vibrant gujarat summit on manufacturing sector

Vibrant Gujarat

Manufacturing: Sector Profile

Gandhinagar

Table of ContentsTable of Contents

1. India-Preferred Investment Destination

2. Gujarat-Preferred Investment Destination

3 Gujarat-Manufacturing Sector3. Gujarat Manufacturing Sector

3.1 Textile Sector

3.2 Engineering Sectorg g

3.3 Automobile and Auto Ancillaries

3.4 Chemical Sector

3.5 Gems and Jewellery

3 6 Pharmaceutical Sector3.6 Pharmaceutical Sector

3.7 Electronics & System Design

3. Gujarat-Manufacturing Sector

Gujarat-Manufacturing Industry Overview

Banaskantha

SabarkanthaPatan

Mehsana

The manufacturing industry of Gujarat can be categorized in following industries.

Kutch

SurendranagarAhmedabad

Gandhinagar

SabarkanthaMehsana

Panchmahal

N di d

KhedaTextile and TextilePharmaceutical

Jamnagar

Porbandar

A li

BhavnagarRajkot

Vadodara

Bharuch

AnandNadiadTextile

Machinery

Engineering Industryd

Industry

Manufacturing

Textiles and textile Machinery

Chemical machinery parts

JunagadhAmreli

Surat

Navsari

V l d

Dang

Industry

Auto andChemical

Gems and Jewellery

Manufacturing Industry

Chemical machinery parts

Automobile & auto parts

Engineering Industry

Gems and jewellery

ValsadAuto and Auto Ancillaries

Chemical Machinery Parts

4

j y

Pharmaceutical

Gujarat-Manufacturing Industry Overview

Gujarat’s Manufacturing sector contributes 28.21% of state GSDP as per 2011-12

100% Gujarat - Major contributor to India's manufacturing sector (2012 13)

Contribution of Manufacturing S i GSDP

98%80% 75%40%

60%

80%(2012-13)

28.02%28.21%

Sector in GSDP

62% 53% 51%37% 35% 31% 30%

0%

20%

27.16%

27.57%

2008-09 2009-10 2010-11 2011-12

• Manufacturing sector output of Gujarat stands at 13% of the total output of the total national output.

• The state is leader in production of Soda ash, Salt, Petrochemical downstream products and Export of Diamonds

• With the Manufacturing Policy – 2011, Gujarat aims to increase the share of manufacturing sector in total GSDP from 28 21% to 32% in the next five years

5Sources : CMIE, ASI 2010-11 & Economic survey 2011-12

28.21% to 32% in the next five years

• Manufacturing Sector of Gujarat has shown almost 216% growth with CAGR of 10.11% over last 8 years

Gujarat Manufacturing Industry – Focus Sectors

The focus sectors identified by the Government for supporting the growth of manufacturing industry inGujarat is broadly classified into Textiles, Engineering, Automobile and AutoAncillaries, Chemical, Gems & Jewellery and Pharmaceutical.

Focus Sector in the Manufacturing Industry of Gujarat

Textiles EngineeringAuto and Auto

AncillariesChemical

Gems and Jewellery

PharmaceuticalAncillaries Jewellery

P i i

• Conventional Textiles

• Precision Engineering including defense offsets

• Automobiles and auto parts

• Research and

• Chemical Products

• Specialty Chemicals

• Precious gems and stones

• Diamond Gol

• Pharmamachinery

• Biotechnology• Technical

Textiles• Fabricated

metal products

• machinery and equipment

• Research and Development

• Process and Design

Chemicals• Coke refined

petroleum products

• Diamond, Gold and Silver Jewellery

• APIs (active pharmaceutical ingredient)

6

These focus sectors contribute to ~ 80% of manufacturing sector output

equipment

Gujarat Industrial Policy 2009

Major schemes and incentives to boost Manufacturing Sector in GujaratAssistance to MSMEs• Interest Subsidy• Venture capital

Improving Industrial Infrastructure • Assistance to Critical infrastructure

Projects

• Infrastructure support• Venture Capital and Patent Assistance• Support for R&D institutions Venture capital

• Quality Certification• Skill Enhancement• Technology Acquisition Fund• Patent Assistance• Energy and water conservation

Projects• Financial Assistance to Industrial Park

Assistance to Textiles and apparels• Interest Subsidy• Technical Textiles

pp

Enhancement of Technical Competence and Man Power • Assistance to State Level Anchor Institute

• Market Development Support• Support for Ancillary/ Vendor

Development• Support to Auxiliary industries for

value additionA i t t R & D

Technical Textiles• Technology Acquisition• Apparel Training Institutions and Trainees• Training in Power loom Sector• Technological acquisition for value chain• Support for development of Textile &

