by Lenin Samuel
The expansion of world merchandise trade is decelerating sharply,” a headline from a 2013 U.N report on economy captures the gloomy state of affairs regarding International trade. Against such an inertia afflicted background, Gujarat's international trade has shifted gears and shown strong growth. Confidence runs high in Gujarat on the State's potential to revolutionise how exports are done in the country so much so, that during the Vibrant Gujarat Summit one of the most impactful slogan was “Made in Gujarat”, coined by the Chief Minister to encourage and motivate exporters to create a distinct brand for Gujarat in the international market.
The State has the potential to truly lead the country in trade. Post the global economic slump, India has taken steps to incentivise and boost International trade. Gujarat, a leader in exports, has taken upon itself to play a vital role in what would soon be seen as the nation's rejuvenated effort to engage the world.
Gujarat is now on its way to make history by creating the nation's first State Export Policy. In today's age of extreme international competitiveness, Gujarat has set on a path of efficient and focused management.
Be it pharma, where in the year 2012-13, exports of worth Rs 15,000 crores were made, a major surge of 8-9% from the previous year or in the manufacturing sector, where the State export is a stunning 80% of its production.
Gujarat is poised to tackle the extremely competitive environment head on. With its fundamentals, Gujarat has the potential to increase its exports even during adverse times. FIEO, during the Vibrant Gujarat 2013, released a report titled, “Export Competitiveness of Gujarat: Vision 2020, which predicts that by 2020 the State will attain exports worth 400 billion dollars.”
The same reports maintain that by 2020, Gujarat will be able to raise its current share in the country's exports pegged at 24 % to an enviable position of 35%. Gujarat's positivity is of great importance to the nation post the global economic slowdown. The Indian Government had given directives to states to incentivise and promote trade. Gujarat, a leader in exports, has taken upon itself to play a vital role in what would soon be seen as the nation's rejuvenated effort to engage the world.
How is Gujarat poised to play a major role?
Gujarat is ranked first in respect of merchandise exports as per the Economic Survey 2011-12. Always a leader, it has moved to set up world- class infrastructure to ease and encourage trade. Gujarat's efforts in creating huge sized Special Investment Regions (SIR's) along the upcoming Dedicated Freight Corridor between Delhi and Mumbai for Rail connectivity and the Delhi-Mumbai Industrial Corridor (DMIC) have further expanded the State's capacity and potential in growing into a dynamic hub for trade and business.
Policies play a vital role in promoting trade; they also create transparency and a sense of clarity. Today, Gujarat is the only state in India where the State Government has framed policies in almost all key sectors such as Industry, power, ports, road, IT, agriculture, minerals and tourism. Gujarat's Industrial Policy of 2009 is one such trademark policy.
Exports require the presence of highly dynamic and effective means of logistics; here Gujarat's Ports play an indispensable role. The state is a leading maritime state with over 41 ports; these ports provide access to North Indian States that constitutes about 25% of India's GDP. In the year 2011-12 alone Gujarat's Intermediate and minor ports handled a total cargo of 370 Million tonnes. Gujarat has a special Port policy formulated to promote private sector investment in development of Ports and related infrastructure.
Power and Fuel are two essential factors necessary for smooth operations. Gujarat is known all across the nation as a power surplus state and as one of the first State to implement power sector reforms and to restructure power sector losses to wipe out losses.
The State has also emerged as the “Petro Capital” of India. The State is laying a 2200km long high pressure Gas Grid to facilitate gas transmission and distribution. This gas will be supplied to medium and small industries to further bring down operating cost. Two Liquefied Natural Gas (LNG) terminals have been built at Dahez and Hazira and two more are to built at Pipavav in Saurashtra and Mundra in Kutch.
Logistics and Connectivity are indispensable. Inland Container Depots (ICD) aids in cargo distribution. Ahmedabad ICD has emerged as one of the largest in the country in terms of cargo handling. It is the largest in the western region and fourth largest in the country. Upcoming ICD's like the one at Khodiyar in Gandhinagar is equipped with State of the art technology. ICD Khodiyar has the capacity to handle over 3 lakh TEU's (Twenty feet equivalent units) of container cargo per year.
Roads, rail and air connectivity is one of the best in the country. Gujarat has one of the highest networks of surfaced roads- over 95% compared to India's 57%. The total length of railway lines in the state is almost 5,200 km. The State also has an extensive network of airports and aircrafts scattered throughout the state. At present there are eight airports in the state, managed by the Airport Authority of India (AAI) and 11 new airports are in plan.
Gujarat takes the markets to storm in four robust sectors
Textiles: Gujarat's textile sector has been exploring newer subsectors like technical textile sector. It is contributing over 25% to the Rs 75000 crore (2011-12) technical textiles sector of India. This sector is expected to grow to Rs. 1 lakh crore by 2012-13 at all India level spurred by the huge growth or growing requirement in automotive applications, medical textiles, geo-textiles, agro-textiles used for crop protection and protective clothing for fire fighters, bullet-proof jackets and space suits.
Under traditional textiles, about 250 large fabric process houses are located in Ahmedabad and 350 in Surat, with the latter being the largest centre of art silk fabric producing over 40% of production in the country.
Gems and Jewellery: Gujarat accounts for over 70% of total Gems and Jewellery exports of India. Almost 80% of cutting and polishing of diamonds is done in Gujarat and 90% of total diamonds in Gujarat are processed by about 10,000 diamond units located in and around Surat. Diamond processing and trading units are spread across the state and Jewellery sector is expected to grow at a rate of 15%.
Plastics/Chemical/Petrochemical sector: Gujarat's chemicals and petrochemicals industry offers a wide spectrum of opportunities for the investors both from India and abroad. Gujarat is known as the 'Petro Capital' of India. The State contributes 62% of country's petrochemicals production and 51% of country's chemicals production. Gujarat contributes 15% of the total national chemical exports. Further, the State Government is developing the Petroleum, Chemicals and Petrochemicals Integrated Region (PCPIR) at Dahej to attract more opportunities in the sector.
Mines and Minerals: Gujarat has one of the highest reserves of lignite, limestone, perlite, and clay deposits in India. Its strength in non-minerals, offers the best prospects for exploitation. Gujarat is the only producer of minerals such as Agate and Chalk in the Country.
Gujarat is reputed to be one of the prime bauxite bearing areas with 4.6% of the country's total reserves, producing significant quantity of bauxite of chemical, refractory and abrasive grades. The State possesses one of the highest reserves of lignite, limestone, perlite and clay deposits in India. It is the only producer of Agate and Chalk industry in the country. Also, the refractory grade bauxite is available only in Gujarat.
The article is originally published in The Gujarat (Magazine), Vol-III, Issue-4.