Why choose Gujarat and Rajasthan as India's investment destinations?
Gujarat has exceeded all other Indian states in attracting new investments from both domestic
and foreign firms, according to data from the Centre for Monitoring the Indian Economy
(CMIE). Gujarat has declared new investments totaling Rs 3.98 trillion for the fiscal year
(FY) 2022, a 273 percent increase over the FY 2021 number of Rs 2.91 trillion.
Rajasthan, on the other hand, ranked as India's second most appealing investment destination
in FY 2022. Surprisingly, the state experienced the highest rate of growth over time,
increasing by nearly 535 percent and drawing new investments worth Rs 2.37 trillion.
We will explore why these two states are India's top investment destinations.
Why is Gujarat an excellent investment destination?
In terms of manufacturing capacity, investment prospects, and functioning special
economic zones, Gujarat is India's leading industrial state.
Gujarat is the world's second-biggest producer of crude oil (onshore) and the fourth-
largest producer of natural gas, and the Jamnagar district is home to the world's
largest petroleum refining complex.
Gujarat's Gross State Domestic Product (GSDP), which reached USD260 billion in
FY 2022 and grew by 7% year on year (y-o-y), is expected to reach USD280 billion
in FY 2023.
In terms of logistics and connectivity, Gujarat has 42 ports, including one major port
and 41 non-major ports.
Gujarat, one of India's major industrialized states, is a suitable investment destination
due to its industrial and investment-friendly laws. DPIIT has named the state an
"Achiever" among coastal states in Logistics Ease (LEADS 2022).
In Gujarat, there are 21 functioning Special Economic Zones (SEZs), 26 of which
have formal approval, eight designated Special Investment Regions (SIRs), and 202
industrial derivatives.
Gujarat is India's chemical manufacturing leader. The state is home to India's first
Petroleum, Chemicals, and Petrochemicals Investment Region, which is dedicated to
the production of petroleum products, chemicals, and petrochemicals.
Gujarat also generates a substantial amount of renewable energy. The state's operating
capacity for producing electricity from wind energy sources is currently 8,561.8 MW,
up from 7,541.5 MW in FY 2020.
To draw in offshore financial market investors, Gujarat International Finance Tec-
City (GIFT City) has established India's first International Financial Services Centre
(IFSC).
Why is Rajasthan an excellent investment destination?
Rajasthan's strategic location is one of the key reasons for its popularity as an
investment destination. It borders five other key Indian states, including Punjab,
Haryana, Uttar Pradesh, Madhya Pradesh, and Gujarat. This state's bordering states
provide access to roughly 40% of the Indian market, and it also serves as a crucial
transit link between northern Indian states and ports on India's western coast.
Rajasthan is thus an attractive place for businesses wishing to increase their market
reach in India.
Another element that contributes to Rajasthan's attractiveness as an investment
destination is its skilled workforce, which has resulted in a big pool of skilled people
in a variety of fields. This is especially true for the service sector, which provided
almost 45 percent of the state's GVA at current prices in FY 2021.
Rajasthan, with 82 major and minor minerals, is also a major mineral-producing state
in India. The state produces more minerals than any other state in India, with the
leading commodities being limestone, copper ore, silver, rock phosphate, and
gypsum.
Agri-processing, automotive, IT/ITES, petrochemicals, renewable energy, and textiles
are among the prominent industries in the state. The state is home to more than 100
automobile and auto-component manufacturing plants, as well as around 850 food
processing factories.
The state's economic profile is similarly excellent, with its GSDP expected to reach
Rs 11.96 trillion in FY 2022, an increase of 11.06 percent year on year. At the time,
the state's per-capita income was Rs 1,35,000 per year. As a result of the state's
economic boom, corporations like Adani have increased their investment in the state.
Rajasthan received USD1.88 billion in FDI inflows from October 2019 to September
2022, according to Invest India data. This demonstrates international investors' rising
interest in the state and its possibilities for further economic expansion.
Presenter:
Gaurav Parewa
Invest India