Assistance for Technical Competence and Man Power

• Extension Training Centres• Specialized Skill Development Centre

• Assistance to R & D• Cluster Development• Rehabilitation of Sick Units

Assistance for Environment

Apparel Park

Assistance to Gems & Jewellery Sector• Interest Subsidy• Hall Mark Certification and Gems Testing

Assistance for Environment Protection Measures and Infrastructure

• Assistance to Common Environment Infrastructure Facilities (CEIFs) in PPPAssistance for Environment

Protection Measures-MSME units• Assistance Environment Management

to MSMEs• Assistance for encouraging green

practices and Environmental Audit to

Centre• Assistance for Health & Safety Measures• Support for development of Jewellery

Park

Assistance to Chemical Industries

Infrastructure Facilities (CEIFs) in PPP• Financial Assistance under Non PPP

Projects• Assistance for clean carbon credits

(CERs and VERs) and reducing carbon footprints

7

practices and Environmental Audit to MSMEs

Assistance to Chemical Industries• Subsidy on electrical duty• Labour law flexibility

• Assistance for strengthening the Regulation and Environmental Compliance


Cl t D l t i PPP M k D l SCluster Development in PPP Mode

Interest Subsidy

T h l A i iti F d

Market Development Support

Patent Assistance

Support to R&D Institutions

Assistance to MSMEs

Technology Acquisition Fund

Venture capital

Patent Assistance

Energy and water conservation

Support to Auxiliary industries forvalue addition

Promotion of Specific Sector

Quality CertificationRehabilitation of Sick Units

Support for Ancillary/ Vendor Development Skill Enhancement

Awards to best MSMEs

8

3.1 Textile Sector

3.1.1 Textile Sector :

Global Scenario

Textile IndustryGlobal Scenario

Global textile and clothing industry is estimated to be worth about USD 4,395 billion as of 2012.

7%

World Technical Textile Market Structure• With China leading the global textile trade, India ranks secondwith 8 per cent of the total textile trade

81%

5%7%

7%Agrotech

Packtech

Clothtech

Hometech

• Technical Textiles/Industrial Textiles account for over 27 percent of all fiber consumed and more than 50 percent of the total textile activity in certain industrialized countries

• Global Technical Textiles market was estimated ~ USD 127 billion

Global Textile Production (Million tonnes) 11% 8%

World production of Synthetic Fiber

81%in 2012

• Global market for textile machinery is estimated to reach USD 22.9 billion by 2017

Global Textile Production (Million tonnes)

3.5

7.7

Composites

Non Woven 6%8%27%

20.50%20%

3%2.50%

1.50%

27%

9%8% 6%

31%

12% 11% 8%

WEU incl. TRUSA & CanadaJapan

2259

10.8

Non Woven

Woven, Braided, knitted etc

44%52% 56%

5%

22%

20%

Japan

Rest of WorldIndia

Chi

11Source: ICTN 2010, IBEF, Global Industry Analysts, Inc., D&B

Technical Textile Traditional Textile

knitted etc.

1970 2005 2008 2015E

China


India Scenario

Textile Industry

India Scenario

India Textile Market Size (USD billion)

India is the 2nd largest textile economy by production in the world after China and contributes ~14 percent to the total industrial production in India

• India’s position in the global market

100

150

200

250

70 78 89

143

223CAGR: 10.1%

• 2nd largest producer of cotton (18 percent of global production)

• 2nd largest producer of silk

• 3rd largest producer of cellulosic fibre / yarn

0

50

100

2009 2010 2011 2016E 2021E

70


• 3rd largest producer of cellulosic fibre / yarn

• Largest producer of jute

• The size of India’s textile market in 2011 was USD 89 billion; the market is expected to expand at a CAGR


150

Demand for Apparel (USD billions)

CAGR: 11.1%

of 10.1 percent over 2009-21 to reach at USD 223 in 2021

0

50

100

65

122

13

0

2010-11 2016-17EDemand for Apparel (USD billions)

Source: Ministry of Textiles, The Cotton Corporation of India Ltd., Technopak

Textile Industry

India Technical Textile

Technical textiles, which has been growing at around twice the rate of textiles for clothing applications over the past few years, is now expected to post a CAGR of 20 per

cent over FY11-17

I di T h i l t til /I d t i l T til k t t d i i l f i P kt h Cl tht h d• Indian Technical textile/Industrial Textile market today is mainly focusing on Packtech, Clothtech and Hometech; while higher value added products like Medtech & Indutech still have to be expanded

• The government has supported this industry with USD 1 billion help for SMEs and an exemption in custom duty for raw materials used by the sector as of 2012-13G t l t l h USD 44 2 illi i i f th ti f t h i l t til /i d t i l

Technical Textile Industry (USD billion) Indian Technical Textile Market Structure (2012 13)

• Government plans to launch a USD 44.2 million mission for the promotion of technical textiles/industrial textiles, and cleared plans to set up a new research centre for the industry

