commissionerate of Technical Education, Gujarat Government
Light engineering
• Roller bearings
•
and consumables
Welding equipment
• Casting and forging
• Pipes and tubes
• Fasteners
•
Medical and
surgical instruments
•
instruments
Process control
• Domestic appliances
• Electronics
Engineering sector
Heavy engineering
and machine tools
Automotive Low technology
products
High technology
products

GUJARAT SCENARIO – 2017
4.1.2
26

27
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

INTERVENTIONS PLANNED
4.1.3
28

29
GOVERNMENT INTERVENTIONS PLANNED TO BOOST THE SECTOR
• 3 precision engineering clusters with state-of-
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

4.1.4
30
INVESTMENT OPPORTUNITIES
Source: GIDC

31
Engineering service outsourcing
Transformers & Boiler manufacturing
Auto components
Defence offset
Material handling equipment
Machine tools

34
GLOBAL TECHNICAL TEXTILES SCENARIO
ASIA WILL CONTINUE TO BE THE MOST IMPORTANT DEMAND CENTRE
• Global Technical Textiles market is
estimated around Rs. 6,35,000 crore
in 2010 from Rs. 4,64,400 crore in
2000
• 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
• China and India are expected to drive
demand in the Asian region
29%
Technical Textiles consumption by region
23%
45%
3%
America
Europe
Asia
Rest of the world
Growth of retail and large construction projects will drive demand in these countries
Source: David Rigby Associates (Note: $ =50 rs is considered for calculation)

35
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

Packtech: 22% Clothtech: 20% Hometech: 20%
Indutech: 18% Mobiltech: 17% Sportech: 17%
Buildtech: 17% Meditech: 20% Protech: 23%
Agrotech: 20% Geotech: 22% Oekotech: 22%
36
INDIAN TECHNICAL TEXTILES SCENARIO
A HIGHLY POTENT AND RAPIDLY GROWING INDUSTRY
• 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
• It is expected to grow at a CAGR of 20%
during the next 5 years
• 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%
180000
160000
140000
120000
100000
80000
60000
40000
20000
0
CAGR - 20%
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)
Source: Ministry of Textiles, PwC Analysis (CAGR is calculated for 5 year period – 2011-12(E) to 2016-17 (P))
(E) – estimated, (P) - projected

37
GUJARAT TECHNICAL TEXTILES SCENARIO
THE HUB FOR TECHNICAL TEXTILES IN INDIA
• Gujarat Technical Textiles market is
estimated around Rs. 6,100 crore in 2011-
12; contributing around 10% to the
national Technical Textiles output
• 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
Some of the leading organized
players in Gujarat

GEOGRAPHICAL DISTRIBUTION OF EXISTING TECHNICAL TEXTILES UNITS IN GUJARAT
Source: iNDEXTb
38
Sub-sector Units (In %)
Agrotech 1.7
Buildtech 4.1
Clothtech 47.8
Geotech 1.2
Hometech 8.1
Indutech 13.5
Meditech 1.4
Mobiltech 0.7
Packtech 18.5
Protech 1.9
Oekotech 0.35
Sportech 0.8
• Te c h n i c a l Te x t i l e s u n i t s a r e
p r e d o m i n a n t l y l o c a t e d i n
Ahmedabad, Surat, Vadodara and
Kutch
• Around 48% of the units are of
Clothtech segment
Kutch
Jamnagar
Porbandar
Banaskantha
Patan Sabarkantha
Surendranagar
Junagadh
Amreli
Mehsana
Bhavnagar
Rajkot
Ahmedabad
Vadodara
Bharuch
Surat
Navsari
Valsad
Gandhinagar
Anand
Dang
Dahod
Panchmahal
Nadiad
Narmada
Kheda
Existing

39
KEY ENABLERS OF GROWTH FOR THE INDUSTRY
STRONG PRESENCE OF ALL ENABLERS IN GUJARAT
4. Availability
of required skill sets
1. Strong
domestic demand
2. Industrial infrastructure
and transport connectivity
3. High raw
material availability
5. Presence of
Non-Woven industry

40
1. STRONG DOMESTIC DEMAND
• 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.
9
8
3
7
Cement Horticulture Automobile Chemical Infrastructure
Source: iNDEXTb, National Horticulture Board, Gujarat Socio-economic review 2010-11, PwC analysis
Packtech
Hometech
Clothtech
Indutech
Buildtech
63 Others 10
End usage by sub-sectors of Technical
textile market in Gujarat (In %)
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

2. INDUSTRIAL INFRASTRUCTURE AVAILABILITY AND TRANSPORT CONNECTIVITY
41
Kutch
Jamnagar
Porbandar
Banaskantha
Surendranagar
Junagadh
Amreli
Bhavnagar
Rajkot
Ahmedabad
Sabarkantha
Vadodara
Bharuch
Surat
Navsari
Valsad
Gandhinagar
Patan
Mehsana
Anand
Dang
Dahod
Panchmahal
Nadiad
Narmada
Kheda
Source: www.sezindia.nic.in, GIDB, GIDC, IC Office
Most prominent locations for
locating Technical Textile
Textile & Apparel SEZ (4)
Integrated textile parks (7)
Product clusters (18)
Research & testing facility (2)
Educational infrastructure
DMIC influence area

42
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
• It is also the largest producer of cotton
in India; contributing to more than 30%
of the cotton produced in India
Man-made fibres Contribution to
Natural fibres
Banaskantha
Patan Sabarkantha
Surendranagar
Mehsana
Source: iNDEXTb, Agriculture & Co-operative Dept, Gujarat Govt, PwC analysis
technical textiles
Polyester
Poly-olefines
Acrylic 80%
19%
Polyamide
Glass Fibre
Cotton
Kutch
Jamnagar
Porbandar
Junagadh
Amreli
Bhavnagar
Rajkot
Ahmedabad
Vadodara
Bharuch
Surat
Navsari
Valsad
Gandhinagar
Anand
Dang
Dahod
Panchmahal
Nadiad
Narmada
Kheda

