Best Business Opportunities in Gujarat - Identification and Selection of right Project, Thrust areas for Investment, Industry Startup and Entrepreneurship
Gas & Petroleum: Project Opportunities in Gujarat
The Oil Industry is a very important industry in the world and a lot depends on the price of the oil and it has been observed that whenever the oil prices increase the price of various products also increases. Oil and gas sector is one of the key catalysts in fuelling the growth of Indian economy. With a 1.2 billion population and an economy that has consistently at approximately 8 per cent annually, India's energy needs are increasing fast, warranting a robust demand for oil and natural gas in the country. India has emerged as the 5th largest refining country in the world, accounting for 4 per cent of the world's refining capacity. India exported 50 million tonnes (MT) of refined petroleum products during 2010-11. With our refining capacity increasing further, this figure is likely to touch about 70 MT by 2014, making India one of the world major exporters of petroleum products.
Gujarat State is rich in the hydrocarbon resources and is the largest on land producer of oil and gas in country. Gujarat contributes about 18% of country’s total crude oil production. Similarly it contributes about 11% of country’s total gas production. If we compare on land crude production then it is almost 50% of crude and 40% of natural gas from the Gujarat State. Gujarat State Petroleum Corporation Ltd (GSPC) is an oil and gas exploration company in Gujarat, India. It is India's only State Government-owned oil and Gas Company with the Government of Gujarat holding approximately 95% equity stake. GSPC was incorporated in 1979 as a petrochemical company. Today GSPC has become a vertically integrated energy company, excelling in a wide gamut of hydrocarbon activities across India. The largest gas grid will generate opportunities for transmission and distribution of natural gas to domestic and industrial users. Three LNG terminals coming up in the state will provide the fuel for growth. Refineries and petrochemical complexes in operation, invites investment in downstream projects.
The oil ministry has empowered state-run exploration firms ONGC and Oil India to choose customers for gas produced from small fields where output is less than 0.1 million standard cubic meters per day, which would reduce bureaucratic delays and help companies generate revenue expeditiously. Oil India Limited (OIL), a Government of India Enterprise, under the administrative set-up of Ministry of Petroleum and Natural Gas, is engaged in the business of exploration, production and transportation of crude oil and natural gas. The growing demand for crude oil and gas in the country and policy initiative of Government of India towards increased E&P activity, have given a great impetus to the Indian E&P industry raising hopes of increased exploration. The government in order to increase exploration activity approved the New Exploration Licensing Policy (NELP) in March 1997 which would level the playing field in the upstream sector between private and public sector companies in all fiscal, financial and contractual matters. There will be no mandatory state participation through ONGC/OIL nor there did any carry interest of the government. In order to increase the exploration and thereby enhance the production of oil and gas in the country the Government of India liberalized the hydrocarbon sector. With the announcement of the liberalization policy in the hydrocarbon sector by Govt. of India for the oil and gas. Pursuant to the signing of PSC many private Exploration and producing Companies started the petroleum operations in the State and thereby the activities in the hydrocarbon sector have increased. In order to cope up with the increasing activities Government of Gujarat created the Office of Directorate of Petroleum to monitor various activities of exploration and exploitation of oil and gas, their production and royalty paid thereon by various organizations in the State of Gujarat. Gujarat State Petroleum Corporation Ltd (GSPC) is an oil and gas exploration company in Gujarat, India. It is India's only State Government-owned Oil and Gas Company with the Government of Gujarat holding approximately 95% equity stake. Today GSPC has become a vertically integrated energy company, excelling in a wide gamut of hydrocarbon activities across India.
MINING & MINERALS:Project Opportunities in Gujarat
Minerals are valuable natural resources being finite and non-renewable. They constitute the vital raw materials for many basic industries and are a major resource for development. Management of mineral resources has, therefore, to be closely integrated with the overall strategy of development; and exploitation of minerals is to be guided by long-term national goals and perspectives. Ministry of Mines is responsible for survey and exploration of all minerals, other than natural gases, petroleum and atomic minerals, for mining and metallurgy of non-ferrous metals like aluminium, copper, zinc, lead, gold, nickel, etc. and for administration of the Mines and Minerals (Regulation and Development) Act, 1957 in respect of all mines and minerals other than coal, natural gas and petroleum.