30

40

31 3

CAGR: 21.3%

33%15%

13%

(2012-13)

Agrotech, Geotech etc.Packtech

0

10

20

2011 12 2016 17E

11.9

31.3 15%Clothtech

Hometech

14Source: The Indian Textile Journal, Ministry of Textile

2011-12 2016-17ETechnical Textile Industry (USD billion)

39%

Textile Industry

Exports and Planned Outlay

In the 12th Five Year Plan, the Government of India plans to spend USD 9.1 billion against USD 4 billion in the 11th Five Year Plan on textiles

• Rising government focus and favorable policies to t th i d t

Textile Exports (USD billion)

support the industry• The industry accounts for nearly 11 per cent of

total exports of the country• Exports grew to USD 33.3 billion in FY12 from USD

17 6 billi i FY06 i l i CAGR f 11 2 20

30

40

19.222.2 21.1 22.4

27.8

33.3CAGR: 11.6%

17.6 billion in FY06, implying a CAGR of 11.2 per cent

• India’s textiles products are exported to more than a hundred countries; of which USA and EU account f l t 2/3rd

0

10

20

2006 07 2007 08 2008 09 2009 10 2010 11 2011 12for almost 2/3rd

Planned outlay (USD billion)

CAGR: 258%

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

3% 3%4%

Shares in textile exports (2011-12P)

Readymade Garments

Cotton Textiles

5

10

4

9.1

CAGR: 258%39%

34%

17% Cotton Textiles

Manmade Textiles

Handicrafts

Silk & Handlooms

Woolen & others

15Source: GHERZI research, Ministry of Textile

0

11 th five year plan 12 th five year plan

Woolen & others


Gujarat Scenario

16

Textile Sector

Gujarat: Textile Hub of India

Map 1: Important locations in Gujarat Gujarat is the leader in textile comprising of 1,560 medium and large textile unit

• Gujarat is the largest producer (33%) and exporter (60%) of cotton in the country

Kutch - Textile Handicrafts

Textile Hubs in Gujarat

exporter (60%) of cotton in the country• Around 50% of the country's art silk fabric is

produced in Surat alone• Gujarat is the largest producer of denim in

India (65%) and the third largest in the world

Surendranagar,Manavadarand Gondal:India (65%) and the third largest in the world

• About 24-28% of fixed investment, production of Small Scale Industries are from textiles sector

• Gujarat has the highest number of mediumSaurashtra: Jetpurfor Hand printing

and Gondal: Cotton inning

Ahmedabad

• Gujarat has the highest number of medium and large textile processing houses (over 600) and is home to more than 50% of India's processing machinery manufacturers and 90% of weaving machinery manufacturers

for Hand printing and processing units

Ahmedabad –Manchester of the east / Denim city Surat – Silk city

Gujarat has 18 textile related product

of weaving machinery manufacturers• Gujarat contributes to over one-fourth of the

country's technical textile output• It is also the largest manufacturer of man

made and filament fabric and the second

Ankaleshwar and Tapi: Technical Textiles

17

Gujarat has 18 textile-related product clusters

made and filament fabric and the second largest manufacturer of cotton

Source: Industries Commissionerate, iNDEXTb; Gujarat Chamber of Commerce and Industry; IBEF; GCCI

Textile Sector

Gujarat’s Strength

Gujarat has leveraged the advantage of capital intensity in textile industry triggering capital and human productivity

• High raw material availabilityG j ib 62% f h ll• Gujarat contributes to 62% of the overall petrochemical output of India and thus has facility to produce almost all varieties of man-made fibres

• Gujarat is the 2nd largest decentralized power loom i d d bl d i i d iconcentrating state and doubled its capacity during

last 8 Years (50,000 looms (cotton)/8lakh filament)• Gujarat is the largest producer of cotton in the

country with production of 93 lac bales in 2012-13 ili i 24 97 l h f l dutilizing 24.97 lac hectares of land

• Present Capacity• Ginning – 1200 units• Spinning – 1.2 million working Spindle

W i 50 000 l• Weaving – 50,000 looms• Processing (medium & large) – 600 Units (Yarn,

Fabric & Garments)• Knitting & Apparel (small & medium) – 2,00,000

hi

18

machines • Hand Printing – 1500 units in Jetpur alone

Source: Industries Commissionerate, iNDEXTb

Textile Sector

Gujarat’s Technical Textile

1,000 plus Technical Textiles units with presence in all the 12 sub-sectors of Technical Textiles

• Gujarat Technical Textiles market is estimated End usage by sub sector of technical k t i G j taround Rs. 7737 crore in 2011-12 at current

prices; contributing around 10% to the national Technical Textiles output

• Major units of technical textiles are mainly8%

3%7%

market in Gujarat

Packtech

H hMajor units of technical textiles are mainly concentrated in Ahmedabad, Surat, Vadodara and Kutch