R.C. Technical Institute,
Faculty of Engineering Ahmedabad
& Technology (MSU),
Sarvajanik College
of Engg & Tech, Surat Govt. Girls
Yearly intake of Diploma courses as on 2010-11
43
4. AVAILABILITY OF REQUIRED SKILLED SETS
Centre of Excellence:
It focuses on research, new
product & technology development,
consultancy, training skilled manpower,
testing etc
Educational Infrastructure:
It offers degree and diploma courses
on textile engineering, processing,
technology , chemistry, design,
manufacturing technology and
processing technology.
Industrial Training Institutes (ITI):
These are institutes which provide
skilled manpower to the industry
60
Textile processing technology
Textile manufacturing technology
MANTRA - Man-made
Textile Research
150
100
50
Association
Source: Commissionerate of Technical Education, Education Department, Govt. of Gujarat, iNDEXTb
135
120
0 20 40 60 80 100 120 140 160
Textile design
33 22
132
18
18
0 25
Textile engineering Textile processing Textile technology Textile chemistry
Bachelor Master
Research &
testing facility:
Degree courses Diploma courses: Industrial Training
Institutes (ITI’s):
ATIRA - Ahmedabad
Textile Industry
Research Association
L. D. College of
Engineering,
Ahmedabad
Dr. S & S Gandhy College
of Engg. & Tech., Surat 28 ITI’s in Gujarat
provide industrial
training courses
on Textile and
Yearly intake of Degree courses as on 2010-11
Polytechnic, Surat
Vadodara
Sir Bhavsinhji
Polytechnic Institute,
Bhavnagar

• 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
in India is $o.o4/per capita, very low compared
44
5. PRESENCE OF NON-WOVEN INDUSTRY
THE EMERGING CONVERSION CONFLUENCE
Consumption of non-woven industry
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

POLICY INTERVENTIONS
4.2.2
45

Specified technical textile products are covered under focus product scheme/green technology products/hi-tech products
46
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
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

47
FOSTERING GROWTH OF TECHNICAL TEXTILES
POLICY SUPPORT BY GOVERNMENT OF GUJARAT
Credit linked interest subsidy
•
Rs. 125 lakh, in addition to interest subsidy offered by Govt. of India.
Credit linked interest subsidy in Technical Textiles of 6% for purchasing new plant & machinery to a maximum of
Technology acquisition and upgradation
•
Rs 25 lakh per process/product once will be provided to the enterprises acquiring new technology.
Financial assistance of up to 50% of the investment for technology acquisition / collaboration, with maximum of
• 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
•
Apparel training institutions
• 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
•
Textile & Apparel Park
Source: Industries and Mines Department, Govt. of Gujarat

GUJARAT SCENARIO - 2017
4.2.3
48

49
• 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

INTERVENTIONS PLANNED
4.2.4
50

51
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

52
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
• Production centre: It would serve 2
purposes:
- To produce the 1st batch of the product
developed in the R&D centre
- It shall generate revenue for the centre
• 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
• 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
Spinning
Marketing
Composite centre of
Textile Industry
Weaving
Knitting
Processing
Finishing
Testing
Marketing
Garmenting
Designing

4.2.5
53

54
COMPOSITE CENTRE –
KEY COMPONENTS WILL HELP IN THE DEVELOPMENT OF ENTIRE VALUE CHAIN
Agrotech
Agro shading net,
packing net for agro
products
Buildtech
Scaffolding net
Clothtech
Narrow width fabric
as fashion accessories
like belt
Geotech
Geotech Woven &
non-woven
geotextiles
Hometech
Hometech High quality
upholstery fabric, narrow
width fabric for furniture
application, wipes for
house hold use, fiber foam
& wadding, fiberfill
products like quit & pillows
Indutech
Glass fiber battery
separator, fusing belts,
high mesh filters.
Industry felt, woolen
felt, fire resistant fabric,
slings for bulk handling
Meditech
Nonwoven disposables
like apron, mask, caps,
draper etc
Mobiltech
Interior carpets &
NVH components
Oekotech
PP nonwoven
liners for land fill
sites of MSW
Packtech
Jumbo bags, FIBC,
coated fabric for
soft luggage
Protech
Fire retardant clothes
Source: iNDEXTb

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 .
Global Vehicle Production (in Million units )
59.0 60.7 64.5 66.5 69.2 73.3 70.5
77.9
26.00
61.8
2.80
6.30
3.50 4.10
5.80
-3.70
-12.40
30
25
20
15
10
5
0
5-
10-
15-
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
2002 2003 2004 2005 2006 2007 2008 2009 2010
World Vehicle Production (Units in Million )
Percentage Increase / decrease (-)
• This level of output is equivalent to a
global turnover (gross revenue) of
almost USD 2.5 trillion.
• 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 .
Top contributor in the Production for Cars and
Commercial Vehicles from 2002-2010
14,977,863
1,147,379
1,856,828
2,641,987
1,059,562
1,124,357
China
India
Brazil
Iran
South Korea
Thailand
In Million units
% Growth
Source : OICA Statistics
57

58
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
India automotive manufacturing industry value:
28.8
$ billion, 2006-10
32.3
35.4 37.4
50
45
40
35
30
25
20
15
10
5
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
Source: SIAM, Datamonitor
45.3
0
0.25
0.2
0.15
0.1
0.05
0
0
2006 2007 2008 2009 2010
11.1 10.9 11.2
17.9
27.5
30.0
25.0
20.0
15.0
10.0
5.0
0.0
5.0-
0.0
Total Automobile Production in India
(in Million units )
The Indian automotive
manufacturing industry
grew by 20% in 2010 to
reach a value of $45 billion
In 2015, the Indian
automotive manufacturing
industry is forecast to have
a value of $66 billion, an
increase of 46% since 2010
The Indian automotive
reached a volume of
18 million units in
the year 2010
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
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
%Growth
$ billion
12%
10%
6%
20%
2010
14.1
25.8
2009
2.1 2.9
2007 2008
13.8
2006
-

