By Ashok Bhattacharjee/ Bloomberg
Ahmedabad: Gujarat, home to the world’s third-largest refinery, is wooing companies such as ITT Corp. and PSA International Pte to attract as much as $130 billion (Rs5,74,697 crore) of investment into public works and other infrastructure.
The majority of the projects, expected to be completed in the next four or five years, will involve ventures between local companies and overseas partners, Pankaj Patel, chairman, Cadila Healthcare and head of the local industry lobby group, said on 10 March. Power, ports and computers are expected to account for most of the committed investments.
“While the national average rate of realizations from overseas commitments is at best 20%, ours is as high as 80%,” chief minister Narendra Modi said. “We are interested in integrated development of the state.”
Modi, facing an election this year to the local assembly, wants to use development and promised capital flows to the state against the opposition Congress.
Investments by White Plains, New York-based ITT, the world’s biggest maker of industrial pumps, Singapore’s PSA, the world’s second-largest container port operator, or Melbourne- based Mayne Pharma Ltd, Australia’s biggest maker of generic injectable drugs, will help to enhance the region’s credibility to investors abroad.
Although Gujarat lags behind Mumbai and New Delhi in attracting foreign direct investment, the state uses its port, roads and power infrastructure to draw investments from local companies such as Reliance Industries, India’s biggest, and Petronet LNG Ltd. At 1,600 km, the Gujarat coastline is the longest of India’s nine seaside states and is dotted with 41 ports to handle liquefied natural gas, crude oil and dry-bulk shipments.
The state, where power utilities in key cities such as the diamond-cutting centre of Surat and textiles hub of Ahmedabad are privately run, had 72% of its rural homes connected to the electricity grid, compared with 19% for Orissa, where South Korea’s Posco plans to spend $12 billion to make steel, and 43.5% for the entire country, as per data compiled by India’s federal power ministry.
“Gujarat is perhaps the only manufacturing base in India that has the entire value chain from raw materials to finished products,” Patel said.
Home to the local plant of General Motors Corp., Gujarat is home to 5% of India’s 1.1 billion people, while the state accounts for 21% of exports and 13% of the South Asian nation’s factory output, according to Gujarat’s Industrial Extension Bureau.