• There are more than 200 products classified as T h i l T til d P t ti T til A

63%10%

9%

Hometech

Clothtech

Indutech

Buildtech

O hTechnical Textiles under Protective Textiles, Agro Textiles, Geo Textiles, Automotive Textiles and Home Textiles

Others

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

• 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

• Gujarat is the Chemical hub of India; b h f h ll

19

industry, horticulture industry, automobile industry, chemical industry, infrastructure etc

Source: Industries Commissionerate, iNDEXTb; IBEF

contributing to more than 50% of the overall Indian chemical output

Textile Sector

Present Infrastructure and Textile Clusters (SMEs)

Infrastructure for Textile Industry in Gujarat • Three dedicated textile SEZ are planned to be developed in Ahmedabad; while one such SEZ, Surat Apparel Park is functional

SabarkanthaMehsana

Kutch

Ahmedabad: Cotton and blended fabric, denim, made-ups, ladies’ garments, textile machinery and its parts

Jamnagar

Amreli

BhavnagarRajkot

Ahmedabad

Vadodara

Bharuch

Surat

Surat for Art silk fabric, Synthetic textiles, Jarimanufacturing, embroidery, textile machinery and its parts

Junagadh Surat

Navsari

Valsad

Kutch Textile Handicrafts

Umargaon: Modern power looms, Synthetic suiting and shirting

Textile & Apparel SEZ (4)

Integrated textile parks (7)

P d t l t (18)

Saurashtra: Jetpur for Hand printing and processing units and Manavadar for Cotton

Kutch: Textile HandicraftsResearch & testing facility (2)

Educational infrastructure

20

Product clusters (18)ginning DMIC influence area

Textile Sector

Major Players in Gujarat

Leading Industry players in Gujarat are spread across the state

21

Textile Sector

Educational Infrastructure

28 ITI’s in Gujarat provide industrial training courses on Textile and Garment industry with an approximate intake of 5,876

• Major academic institutions that are offering training

Ahmedabad

Gandhinagar

Vadodara

Bh

Rajkot

programmes include Ahmedabad Textile Industrial Research Association (ATIRA) Man-made Textile Research Association (MANTRA), Surat National Institute of Fashion Technology (NIFT),

Surat

BhavnagarGandhinagar

Apparel and Leather Technics (ALT) Training College, Ahmedabad

National Institute of Design (NID), Ahmedabad Location of Major Educational Institutes Surat Education and Research Society

• Gujarat has three engineering colleges in Ahmedabad, Vadodara and Surat, offering courses in Textile technology, Textile processing and Textile engineering

Location of Major Educational Institutes

Specific textile courses offered by ITIs• Cutting and sewing• Cutting and Embroidery and

needle work• NTC (National Textile Corporation) is planning to set up two

CoE (Center of Excellences) in Guajrat• Government provides assistance to apparel training

institutions and trainees as well as training support to

needle work• Computer-aided dress making and

dress design• tailoring• Pattern making

22

powerloom sectorPattern making

• Finishing garment checking

Source: Gujarat Chamber of Commerce and Industries

Textile Sector

Textile Composite Centre

C it t i l d f t b t ith diff t h i l h i l• Composites are materials made from two or more substances with different physical or chemical properties

• Union ministry of textiles, has declared ATIRA as a Centre of Excellence (CoE) for composites• 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

Spinning

WeavingMarketing

• 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 Composite centre of

Textile Industry

KnittingGarmenting

• Testing and certification: Help test the products developed and provide certification. It would also provide testing for raw materials

• Design studio: Development of new designs

Textile Industry

ProcessingDesigning

• Branding and Marketing: Help industry participate in National and International Exhibitions and organize conferences, seminars, workshops etc to educate the industry

FinishingTesting

23

• Skill development: Training manpower with the latest technology

Textile Sector

Gujarat Scenario: 2017

Attract at least 2,000 new units with an investment worth Rs. 10,000 crore by introducing Technical Textile Mission

Government of Gujarat’s development agendal h i l h i f h il d

Government of Gujarat planned to invest S 3 28 billi i il i d• 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

hi h h i h 200 diff d

~ USD 3.28 billion in textile industry which will also create 1 million jobs in the sector

which has use in more than 200 different products across sectors

• Technical Textiles of Gujarat will strive to capture 50% of the Indian marketC i ddi i i 5

4%

Investment in next 5 years

Spinning

• Capacity addition in next 5 years• Ginning – Additional 200 modernized units • Spinning – Tripling Capacity with additional 25 lakhs

Spindle with modern technologyW i Additi l 1 00 000 Sh ttl l d

43%

5%

6%

13% Weaving

Processing

K itti &• Weaving – Additional 1,00,000 Shuttle less and Automatic shuttle looms

• Processing – Additional 60 Units (Yarn, Fabric & Garments)K itti & A l Additi l 2 00 000 tit hi &