59
AUTOMOBILE INDUSTRY MARKET OVERVIEW (2/3)
DOMESTIC SALES OF AUTOMOBILES HAVE BEEN GROWING AT A HEALTHY PACE
Automobile Domestic Sales in India (in Million units )
7.87
-
10-
30
25
20
15
10
5
0
5
14.00
12.00
10.00
8.00
6.00
4.00
2.00
0.00
-4.64
7.25
26.44 26.17
2006 2007 2008 2009 2010
Passenger Vehicles Commercial Vehicles Three Wheelers
Two Wheelers % Growth
Market Share by Volume in Fy 2010-2011
Passenger
Vehicles
Commercial
Vehicles
Three Wheelers
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
In Million units
1.38
0.47
0.40
1.55
0.49
0.36
1.55
0.72
7.44
0.38
0.35
1.95
0.50
0.44
9.37
2.52
0.68
0.53
11.79
% Growth
16%
4%
4%
76%

Passenger Vehicles
60
AUTOMOTIVE MARKET OVERVIEW (3/3)
EXPORTS HAVE GROWN STRONGLY – INDIA BEING CONSIDERED AS HUB FOR SMALL CARS
Automobile Exports in India (Million units )
29.64
35
30
25
20
15
10
5
0
20.00
15.00
10.00
5.00
0.00
6.20
22.42
8.20
23.60
10.04
17.89
2006 2007 2008 2009 2010
Passenger Vehicles Commercial Vehicles Three Wheelers
Two Wheelers Growth Rate
• The volume of exports from the
sector have increased at a CAGR
of 24% during the period 2006 –
2010.
• 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
Source :SIAM
45% 16% 15% 7%
MCV’s and HCV’s
63% 23% 7%
LCV’s
59% 30% 4% 4%
Three Wheelers
41% 40% 10%
Motor Cycles
59% 24% 7% 6%
Scooters
51% 21% 14% 10%
in Million units
% Growth
1.98
0.50
1.48
2.18
0.59
1.41
2.36
0.43
1.48
4.46
0.45
1.73 11.40
4.53
0.76
2.70 15.40

61
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.
• 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.
• 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
CAGR 2007 – 11: 14.6% 113*
CAGR 2011 – 21: 11%*
23.0 30.1 39.9
Source :ACMA
120
100
80
60
40
20
0
66.3*
2007-2008 2008-2009 2009-2010 2010-2011 2015-2016 2020-2021
USD in billion
Turnover of Auto Component Industry
Financial Figures for the years * Estimates
Automative component Market share in India
Electrical
component
9%
Others
7%
Equipment
10%
Suspension
and braking
components
12%
Body and
chasis
12%
Engine parts
Drive
transmission
and steering
components
19%
31%
26.5

62
AUTO COMPONENT INDUSTRY MARKET OVERVIEW (2/2)
INDIA EXPORTS MAINLY ENGINE & TRANSMISSION PRODUCTS AND IS PERCEIVED TO BE VERY COMPETITIVE
Turn over of Exports of Auto components
from India (in USD billion)
35
30
25
20
15
10
5
0
3.8 4.0 3.4 5.2
2007 - 2008 2008 -2009 2009 -2010 2010 -2011 2015 -2016 2020 -2021
Financial Figures for the years
29*
12.3
*
* Estimates
CAGR 2007 -2011: 11%
CAGR 2011-2021: 18.8%
36%
7%
Source :ACMA
28%
23%
1% 5%
Export Destinations
Asia
North America
South America
Australia
Africa
Europe
Auto Component Industry
Investments (in USD billion)
0.66
0.1
1.7
2.3
2.5
2
1.5
1
0.5
0
2007-2008 2008-2009 2009-2010 2010-2011
• 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.
USD in Billion
USD in Billion

63
GROWTH DRIVERS FOR AUTOMOTIVE SECTOR IN INDIA
Source :ACMA
• 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
• Focus on R&D and product development
is increasing
• Working population is growing and
hence, per capita income is increasing
• Disposable income in rural areas is
increasing
• Entry of global players in the market
offers a large number of products in
various segments
• 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
Cost
competitiveness
Increasing
Consumer
demand
Easy
Financing
Schemes
Growth in the
road sector
An Enabling
regulatory
environment
Growth
Drivers
New Product
Launches

64
KEY SUCCESS FACTORS FOR AUTO INDUSTRY IN GUJARAT
Source :ACMA
Growing
Urbanization
Strong
Manufacturing base
Increasing
Investment
Presence
across value chain
Robust
Infrastructure Facilities
Presence of
Strong Auto
Ancillaries

65
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
Maharastra
14%
Source : Ministry of Road Transport and Highways
14000000
12000000
10000000
8000000
6000000
4000000
2000000
0
Number of Motor Vehicles Registered
on road in Gujarat (in Numbers)
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
Others (tractor,
trailor,trucker and
others)
Goods Vehicles
(Truck to Tempo)
Public/Private
Buses
Motor Cars /Jeeps /
Taxis
Auto Rickshaws
Motor Cylcles
/Scooters/Mopeds
Classof Vehicles
11872573
10998651
10289056
12266575
2010-2011- up to August
9497337
Source : Ministry of Road Transport and Highways
CAGR of Registered vehicles for Gujarat from 2001- 2009 is 8.9%
Other
states
54%
Tamil
Nadu
12%
Gujarat
10%
Uttar
Pradesh
10%

Thailand
China
Poland
malaysia
Turkey
Hungary
South Korea
Argentina
Japan
Germany
66
STRONG MANUFACTURING BASE
CONTRIBUTION OF MANUFACTURING SECTOR TO GSDP IN GUJARAT – 26.4% (2009-10)
Manufacturing Sector Contribution
28%
26%
26%
26%
27%
18%
18%
18%
17%
16%
16%
16%
16%
34%
40%
0% 10% 20% 30% 40% 50%
Brazil
Egypt
Russia
India
Gujarat
Source :Source Economic Review of Gujarat , 2010 - 2011
400,000
300,000
200,000
100,000
-
Investments in manufacturing
sector
(Rs. crore)
CAGR -23%
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
Manufacturing Sector break up in Gujarat
26%
21%
7%
6%
3%
5%
5%
5%
5%
17%
Petroleum
Chemicals
Pharmaceuticals
Machinery and Equipments
Fabricated metals Products,
except machinery and equipments
Textiles