Gujarat is the ideal state for the investment in mineral based industries looking to the state mineral resources and infrastructural facilities. There is ample opportunity to establish mineral oriented industries like Limestone based cement and soda ash industry, Lignite based power plants, Bauxite-based Alumina plant, Marble & Granite based cutting, polishing plants, Clay based ceramic units, Silica sand based glass units. GNMRL is well placed to take benefit of imminent boom staring at the energy spectrum. GNMRL is unique in itself which focus in coal mining, met coke productions as well as Oil and Gas exploration, the three prime resources which are in great demand. Total area of the State of Gujarat is 1,96,024 sq.kms. Out of which 1,27,000 sq. kms is rocky, which is mineral probable area. About 57,970 sq. kms of these rocky areas have been covered under the Remote Sensing Survey / Pre-detailed Mineral Survey, and about 23,596 sq. kms, under the Detailed Mineral Survey. Till now total 3,63,534 meters of drilling has been completed for various minerals at different places in the state. Out of this, 3,13,613 meters of drilling was conducted by the department, and the remaining 49,921 meters of drilling, by expeditious drilling programme by hiring men & machines. Remaining uncovered area of 69,030 sq. kms will be covered in the next five years by remote sensing / pre-detailed mineral surveys. Total 12,030 sq. kms will be explored by the department, and 57,000 sq. kms, through outsourcing/ private participation.
The Government of Gujarat has envisaged specific policy initiatives for industrial minerals occurring in the state to attract investment in the fields mineral exploration, exploitation, and mineral-based industries. It is intended to create competitive environment to speed up industrial development in mineral potential area by enhancement of Human Resource capabilities, improvement in infrastructure & adopting modern technology. The approach is to make progress by increasing mineral production and export of value added material through local and global competitiveness. Efforts to develop with special attention to minerals which are only available in the Gujarat as compared to other states in the country and mineral occurring in few states & having high quality. Local employment is created through mineral exploitation while maintaining mine safety & striking ecological equilibrium is also an additional addendum of this policy. To regulate the minor minerals, State Government has framed Gujarat Minor Mineral Rules-1966 under the Section-15 of Mines and Minerals (Regulation and Development) Act- 1957 and Central Government has framed Granite Conservation and Development Rules-1999 and Marble Development and Conservation Rules-2000. In addition, mines are being regulated under other Acts and Rules of Central Government such as Mines Act-1952, Mines Rules-1955, Mineral Conservation and Development Rules-1988. In the major minerals (including Oil & Natural Gas), Gujarat is placed at 3 position as on March-2002 in Mineral Production value. Gujarat ranks second in working mining leases. Only Gujarat produces minerals like Agate, Chalk and Perlite in the country. Production wise Gujarat ranks first in Fluorite and Silica sand, second in Bauxite, Lignite, Fire clay and Clay (others) and third in Quartz and Ball clay and fourth in Limestone and China clay.
Agro and Food Processing: Project Opportunities in Gujarat
Agro Industry means a unit which adds value to agricultural products/intermediates/residues; both food and non-food; by processing into products which are marketable or usable or edible, or by improving storability, or by providing the link from farm to the market or a part thereof. The term “agro-food processing industries” covers a wide range of activities utilizing farm, animal and forestry based products as raw materials. Agriculture sector contributes one-fourth of the country’s GDP. India is the largest producer of milk, fruits, pulses, cashew nuts, coconuts and tea in world and accounts for 10 % of the world fruit production. India’s food grain production is expected to rise to 208.5 million tons by March 2006, from 204.6 million tons in 2005. Horticulture sector contributes 30 % of the agriculture GDP and accounts for 8.5 % of cultivated area. In the Global food processing industry Asia-pacific is accounting for 31.10 % of global market. India is the World’s second largest producer of food, next to China and has potential to be number one.