29%

Knitting & Apparel

Technical Textile

Textile &

24

• Knitting & Apparel - Additional 2,00,000 stitching & supporting machines

Textile & Spinning Park

Source: Industries Commissionerate, iNDEXTb

Textile Sector

Interventions in Technical Textile Sector

Key Interventions

Technology Mission on Technical Textiles (TMTT) focuses on standardization, creating common testing facilities with national / international accreditation and to provide support for the development of domestic & export markets for technical textiles

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 Government of India scheme for the development of such Composite Centres will be improved)

An International level CoE (Centre of Excellence) to be set up in the state focusing on technical textiles by NTC (National Textile Corporation) in collaboration with international firms from Japan, USA and Germany

2 new Technical Textile zones to be developed in Ahmedabad and Surat district

Additional 6% interest subsidy in addition to 5% interest subsidy and 10% capital subsidy by

25

Government of India

Textile Sector

Gujarat Initiatives

Key Government Initiatives

Textile Industry Promotion Policy 2012

Interest subsidy of 5% will be given without a ceiling for the period of five years on new plant and machinery for ginning and processing

7% on new plant and machinery for cotton spinning as well as for second-hand imported cotton spinning machinery with certain conditions without a ceiling for five yearsspinning machinery with certain conditions without a ceiling for five years.

Power tariff concession on new investment for cotton spinning will be provided at Rs 1 per unit for five years and there will be refund of VAT paid by the unit on the purchase of raw material

Fi i l i t t kill d l t t f t til i d tFinancial assistance to skill development centers for textile industry

Financial assistance for technology acquisition for value chain

Assistance for energy conservation, water conservation and environment compliancegy p

The new policy is expected to attract an investment of over INR 20,000 crore creating new employment opportunities for over 2.5 million people, 50% of them being rural women, during the next five years

Support for establishing Textile & Apparel Park : 1) 50% (max. INR 30 crore) for Spinning Park and 2) 50%

26

Support for establishing Textile & Apparel Park : 1) 50% (max. INR 30 crore) for Spinning Park and 2) 50% (max. INR 10 crore) for Other Textile Park

Textile Sector

Investment Opportunities

Conventional TextileHigh valued garment manufacturing Cotton and synthetic based spinning,

HometechHigh quality upholstery fabric, narrow width fabric for furniture application, wipes for house hold use, fiber foam

IndutechGlass fiber battery separator, fusing belts, high mesh filters. Industry felt woolen felt fire resistantweaving and processing units

AgrotechAgro shading net packing net for

& wadding, fiberfill products like quit & pillows

Geotech ClothtechNarrow width fabric as fashion

felt, woolen felt, fire resistant fabric, slings for bulk handling

Agro shading net, packing net for agro products

BuildtechScaffolding net

Woven & non-woven geotextiles Narrow width fabric as fashion accessories like belt

MobiltechInterior carpets & NVH components

ProtechFire retardant clothes

MeditechNonwoven disposables like apron, mask, caps, draper etc

PacktechJumbo bags, FIBC, coated fabric for soft luggage

OekotechPP nonwoven liners for land fill sites of MSW

Infrastructure DevelopmentCotton integrated textile and apparel park

• Modern Cotton Spinning• Cotton based shuttleless weaving• Energy efficient modern process house• Made-ups and garments

27

p g

Department and Implementing Agencies Details

Industries Commissionerate

Block No. 1, 2nd Floor, Udyog Bhavan,

Gandhinagar, Gujarat, India - 382 010

http://ic.gujarat.gov.in/

Phone: 079 23252683Phone: 079-23252683

E-mail: [email protected]

Gujarat Industrial Development Corporation

Block No. 4, 2nd floor, Udyog Bhavan,

Gandhinagar, Gujarat, India – 382 010

h // id i /http://www.gidc.gov.in/

Phone: 079-23250583


28

3.2 Engineering Sector

29

3.2.1 Engineering Sector: Global Scenario

30


Global Scenario

Engineering Industry can be classified in to following sectors

120Key global engineering segment output estimates (in USD billion)

• Asia-Pacific is the largest producer;

• Asia is the largest production center; contributing ~40% of the global market100

7 614.7

15.6417.65

17.6518.77

19.95

output estimates (in USD billion)

Electrical equipments

Asia Pacific is the largest producer; contributing 38.4% of the global market

• America and Asia Pacific region are the largest producers; contributing

60

80

9 93

29.75 31.132.4

33.8535.3

36.95.64

7.6Machine Tools

Industrial

• Globally, China is the largest producerand consumer of machine tools;contributing ~42% and ~30% of globalconsumption & production