67
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
• Industrial automotive bearings
• Automobile gears
• Automobile design centre
• Engineering design for aerospace
industries
• Auto ancillary SEZ/Park
Rajkot
Sanand
Halol
Cluster development approach and strengthening emerging clusters will
add to the strength of the state in attracting further industrial investments

GUJARAT: EMERGING AUTO HUB
LEVERAGING ITS STRENGTHS THROUGH SOUND ECONOMIC POLICIES AND COMPETENT
MANAGEMENT BY THE STATE GOVERNMENT
Ahmedabad
Daman
Source : DMIC
• Low transaction cost for accessing
market in the western and northern
India.
• 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.
Delhi Mumbai Industrial Corridor
Area Planning map
Dadri
J.N.Port
Surat
Rajkot
Vadodara
Mahesana `
End Terminals
DFC Alignment
Cities/
Urban Agglomerations
Diu
68

69
SANAND INDUSTRIAL ESTATE
SANAND AS ONE OF THE PREFERRED LOCATION AMONG AUTO AND AUTO COMPONENT
MANUFACTURERS IN GUJARAT
Source: GIDC, Govt of Gujarat
Area 1,500 hectares
Focus Sectors Automobiles and Ancillary
units, Engineering ,
Engineering plastics,
Semiconductors,
Electronics etc.
Major Auto and Auto Component
players in Sanand
Projects Existing and Proposed
investment in Sanand
Name of Industry No .of. units Investment
(in USD Billion)
Auto 3 2.22
Chemicals 2 0.0071
Textiles 4 0.0069
Pharma 1 0.0068
Electrical 2 0.0235
Cement 1 0.0611
Engineering 1 0.0146
Total Investment 2.404
Location Distance/
Connectivity
element 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 Viramgam-
Sanand line
< 5 km

70
GUJARAT : PRESENCE ACROSS VALUE CHAIN
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
Steel Forging Casting Fabrication
Machinery
production
Automobile
manufa-cturing
Engineering
ancillaries

71
AUTO SECTOR – INVESTMENT SPREAD IN GUJARAT
Source: GIDC, Govt of 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.

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
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.

4.3.2
73

74
GUJARAT SCENARIO - 2020
By 2020, Gujarat aims to
achieve 10% of Engineering
output from Auto and auto
components from
current level of 3.7%
Changodar
Viramgam
Navlakhi Savli
Rajkot
Okha Dholera
Simar
Anjar
Sanand -
Halol
The upcoming Special Investment Regions (SIR) will
act as global investment destinations, supported
by modern infrastructure, premium civic amenities,
centers of excellence and proactive policy framework
Particular Symbol
Existing auto clusters
Emerging auto clusters in SIRs by 2015
Emerging auto clusters in SIRs by 2020
DMIC influence area

4.3.3
75

76
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

4.3.4
77

78
• 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

79
CHEMICALS AND PETROCHEMICALS
4.4

81
GLOBAL PERSPECTIVE
Linkage with
demand from
emerging regions
USD 2.4 trillion
industry in 2010
3,000
2,500
2,000
1,500
1,000
500
Source: Industries, SIAM & ACMA
Sector growth recorded at 11%
in 2010, as against a negative
growth of 7% in 2009
Manufacturing base shifting
to Asia on account of lower cost and
presence of end use markets
Europe
25%
Middle
East, Africa 3%
Americas
28%
Asia-Pacifica
47%
Commodity
Plastics
12%
Bulk Chemicals
13%
Petrochemicals
26%
Specialty
Chemicals
Others
10%
Consumer
Chemicals
15%
24%
Asia-Pacific accounts for 46% of the
total consumption
2006 2007 2008 2009 2010
Market Value 1987 2181 2342 2173 2413
Growth 10% 7.00% -7% 11%
Global GDP Growth 5% 3.00% -0.50% 5%
12%
10%
8%
6%
4%
2%
0%
-2%
-4%
-6%
-8%
0
Industry grew at a CAGR of 5% from 2006-2010
Petrochemicals and specialty chemicals account
12%
10%
8%
6%
4%
2%
0%
World Europe USA Asia Latin
America
for 50% of the market
Asia registered the highest production growth

82
ASIA PACIFIC EMERGING AS A KEY MANUFACTURING CENTRE
Chemical Sales by Country: Top 10 – USD billion
China USA Japan Germany France Brazil South
800
700
600
500
400
300
200
100
0
Imports Region-wise Trade Pattern Exports
Source:UN Comtrade
Korea
India Italy Taiwan
2010 748 514 199 184 99 98 97 73 65 64
2009 541 451 156 148 88 73 72 51 57 56
Region-wise sales - 2010
Americas
25%
Europe
24%
RoW 2%
Asia-Pacific
49%
China to remain a key
importer in the medium term,
attributed to strong domestic
demand
China
11%
USA
8%
Japan
3%
France
5%
Germany
7%
United
Kingdom
4%
RoW
62%
China
6%
USA
11%
Japan
6%
France
5%
Germany
10%
RoW
58%
United
Kingdom
4%
Total trade in 2010 – USD 1.2 trillion