Gujarat is endowed with abundant natural resources in terms of varied soil, climatic conditions and diversified cropping pattern suitable for agricultural activities. Gujarat is a leading producer of various agricultural crops within India as well as worldwide. Gujarat has highest production in the world for Castor (67%), Fennel (67%), Cumin (36%), Isabgol (35%), groundnut (8%), and Guar seed (6%). The state has also emerged as a frontrunner in several other sectors such as Dairy, Fisheries, Animal Husbandry, Traditional Horticulture and Floriculture. Gujarat is keen to promote the agro-processing industry, which currently consists of small and medium enterprises producing a wide variety of products. It has about 16,400 small enterprises in food processing, beverage and tobacco processing. The agro-processing sector accounts for a significant proportion of the working population in the State. Moreover, the State is well known for its success in dairy cooperatives. Gujarat Cooperative Milk Marketing Federation enjoys a significant market share in the processed foods sector.
The Gujarat Agro Vision 2010 has been formulated with defined growth parameters of gross state domestic product, per capita income and increase in non farm income of rural population due to multiplier effect. A holistic approach has been envisaged with emphasis on agricultural research, conservation of soil and water, economic and social sustainability. A comprehensive Agro Industrial Policy 2000 has been formulated. Tiny, small, medium and large agro industrial units shall be given 6% back ended subsidy for 5 years on the interest on term loan, subject to a ceiling of Rs. 100 lacs. Gujarat government has announced a new Agri Business Policy during the summit 2009. Gujarat government has offered various incentives to attract the investment in agriculture and allied sectors. Some of the incentives include declaration of food processing industry as seasonal industry, cost subsidy to large projects in food processing sector and sops and incentives to enhance competitiveness of small and medium enterprises, etc.
SALT INDUSTRY:Project Opportunities in Gujarat
India is the third largest Salt producing Country in the World after China and USA with Global annual production being about 230 million tonnes. The growth and achievement of Salt Industry over the last 60 years has been spectacular. When India attained Independence in 1947, salt was being imported from the United Kingdom & Adens to meet its domestic requirement. But today it has not only achieved self-sufficiency in production of salt to meet its domestic requirement but also in a position of exporting surplus salt to foreign countries. The production of salt during 1947 was 1.9 million tonnes which has increased tenfold to record 20 million tonnes during 2005. The main sources of salt in India are sea brine, lake brine, sub-soil brine and rock salt deposits. Sea water is an inexhaustible source of salt. Salt production along the coast is limited by weather and soil conditions.
Gujarat is blessed with the longest coastline of 1600 km. in India, offering important resources such as salt and marine products for industry. Gujarat is the largest producers of salt in India and ranking 2nd highest export in the world. Gujarat contributes 76 percent to the total production, followed by Tamil Nadu (12 %) and Rajasthan (8%). It also became the highest tax charging state for salt production amongst the six other salt producing states. Apart from using salt for edible purposes, it is substantially used for production of inorganic chemicals.
Salt is a Central subject in the Constitution of India and appears as item No.58 of the Union List of the 7th Schedule, which reads:
a) Manufacture, Supply and Distribution of Salt by Union Agencies; and
b) Regulation and control of manufacture, supply and distribution of salt by other agencies.
Central Government is responsible for controlling all aspects of the Salt Industry. Salt Commissioner’s Organisation plays a facilitating role in overall growth and development of Salt Industry in the country. The thrust of the Salt Commissioner’s Organisation currently is on Technological Development and Quality Improvement, Salt Iodisation Program for combating Iodine Deficiency Disorders, Infrastructure Development promoting Salt Industry, Labour Welfare Schemes for Salt Workers particularly housing under Namak Mazdoor Awas Yojna and export of Salt.
GEMS AND JEWELLERY:Project Opportunities in Gujarat
Gems and jewellery industry in India occupies a significant position in the Indian economy. It is also one of the fastest growing Industries in the country. The cutting and polishing of Diamonds and precious stones is one of the oldest traditions in India and the country has earned considerable goodwill, both, in the domestic and international markets for its skills and creativity. India was also the first country to have introduced diamonds to the world. The country was the first to mine diamonds, cut and polish them and also trade them. It accounted for 16.7 per cent of India's total Merchandise Exports. At present India exports 95% of the world’s diamonds.