~71% of the overall global production

40

44 1 45 9 47.54

7.82 8.2 8.6 9 9.48 9.93 dust aMachinery

Heavy Electrical equipments consumption & production

respectively

• North America, Europe, and NorthAsia are the largest service providers;contributing 91% of the overall global

k t

0

20

2010 2011 2012 2013E 2014E 2015E

39.1 40.33 42.2 44.1 45.9 47.54 q p

Engineering Services

31Source: 2012 World Machine Tools Output & Consumption Survey, IBISWorld Pvt Ltd, Datamonitor Plc

market2010 2011 2012 2013E 2014E 2015E

3.2.2 Engineering Sector: India Scenario

32


India Scenario

Capital goods & engineering turnover is expected to reach USD 125.4 billion by 2017 from USD 57.6 billion in 2012

Construction equipment market revenue • Due to fast pace industrialization & economic d l h i d d d f

20

30 22.7

(USD billion)

CAGR: 28.8%

development there is a tremendous demand of capital goods & engineering market

• Indian construction equipment market to grow sevenfold from 2012 to 2020E i i h & d i

0

10

20

2012 2020E

3

Construction equipment market revenue (USD billion)

• Engineering research & design segment revenues to increase fourfold by 2020

• Electrical equipment market size is expected to increase fourfold by 2022

Construction equipment market revenue (USD billion)

150 105

Electrical equipment market size (USD billion) Engineering Research & Design revenue

(USD billion)

CAGR 19%

50

100

24.2

105CAGR: 14.2%

20

40

60

11.2

45CAGR: 19%

33Source: Department of heavy industries, NASSCOM

0

2011 2022EElectrical equipment market size (USD billion)

0

2012 2020EEngineering Research & Design revenue (USD billion)


India Scenario: Industry Structure

Engineering

i i i h i iHeavy Engineering Light Engineering

• Textile machinery industry• Rolling Bearing Industry

• Medical and surgical instruments• Cement machinery industry

• Sugar machinery industry

• Rubber machinery industry

• Medical and surgical instruments

• Process control instruments

• Industrial fasteners

• Ferrous castings• Material handling equipment industry

• Oil field equipment industry

• Metallurgical industry

Ferrous castings

• Steel forgings

• Seamless steel pipes and tubes

• Electrical resistance welded (ERW) steel pipes and• Mining machinery industry

• Dairy machinery industry

• Machine tool industry

Electrical resistance welded (ERW) steel pipes and

tubes

• Submerged-arc welded (SAW) pipes

• Bicycle industry

34Source: Ministry of Heavy Industries & Department of Industrial Policy & Promotion

cyc e dust y


India Scenario: Exports

Engineering exports include transport equipment, capital goods, other machinery/equipment and light engineering products such as castings, forgings and fasteners

• The engineering sector retained its 18 per cent share in overall exports from the country which is the maximum in• The engineering sector retained its 18 per cent share in overall exports from the country which is the maximum in terms of sectoral contribution

• Over 2007-08 to 2012-13, exports registered a CAGR of 12.6 per cent• Exports target for 2013-14 is estimated at USD 125 billion• Transport equipment is the leading contributor to engineering exports. The segment accounted for 32.5 per cent of

Engineering Exports (USD billion) Exports of principal commodities (2012-13)

p q p g g g p g pthe total engineering exports during 2012-13

40

60

80

31 3

45.338.3

58.167.1

56.7CAGR: 12.6%

32.50%9%

14.10%

commodities (2012-13)

Transport equipment

Machinery & instruments

0

20

40 31.3

17.70%

instruments

Manufacturers of metals

Primary & semi furnished iron & steel

35Source: Engineering Export promotion Council

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 26.80% Others

3.2.3 Engineering Sector: Gujarat Scenario

36


Gujarat Scenario

3017

Industrial ClustersEngineering

Textiles

Food

• Engineering sector of Gujarat contributes around 18% to state’stotal industrial production and around 9% to the national engineering output.

• Engineering sector in Gujarat comprises more than 300 units in

1310

7

6 ProcessingChemicals

Minerals

Others

Engineering sector in Gujarat comprises more than 300 units in large sector and 75,00 units in small and medium (SMEs) enterprises.

Sh f G j i i l i i

12.70%

16.20%Share of Gujarat in national engineering

goods production • The small-scale industry is a significant contributor to the production of brass parts, foundry, forging and machine tools oil engines and electric

6%6.70%

9%10.40% tools, oil engines and electric

motors, submersible pumps and industrial valves and bearings.

• Gujarat houses 83 product clusters; out of

ElectronicsElectrical EquipmentTransport EquipmentBasic MetalsMachinery and EquipmentFabrication of Metal Pro

which 30 are engineering product clusters.

• The brass parts cluster at Jamnagar has over 5,000 small units and meets almost 70% of the entire requirement for brass

37Source: IBEF

70% of the entire requirement for brass parts in India.