83
KEY GROWTH DRIVERS - GLOBALLY
Petrochemical supply
in Middle East
Economies of scale on
account of lower
feedstock rates
Proximity to Asian markets
•
•
0% 20% 40% 60% 80% 100%
Automobile
Clothing
Agricultural production
Semiconductors
Shoes, snickers and other footwear
Compact discs and tapes
Manufacture of plastic bottles
Household fabrics and floor coverings
Material inputs to many industrial sectors
Commoditization in
specialty chemicals
Increased competition
affecting gross margins
(except a few niche
segments
•
Technology and innovation
Development of superior,
cost effective technologies
•
Feedstock costs
• Mitigating volatility
through tie up with
companies having
feedstock advantage
• Alternate feedstock
Environment
Development of green
technology and
environment
friendly products
•
Demand growth in Asia
Anticipated growth in
domestic demand as well
as lower manufacturing
cost favouring exports
to trigger massive
apacity growth
•
c
Chemical industry contribution to industrial sectors
Critical success factors
Economies
of scale
R&D and
Product
Innovation
Value
addition
through
Solutions
Greater
customer
orientation
Strong supply
chain
management
Strong
Environ-mental
focus

GLOBAL CHEMICAL INDUSTRY IN 2020
2010 2015 2020
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
Industry
Growth-USD
billion
2413 3260 4362
0
Segment CAGR -
CAGR –
2010-15 2015-20
Specialty Chemicals 5% 5%
Petrochemicals 7% 7%
Commodity Chemicals 8% 7%
Polymers 6% 6%
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%
• 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
• Manufacturing more than 70,000
products
• Lower levels of per-capita consumption
indicating significant growth potential
Indian Chemical Industry – USD 60 billion
3%
25%
27% 45%
Petrochemicals Specialty chemicals Agrochemicals Other
Export performance – Chemicals and related
products – USD billion
50
40
30
20
10
0
Per capita consumption - India
and World (kg)
PVC Soda Ash Polyester Other polymer HVC
HVC – Olefins, Aromatics, pyrolysis gas, acetylene, hydrogen
2006-07
2.5
2.0
1.5
1.0
0.5
0.0
2007-08 2008-09 2009-10 2010-11
Exports 1.20 1.63 1.61 2.04 2.30
85
India World
Source: Department of Chemicals and Petrochemicals, GoI
Department of Commerce, GoI

KEY STRENGTHS AND GROWTH DRIVERS
Domestic Market
End use market segments including
packaging, construction, electronics,
automobile, textiles expected to
grow above 10%
•
R&D Strength
• Potential to evolve as an innovation
oriented with network of 200 national
laboratories and 1,300 Research and
Development centers
Most chemical
items fall under
the RBI automatic
approval route
for FDI investment
up to 100%
Skilled English
speaking
working force
Increasing
government
support to PSUs
and autonomous
bodies
Provision of
requisite
infrastructure
Domestic Chemical Industry anticipated to grow at a rate of 10-12% till 2020
through
SEZs / planned
PCPIR
Procedures
relating to
investments
are simplified to
encourage FDI
Increasing
industry
focus on quality
and specialized
application
areas
Low cost manufacturing
Manufacturing cost is lower in India
than most developed economies,
which also offers export opportunities
•
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
•
86

INDIAN CHEMICAL INDUSTRY IN 2020
180
160
140
120
100
80
60
40
20
0
Segment-wise anticipated growth - USD billion
2010-11
Other
Agrochemicals
Specialty chemicals
Petrochemicals
• 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
2019-20
87

GUJARAT: THE HUB FOR CHEMICAL INDUSTRY
• 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
• More than 35% of large and
medium units in the state
• Provides 16% of employment in the
state
• Leads all states in India in terms of
i n v e s t m e n t s c o m m i t t e d i n
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
Source: GCA
Gujarat’s share in India – Value of output Annual
Survey of Industries 2009-10
34.05%
42.22%
16.07%
14.12%
12.73%
13.04%
28.83%
Other non-mineral
Others
Textiles
metallic
products
Machinery and
equipment
Pharmaceutical,
medicinal chemical
Chemical and
Chemical Products
Coke, refined
petroleum
0% 20% 40% 60%
0% 20% 40% 60% 80% 100%
Methanol
LAB
Caustic Soda
Ethylene
Acetic Acid
Polymers
Soda Ash
Gujarat’s contribution to national output
88

SOME OF THE LARGEST CHEMICAL AND PETROCHEMICAL COMPLEXES OF
THE WORLD EXIST IN GUJARAT
IPCL
(RIL) GACL
UPL
Atul
Products
Tata
Chemicals
Gujarat
Heavy
Chemicals
Saurashtra
Chemicals
IFFC
GSFC Pipavav
IOC
Essar ONGC Indian
Rayon
Dhrangadhra
Chemicals
KRIBHCO
Chemical
port
terminal
Dahej
Shriram
GNFC Mundra
RIL
LNG
Hazira RIL
Nirma
LNG
terminal
Dahej
Refineries
(87MTPA)
Chemical
and LNG
terminal
(15MTPA)
Petrochemical
complexes
Chlor Alkali
plants
(1MMTPA)
Soda Ash
plants
(3 MMTPA)
Chemical
Fertilizer
plants
Container
handling
89
IPCL
(RIL)

FOREIGN INVESTMENTS AND TECHNOLOGY TRANSFER AGREEMENTS
IN THE CHEMICAL SECTOR
*Foreign Technology Agreements in
Gujarat during 1991 to 2011
Engineering
Chemicals &
Petrochemicals
Pharmaceutical
Textile
Glass Ceramics
Others
59%
31%
2%
8% 1%
• Chemicals and Petrochemicals sector
contributes about 31% of the total
foreign technology transfer agreements
commissioned/under implementation
in terms of investments
• 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
*FDI in Gujarat during 1991 to 2011
22%
12%
3%
46%
17%
Engineering
Textile
Chemical &
Petrochemical
Infrastructure
Others
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
gas producing industry, packaging industry,
shipbuilding/fabricating unit and other small
chemical industries
Firms already present
• Indian Petrochemicals Corporation Limited (IPCL)
Petronet LNG
Gujarat Chemical Port Terminal Company Limited (GCPTL)
•
•
91