Gujarat is the leading state in India in gems and jewellery sector, as it contributes to about 72% of the total exports of India. Gujarat has a well established diamond industry. Diamond processing and trading unit are spread across the State in cities such as Surat, Ahmedabad, Palanpur, Bhavnagar, Valsad and Navsari. Gujarat accounts for about 80% of diamonds processed and 95% of diamonds export from India. Surat has 65% share in India's diamond trade. Highly skilled workforce Gujarat’s comparatively cheaper and skilledworkforce can be effectively utilized to setup large low cost production bases for domestic and export markets. Gujarat’s Gems & Jewellery sector is expected to grow at a rate of 15%.
The government's interest in the sector is evident from the FDI policy which allows 100% FDI and 74% in exploration and mining of diamonds and precious stones and 100% for gold and silver and minerals exploration, mining, metallurgy and processing. Gems and Jewellery, diamonds and precious metals have been given a special thrust by the Ministry of Commerce & Industry, Government of India, under the Foreign Trade Policy through the following measures:
· Allowing 100 per cent FDI in the gems and jewellery sector under the automatic route;
· Abolishing duty on polished diamonds;
· Lowering import duty on platinum and exempting rough, coloured, precious gems stones from customs duty. Rough, semi –precious stones are also exempted from import duty;
· Setting up of Gems and Jewellery Parks and SEZs to stimulate sectoral investments;
· Allowing import of gold of 8 k and above under replenishment scheme, subject to the condition that import being accompanied by an Assay Certificate specifying purity, weight and alloy content;
· Permitting import of Diamondson consignment basis for Certification /Grading, and re-export by the authorized offices/agencies of Gemological Institute of America (GIA) in India or other approved agencies.
CHEMICALS AND PETROCHEMICALS: Project Opportunities in Gujarat
The Chemical and Petrochemical Industry occupies an important place in the country's economy, as the Chemical industry has grown at a pace outperforming the overall growth of the industry. Chemical industry is an important constituent of the Indian economy. Its size is estimated at around US$ 35 billion approx., which is equivalent to about 3% of India's GDP. The total investment in Indian Chemical Sector is approx. US$ 60 billion and total employment generated is about 1 million. Today, petrochemical products permeate the entire spectrum of daily useitems and cover almost every sphere of life like clothing, housing, construction, furniture, automobiles, household items, agriculture, horticulture, irrigation, packaging, medical appliances, electronics and electrical etc. Chemicals and Petrochemicals contribute to more than 62 % of national petrochemicals and 51% of national Chemical sector output. It leads all states in India in terms of the investments committed in the chemical and petrochemical sector, 30% of fixed capital investment is in the manufacturing of Chemical and Chemical Products. Manufacturing of chemicals and chemical products contribute to around one fifth of the total employment in state. The production capacity of major suppliers of polymers, PE/PP/PVC in Gujarat is nearly 70% of the whole country’s production. Large quantity of production of basic chemicals caustic soda, caustic potash and chloromethane, largest supplier of bio fertilizers, seeds, Urea and other fertilizers
Gujarat's chemicals and petrochemicals industry is one of the fastest growing sectors in the State's economy. The industry offers a wide spectrum of opportunities for the investors both from India and abroad. The well diversified chemical industry has complete portfolio of chemical products including petrochemicals and downstream products, pharmaceuticals, dyes and intermediates. The Chemical Industry in Gujarat comprises of about 500 large and medium scale industrial units, about 16,000 of small scale industrial units and other factory sector units. Gujarat emerged as leading Indian states in terms of the investments committed in the chemical and petrochemical sector. It contributes to more than 62% of national petrochemical and 51% of national chemical sector output. Around 6,000 chemical and petrochemicals products are produced in the state. Manufacturing of chemicals and chemical products contributes to around one fifth of the total employment in state. The chemical industry in Gujarat is a significant component of the State's economy, contributing to more than 51% of Indian production of major chemicals with revenues at approximately more than INR 12,000 crore. Petrochemical Industry in Gujarat produces 13,048 ('000 Tonnes) of petrochemical products and also contributes around 62% to the total production of the country. Gujarat contributes 15% of the total national chemical exports.
In Chemical sector, 100% FDI is permissible, manufacture of most chemical products inter-alia covering organic/inorganic, dyestuffs and pesticides is de licensed. The entrepreneurs need to submit only IEM with the Department of Industrial Policy and Promotion provided no locational angle is applicable. Only the following items are covered in the compulsory licensing list because of their hazardous nature: Hydrocyanic acid and its derivatives, Phosgene and its derivatives,Isocynates and di-isocynates of hydrocarbons.