Gujarat Scenario: Engineering SME clusters

The Engineering SME cluster of Gujarat is mainly concentrated at Ahmedabad, Anand, Rajkot, Vadodara, Surendranagar, Jamnagar, Mehsana, Panchmahal and Kutch

k hFoundry & Forgings

Steel re-rolled productsBrass parts

Steel Pipes and tubes

Kutch

Banaskantha

SabarkanthaPatan

Mehsana

Fabricated metal products

Steel & Aluminium Furniture

Electric motors

Power driven pumps

Kutch

Jamnagar

Surendranagar

Ahmedabad

Gandhinagar

Anand

Panchmahal

Nadiad

Kheda

Textile machinery parts

Chemical machinery parts Food processing machinery

Machine tools

Jamnagar

Porbandar

Amreli

Bhavnagar

RajkotVadodara

Bharuch

Anand

Diesel engine & parts

Ball & Roller bearingsAutomobile & auto parts

Earth Moving Machinery

JunagadhSurat

Navsari

Valsad

Dang

• Alang, a port in Bhavnagar, is the largest

38

Pumps and ValvesValsadg, p g , g

ship recycling yard in the world.


Gujarat Scenario: Presence across value chain

Heavy engineering

Heavy electricalHeavy engineering and machine tools Automotiveand machine tools

• Boilers• Turbines and generator sets

T f

• Textile machinery• Ceramic machinery• Sugar machinery

• Passenger and utility vehicles• Auto components and auto

ancillaries• Transformers• Switchgear and control gear

• Sugar machinery• Rubber machinery• Material handling equipment• Oil field equipment• Metallurgical machinery

ancillaries

• Dairy machinery• Earth moving and construction

machinery• Agricultural machinery

39


Gujarat Scenario: Presence across value chain

Light engineering

Low technology products

High technology products

Plastic Machineriesproducts productsMachineries

• Roller bearings• Welding equipment and

• Medical and surgical instruments

• Injection moulding• ExtrusionWelding equipment and

consumables• Casting and forging• Pipes and tubes• Fasteners

• Process control instruments• Domestic appliances• Electronics

• Blow moulding• Reprocessing• Extrusion coating

Fasteners

40


Gujarat Scenario: Industrial Infrastructure

Particular Units Symbol

Special economic zones 2

Industrial Parks 18

Upcoming modern sector specific

DMIC influence area

KutchUpcoming modern sector specific clusters planned on PPP mode

Engineering Plastics & Plastic Processing at

Ahmedabad

Kutch

Viramgam-Surendranagar

HalolEngineering Plastics & Plastic Processing at Dahej

Auto Components & Light Engineering at H l l

Dahej

Halol

Precision & Light Engineering at Sanand

41Source: GIDC


Gujarat: Educational Infrastructure

Number of Seats in Degree Engineering Colleges, Gujarat, 20138,970

1,19454016 3

Number of Degree Engineering Colleges, Gujarat, 2013

• At the end of 2013, Gujarat is projected to have an intake capacity of 60,883 degree students in engineering

• More than 3,060 seats have been added in 54032

95Government CollegesGrant-in-Aid

2013 alone along with 4 new engineering colleges and institutions

• The tally leads for Mechanical Engineering with 16, 230 seats, followed by

50,179

Grant-in-Aid Colleges

yCivil, Electrical and others

M h i lSeat Matrix Year-

• A healthy increase in seats offered is projected in coming years, with Mechanical Engineering increasing 130%

12000140001600018000 (16230)

2010 20112012 2013

MechanicalEngineering

CivilEngg. Electrical

Engg. ComputerEngg. Electronic

s & Comm Information

Wise

from 2010 to 2013

• Civil and Electrical Engineering seats more than doubled during 4000

60008000

1000012000 (9950) (9839)

(8160) (7080)

(3555)

s & Comm.InformationTechnology

42

the same period

Source: Gujarat Technical University

02000

Skilled Manpower availability in Gujarat

Gujarat Scenario: Skilled Man Power Availability

120000

140000

160000

Sanctioned Seats in the ITIs

600

700

800Number of ITIs in Gujarat

40000

60000

80000

100000

120000

300

400

500

600

0

20000

40000

0

100

200

Private Government Total

• Gujarat Government has also encouraged skill development programs Skill development budget

Private Government Total

• Gujarat Government has also encouraged skill development programs. Skill development budget has increased from INR 107 crore in 2001-02 to INR 1000 crore in 2013-14.

• Government of Gujarat has also introduced number of effective schemes such as CTS (Craftsmen Training Scheme) ATS (Apprenticeship Training Scheme) KVK (Kaushalya Vardhan Kendra) short

43Source: Socio Economic Review 2012-13

Training Scheme), ATS (Apprenticeship Training Scheme), KVK (Kaushalya Vardhan Kendra), short term courses. Under these schemes around 7,80,000 people have been trained.