PCPIR ADVANTAGE
Export promotion
measures
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
Chemical port
terminal
and chemical
storage
facility at
Dahej
Availability of
natural resources
Concentration of
Petroleum, Chemical
and Petrochemical
estates across
the district
Rich natural
resources
and feedstock
availability
Location advantage Road and rail Airport connectivity Support infrastructure
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
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, Dry-
Bulk and Liquid
Chemicals
92

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
Source: GPCB
Ahmedabad
Bharuch
Surat
Rajkot
Navsari
Valsad
Vadodara
93

INVESTMENT SCENARIO
• 5th Vibrant Gujarat Summit was
held on 12-13 Jan,2011
• Total 7,936 MoUs worth Rs.20.8
lakh crore were signed during the
Summit
• 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
Value of MoUs signed during
Vibrant Gujarat Summits (USD billion)
Source: www.vibrantgujarat.com
500
450
400
350
300
250
200
150
100
50
0
2003 2005 2007 2009 2011
94

LEADING COMPANIES IN GUJARAT
95

4.4.2
96

GUJARAT: INDUSTRIAL POLICY
Gujarat aspires to become a beacon of comprehensive social and economic development.
Incentives
Various Sector
specific
Subsidy on
electricity
duty Up gradation
of industrial
estates
HR/Labour
Labour law
flexibility
Industry-academia
collaboration
support for
development
of specialized
institutes
Business
Environment
Single window
clearance
Marketing support
Grievance
redressal
Information
centers
Infrastructure
Support for
Urban
Physical
Industrial
Thrust Sectors
Manufacturing
Services
Infrastructure
Regional Focus
FDI/NRI
Industrial Policy 2009
97

• 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
Rehabilitation
of Sick Units
Promotion
of specific
sectors
98

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

For Developers of SEZs
•
• 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

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
• 3 speciality chemical zones to be developed in Jambusar, Padra and Dahej
New chemical zones
for Specialty and
Fine Chemicals
• Facilitate provisioning of modern infrastructure
Infrastructure
management
Efficiency – energy
and water
• 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
•
•
Promoting R & D
and Centre of
Excellence
• Centres of excellence for specialty and fine chemicals will be set up at Ankleshwar &
Dahej
103

PHARMACEUTICALS & BIOTECHNOLOGY
4.5
104

GLOBAL PERSPECTIVE - PHARMACEUTICALS
A USD 856 billion industry in 2010, registering a CAGR of 7% over the last six years
2005 2006 2007 2008 2009 2010
900
800
700
600
500
400
300
200
100
Market Size
Market Size 605 651 720 788 819 856
Growth 8% 8% 11% 9% 4% 5%
12%
10%
8%
6%
4%
2%
0%
0
Region-wise Market - 2010
39%
15%
29%
11%
6%
North America Europe
Asia/Africa/Australia Japan
Latin America
Growth
Source: IMS Health 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

GLOBAL PERSPECTIVE - BIOTECHNOLOGY
• USD 250 billion industry in 2010,
with a CAGR of over 10% from 2006-
2010
• M edical/healthcare segment
accounts for a significant share of
the global market, with revenue of
about USD 165 billion, representing
67% of the industry
• Promising growth prospec ts
indicative in Asia-Pacific region,
particularly in the emerging area of
agricultural and industrial
bi0technology
• Global market expected to grow at
CAGR of 8% from 2011-2015, to USD
390 billion
• Robust growth anticipated in Asia
and Europe, with CAGR of 12%
and 7% respectively
2006 2007 2008 2009 2010
300
250
200
150
100
50
Market Size 166 186 209 231 250
Growth 9% 12% 12% 11% 8%
14%
12%
10%
8%
6%
4%
2%
0%
0
Growth
Market Size
25%
3%
46%
26%
Americas Europe Asia-Pacific Middle East & Africa
67%
14%
11%
8%
Medical/Healthcare Service provider Food & Agri Other
107
Source: ABLE Biospectrum Survey

INDIAN PERSPECTIVE - PHARMACEUTICALS
• 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
• The industry has reported CAGR of over
10% since the last five years, attributed to
the following factors:
• Burden of diseases
• 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)
• 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
18
16
14
12
10
8
6
4
2
0
Market Share by value in Asia-Pacific
Indian Pharma Industry Growth (USD billion)
2007 2008 2009 2010 2011
Source:Department of Pharmaceuticals, GoI
52%
10%
Japan
China
India
South Korea
Rest of Asia -Pacific
19%
9%
10%
108
CAGR - 14%

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
Gujarat
15%
Maharashtra
30%
West Bengal
7%
Andhra
Pradesh
7%
Tamil Nadu
5%
Others
36%
Generic drugs
72%
OTC
medicines
20%
Patented
drugs
8%
• Characterized by large and competitive work
force, low production and R&D costs, India has
emerged as a key pharmaceuticals exporter, with
over 200 export destinations (including
regulated markets in North America and Europe).
• Despite significant growth in production and
export volumes, imports of some life saving, new
generation, under patent formulations like anti-cancer,
cardio vascular and anti-hypertension
continue to be imported. Although the volumes
are relatively modest, imports have grown at
CAGR of 26% in the last five years
40%
35%
30%
25%
20%
15%
10%
5%
0%
- 5%
-10%
10
9
8
7
6
5
4
3
2
1
0
Export Trend – USD billion
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Source:Ministry of Commerce, GoI
Growth
109

INDIAN PERSPECTIVE - BIOTECHNOLOGY
• 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
• 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
Market Share (by value) in Asia-Pacific
57%
14%
9%
5%
15%
Japan
China
India
South Korea
Rest of Asia-Pacific
Growth of Indian Biotech industry (USD billion)
4
4
3
3
2
2
1
1
0
CAGR – 19%
2007 2008 2009 2010 2011
Source:ABLE Biospecgtru Survey
110