TEXTILES:Project Opportunities in Gujarat
The textile industry is primarily concerned with the production of yarn, and cloth and the subsequent design or manufacture of clothing and their distribution. The raw material may be natural or synthetic using products of the chemical industry. India Textile Industry is one of the leading textile industries in the world. Though was predominantly unorganized industry even a few years back, but the scenario started changing after the economic liberalization of Indian economy in 1991. The opening up of economy gave the much-needed thrust to the Indian textile industry, which has now successfully become one of the largest in the world.
Gujarat is one of the leading industrial states in India and textile industry in particular had contributed in a big way to the industrialisation of the State. In fact, development of many industries likes, Dyestuff, Chemicals, Engineering/Foundry and Cotton farming is solely dependent on this sector. The State is well known for development of Hybrid Cotton, Ginning, power looms, composite mills, spinning units and independent processing Houses. Gujarat being the largest producer of cotton, has obtained tremendous opportunities towards higher and higher value addition product by setting up Modern Process Houses (with the technology of low polluting and less energy costs) in one hand and Knitwear/Ready-made Garments in a big way on the other to fulfil the domestic and international market. Investment opportunities may be, therefore, explored for Cotton Ring Spinning (25,000 spindles), Open End Spinning (1000 rotors), Modern Process House, Shuttleless Weaving (50 looms), Ready-made garments unit and Non-woven and Technical Textile unit with appropriate technology. Bandhani or Bandhej of Gujarat is one of the best tie and dye fabrics in India. Dhamadka and Ajrakh, Mashru are some of the other fabrics of Gujarat. Dhamadka is the art of printing fabrics with wooden blocks. Mashru is a mixed fabric, woven with a combination of cotton and silk. It was originally used by Muslim men, as they were prohibited from wearing pure silk.
The Gujarat government is planning to come up with a policy to boost the textile and apparel industry in the state and help it remain competitive in the post-quota regime of the World Trade Organisation. Gujarat’s textile policy provides incentives that are more favourable for large textile units. It provides 25% capital subsidy on purchase of machineries. Custom duty on textile machinery is only 5%. Also, various human resource development activities for the textile industry have been initiated by state government. Subsidy at 50% of R&D expenditure is provided to industries carrying out research. Interest subsidy at 3% is provided for capital equipment for five years. Assistance is also provided for infrastructural development, market promotion and environment protection. Gujarat is also the largest producer and exporter of cotton, the production of which has been increasing over time. So raw material is plentiful. It is the largest producer of denim. Surat is a strong base for synthetic fibers and provides a big market.
Waste management: Project Opportunities in Gujarat
Waste utilization, recycling and reuse plays a major role in limiting resource consumption and the environmental impact of waste. Recycling is an integral part of any waste management system as it represents a key utilization alternative to reuse and energy recovery (Waste-to-Energy). Which option is ultimately chosen depends on the quality, purity and the market situation. Hazardous waste management is a new concept for most of the Asian countries including India. The lack of technical and financial resources and the regulatory control for the management of hazardous wastes in the past had led to the unscientific disposal of hazardous wastes in India, which posed serious risks to human, animal and plant life.
Gujarat is an ideal location for an effective functioning of the projects, which depend on reasonable volume of generated wastes, waste characteristics, public acceptance and potential network of the industry for the zero discharge of the waste. Gujarat is characterized by wide spread industrial establishments, robust infrastructure development and stable socio-political environment. The industrial development has remained and is the robust backbone of Gujarat’s economical and industrial prospects and a driving force of a future economic growth. In a meantime, the rapid industrial development throughout the state has lead resulted in generating abundant industrial wastes which need proper care in pollution mitigation and recycling in and around urban centres of Ahmedabad, Bharuch, Surat etc.
National policy on waste management is set out in the October 1998 policy statement on waste management - Changing our Ways. It outlines the Government's policy objectives in relation to waste management, and suggests some key issues and considerations that must be addressed to achieve these objectives. The policy is firmly grounded in an internationally recognised hierarchy of options, namely prevention, minimisation, reuse/recycling, and the environmentally sustainable disposal of waste which cannot be prevented or recovered.
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