DOMESTIC, EXPORT MARKET DOMINATED BY BIO-PHARMA
4000
3500
3000
2500
2000
1500
1000
500
Trade Pattern
2
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
Export Trend
Source:ABLE Biospecgtrum Survey
Bio-services
19% Bio-agri
14%
Bio-industrial
4%
Bio-informatics
1%
Bio-pharma
62%
0
2006-07 2007-08 2008-09 2009-10 2010-11
Bioinformatics
Bioindustrial
Bioagri
Bioservices
Biopharma
Market Segmentation
Bio-pharma and bio-services constitute
over 80% of the domestic biotechnology market
• About USD 1.8 billion of industry
revenue contributed by exports –
primarily comprising bio-pharma (63%)
and bio-services (34%)
• Key export items:
• Bio-pharma – Vaccines, diagnostics,
therapeutics
• Bio-services – Contract research,
outsourcing services
• Relatively negligible impor ts in
comparison with total trade
Bio-agri is the fastest growing sector -
from 5% to 14% in industry ......... in 2010-11
0
2007 2008 2009 2010 2011
USD billion
111
CAGR - 29%

KEY ADVANTAGES IN BIOTECHNOLOGY SECTOR
Low-cost operations
• R&D costs in India significantly
lower; outsourcing to India can
save up to USD 200 million (Rs.
800 crore).
• Cost of clinical trials 50% lower
in phase I and 60% lower in
phase II compared to global
markets.
• Clinical trials take significantly
lesser time in India.
Favourable IP climate
• Adherence to TRIPS agreement with regard to the Patent Protection Act
implemented in 2005 has increased the confidence of innovator
companies in India.
Large pool of talented human
resources
• India has a large talent pool of
science students pursuing higher
education.
• 5,000 PhDs and 1,000 post-doctorals
in biosciences-related
fields.
• Numerous top-notch life science
education and research institutes.
Name of Institution Area of focus
National Center for
Biological Sciences
Jawaharlal Nehru Institute for
Advanced Scientific Research
Biochemistry, bioinformatics
and genetics
Molecular and chemical
biology and genetics
National Institute of
Immunology
Institute of Genomics &
Integrative Biology
International Centre for
Genetic Engineering and
Biotechnology
Centre for Cellular &
Molecular Biology
Centre for DNA
Fingerprinting & Diagnostics
Central Drug Research
Institute
Immunology
Genomics, genome informatics
and proteomics
Molecular biology and
biotechnology
Bioinformaticand genetics
Computational biology and
bioinformatics
Drug discovery and regulatory
studies
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
Weaknesses
• Poor all-round infrastructure is a major challenge
• Stringent price controls
• Lack of data protection
• Poor health insurance coverage
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
Threats
• Labour shortage
• Wage inflation
• Government expanding the umbrella of the
Drugs Price Control Order (DPCO)
• Considerable counterfeiting threat
• Competition from other emerging economies
Increased
investments
& MNC activity
• Shift towards a
networked
business mode
Increasing M&A
and alliances
Consolidation in
the market
•
•
Increasing
reach in
non-metro markets
Goods and
Service Tax (GST)
Growing
insurance
Changing
disease profile
Goods and
Service Tax (GST
• Seen as the next
volume driver,
though costs of
operation is
high due to
poor health
infrastructure
• Though delayed
from its April
2010 implemen-tation
date, GST
will add
significant
efficiencies to
economy and
lead to an
overhaul
of supply chain
• More numbers of
patients will be
coming in for
treatment
• Shift towards
biotech &
speciality
therapies,
increased
investment in
R&D and acute
disease segment
will sustain strong
growth
• Use of
technology & IT
for innovation in
healthcare
delivery e.g.
Mobile clinics
113

• India’s population of 1.2 billion
projected to rise to 1.6 billion by 2050
Increasing middle class population
rapidly acquiring purchasing power
n e c e s s a r y t o a f f o r d q u a l i t y
healthcare
Anticipated Growth in healthcare
spending as a percentage total
income (figure below)
5
GROWTH DRIVERS
Grow th in key segments
Generic Drugs
OTC Drugs
15%
10%
5%
13%
4%
4
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
•
•
• Patent regime suppor ting low cost
manufacturing of generic drugs
A robust OTC segment growth likely in view of
liberalization of OTC sales (schedule K), and
encouragement of prescription to OTC
switches
Patent drug segment to remain relatively
modest, however larger local firms
anticipated to augment investment into R&D,
supporting patent drug growth
•
•
15% 16% 17% 18% 19%
Patent Drugs
Government’s plan of augmenting
public expenditure on health to
2.5% of GDP from current level of
Increasing penetration of healthcare
insurance
Development of healthcare
infrastructure on PPP mode
Resolution of data exclusivity laws to
increase investor confidence
1 Change in spending pattern 2
0%
1995 2005 2015 2025
3
6
Growth
Drivers
114

GUJARAT – THE PHARMACEUTICAL HUB
• Gujarat has a well established base of
over 1,100 formulation units and about
400 bulk drug manufacturing units
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
•
•
•
105 year old
industry
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
Source:Pharmexcil, IDMA, FDCA
14% units contributing
30% to India’s Pharma
sector turnover
115

EMERGING BIOTECHNOLOGY HUB
Intas
1400
1200
1000
800
600
400
200
Biopharma
Synchron
Alembic
• 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
e n z y m e s b i o i n f o r m a t i c s ,
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
0
Vibrant Gujarat – MoUs signed
in Biotechnology sector (USD
2003 2005 2007 2009 2011
Major Alliances with Foreign
partners
Zydus
Altana
Biogen
and
Reliance
Life sciences
GenMedix
Virionics
Corporation
Parexel
Innovance
and
UCB
Source:www.vibrantgujarat.com
116

PHARMA, BIOTECH INFRASTRUCTURE – CLUSTER/SEZ/IR
Mehsana Biotech Park
J B Chemicals SEZ
Location: Bharuch
Area: 130 hectare
Likely activities: Bulk drugs,
Intermediates, R & D and
Contract manufacturing
Savli Biotech Park
Jamnagar Biotech Park
Pharmaceuticals identified as a potential sector
in 3 SIRs –
Viramgam, Changodar and Okha
Ankleshwar cluster
Manufacturing Base:
• APIs
• Formulations
• Vaccines Bharuch and Vapi/Valsad cluster
Manufacturing Base:
• Formulations
• APIs
Vadodara cluster
Manufacturing Base:
• Formulations
• Biogenerics
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
Jubilant PHARMA SEZ
Location: Bharuch
Area: 200 hectare
Likely activities: Manufacturing
hub for pharmaceuticals, fine &
specialty chemicals outsourcing
Dishman PHARMA SEZ
Location: Ahmedabad
Area:139 hectare
Likely Activities: Bulk drugs
117

ACADEMIC INFRASTRUCTURE - PHARMACEUTICALS
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
• 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
•
•
•
•
8000
7000
6000
5000
4000
3000
2000
1000
• Navsari •
Agriculture
University
• 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
• 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
•
•
•
•
•
•
•
•
•
•
•
0
2007-08 2008-09 2009-10 2010-11
Source:Gujarat Socio-economic review 2011-12
118
No. of seats (full time) Pharmacy degree
3705
6758

ACADEMIC INFRASTRUCTURE - BIOTECHNOLOGY
Rajkot
Ahmedabad
Junagadh Bhavnagar
Anand
Navsari
Banaskantha
Gandhinagar
Vadodara
• 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
•
•
• 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
Development) Center
• Nirma Institute of Pharmacy
• Center for Salt & Marine Chemical
Research Institute (CSMCRI)
• Department of Marine Sciences,
Bhavnagar University
• 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
• Cancer Research Institute, Ahmedabad
• Genetics center, Ahmedabad
• 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
Agro Biotech
Pharma Biotech
Marine Biotech
Environment
Biotech
Medical Biotech
Biotech
Engineering
Bioinformatics
National Institute of Pharmaceutical
Education and Research (NIPER)
119

PRESENCE ACROSS VALUE CHAIN - PHARMACEUTICALS
Research and Development Manufacturing
Education / Research
Institutes
Research
&
Development
Marketing and Exports
Contract Research Organisations
• 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
•
• Claris Life sciences Ltd.
• Cadila Pharmaceuticals Ltd.
• Intas Pharmaceutical Ltd.
• Sun Pharma
Zydus Cadila Healthcare Ltd. •
Torrent Pharmaceuticals Ltd.
• Dishman Pharmaceuticals
• Abott Laboratories
• Wyeth
• Jubilant Organosys
•
• Quintiles
• Synchron
• B A Research
Lambda Therapeutics
Manufacturing
Formulation Packaging
Sales
&
Marketing
Clinical
Development
Phase I/II/III
Phase IV
trials
Research
Biology
Design of
Molecule
Pre-clinical
Development
API
manu-facturing
120

PRESENCE ACROSS VALUE CHAIN - BIOTECHNOLOGY
Basic
Research
Drug
Discovery
Integration
and Product
development
Manufacturing
Transportation
Logistics
Marketing
and Sales
Services
Business Areas
• Agriculture biotechnology
•
Microbiology
•
Biochemistry
•
Genetic engineering
•
Plant tissue culture
•
Plant & Animal science
•
Pharma technology
•
Industrial
biotechnology
• Clinical research
Industrial testing
Sea water, Marine algae
Environmental
Agriculture
Medicinal and aromatic plants
Blood collection and testing
Healthcare
•
•
•
•
•
•
•
R & D
Marketing
Services
Education Research
Areas
Agriculture
Bioinformatics
Pharmaceutical
Marine
Industrial
Manufacturing
Biotechnology
Crop
protection Seeds
Growth
stimulator
Sector Areas
Preventive
medicines
Diagnostics Biopharma
therapeutics
Nutraceuticals
Phyto pharmaceuticals Vaccines
121

MAJOR PLAYERS IN GUJARAT
Ahmedabad
Ankleshwar
Vadodara
Rajkot Surat
122

4.5.2
123

Gujarat aspires to become a beacon of comprehensive social and economic development.
Incentives
Various Sector
specific
Subsidy on
electricity
duty Up gradation
of industrial
estates
HR/Labour
Labour law
flexibility
Industry-academia
collaboration
support for
development
of specialized
institutes
Business
Environment
Single window
clearance
Marketing support
Grievance
redressal
Information
centers
Infrastructure
Support for
Urban
Physical
Industrial
Thrust Sectors
Manufacturing
Services
Infrastructure
Regional Focus
FDI/NRI
Industrial Policy 2009
124

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
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
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)
Biotechnology
Institution
Gujarat State Biotechnology Mission
(GSBTM) has been constituted to
encourage new entrepreneurs into
biotech and attract investments
in the State
Incentives
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)
Policy
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
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
Establishment of National
Institute for Pharmaceutical
Education and Research
(NIPER) for Human
resource development
Incentives to encourage R&D
in the sector in terms of
various tax benefits
Establishment of Gujarat
Genomics Initiative, Genetic
Diagnostic centers and
Gene Banks
I.T. application for issuance of
manufacturing license, sales
license and product license
implemented by FDCA
For quick disposal of various
documents like CoPP, NCC and
FSC, FDCA has started the
process of I.T. application
Establishment of
Center of Excellence for
Clinical Research
Establishment of Center
of Excellence for various
sectors of biotechnology
128

4.5.3
129

OPPORTUNITIES
• 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
Manufacturing
Services
R&D
Source: Industries Commissionerate
130

OVERVIEW
4.6.1
Source: Industries Commissionerate
132

GLOBAL SCENARIO
INDIA WILL CONTINUE TO BE A KEY MARKET GLOBALLY
• 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
• 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
Source: GJEPC, WGC, GFMS, CARE, CRISIL
Market Size (USD billion)
250
200
150
100
50
0
185
230
2010
2015
CAGR
4.45%
133

Gujarat Manufacturing Sector Profile Focusing on Engineering, Textiles, Auto, Chemicals & Pharma

Gujarat Manufacturing Sector Profile Focusing on Engineering, Textiles, Auto, Chemicals & Pharma

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