Gujarat Scenario: Interventions and Initiatives

5 precision engineering clusters will be developed in Jamnagar, Halol, Sanand, Lodhika, Mandal –these clusters will be developed by GIDC

Development of state-of-the-art industrial clusters and industry-focused investment regions

these clusters will be developed by GIDC

Centres of Excellence will be developed in each of these clusters

Introduction of reforms and flexible labor laws

InitiativesThe benefits of existing industrial park scheme will be extended to the tune of USD 3 2 million

Promotion and development of small and medium enterprises through various innovative

Interventions

Units coming in these clusters will be provided single window clearances and streamlined & hassle-free procedures for

the tune of USD 3.2 millioninitiatives

Introduction of cluster development measures to support and strengthen

h f h

Government will identify and provide large tracts of land for specialized trials of

pobtaining various approvals growth of the sector

Promotion of institutions, such as Space Application Centre, Indo-German Tool Room and Electronics & Quality Development

44

pequipment

Room, and Electronics & Quality Development Centre, which provide support to the engineering sector

3.2.4 Engineering Sector: Investment

O i iOpportunities

45


Gujarat Scenario: Investment Opportunities

Engineering service outsourcing Material handling equipment

Transformers & Boiler manufacturing Power equipment manufacturing

Auto components Infrastructure equipment

Defence offset Modern cement and textile machinery

Material handling equipment Turbines, transformers, generators

46






Phone: 079 23252683Phone: 079-23252683






Phone: 079-23250583


47

3.3 Automobile & Auto Ancillaries

3.3.1 Automobile & Auto Ancillaries: Global

S iScenario

Automobile & Auto Ancillaries

Global Scenario

As the global economy recovers from the financial shocks of the last five years, the automotive industry is playing a huge role in bringing it back to life.

• On present, the global automotive industry is i d h S 800 billi

World car d i ( illi

2012 2013 Change(%) estimated to worth USD 800 billion

• The global market for cars and other light vehicles will expand from 80 million units a year now to well over 100 million by 2020A di h W ld B k j 18 l i

production (million vehicles)

(%)

China 19.27 22.12 14.8

USA 10.33 11.05 6.9 • According to the World Bank just 18 people in every 1,000 own a car in India, while in China the figure is 58; hence there is huge untapped potential in this sectorE i k ’ h f l b l l ill i

USA 10.33 11.05 6.9

Japan 9.94 9.63 -3.1

Germany 5.65 5.72 1.2

South Korea 4.56 4.52 -0.9• Emerging markets’ share of global sales will rise

from 50 percent in 2012 to 60 percent by 2020Brazil 3.34 3.74 9.9

30

402.68 4 47 4 72 4.87 5.0724 41

27.25 29.98 32.38Global Car Sales Outlook (In millions)

0

10

20

3016.36 17.97 15.22 17.11 18.33 18.891.64

4.47 4.72

14.29 17.01 16.7 15.9 15.6 16

6.9113.05

24.41

50Source: Clear Water Report, McKinsey; OICA

1990-99 2000-10 2011 2012 2013e 2014fNorth America South America Eurpoe Asia

3.3.2 Automobile & Auto Ancillaries: India

S iScenario


Indian Scenario: Automobile

By 2020, India's share in the global passenger vehicle market to double to 8 per cent from 4.8 per cent over 2013

Market share by volume (2012-13)• India is the world’s second largest two wheeler manufacturer in the world the largest three wheeler market the second

15%

4%4%

Two Wheelers

Passenger Vehicle

in the world, the largest three wheeler market, the second largest tractor manufacturer in the world, the fourth largest car market and fifth largest commercial vehicle manufacturerin the world

• Automobiles production increased at a CAGR of 12.2 per cent

77%

g

Commercial Vehicle

Three Wheelers

over FY05-13• Passenger vehicle sales to nearly triple by 2020E• The gross turnover of automobile manufacturers in India

expanded at a CAGR of 17.7% over FY07-11

40

60

30 536.6 33 3

43.3

58.6

Revenue Generated (USD billion)

CAGR: 17.7%20.40%

Market Break Up by Revenue (2011)

Tr cks

0

20

40 30.5 33.3

47.80%

31.80%

Trucks

Cars

Two Wheelers

52Source: SIAM; OICA

2006-07 2007-08 2008-09 2009-10 2010-11


Indian Scenario: Automobile Exports

Exports share by volume (FY 13)• Two-wheeler segment reported the fastest growth (22.2 per cent) followed by three-wheelers (16.3 per cent)

Automobile export volumes increased at a CAGR of 19.1 per cent over FY05–13

19%

3%

11%

Passenger Vehicle

Commercial Vehicle

Th Wh l

p ) y ( p )over FY05–13

• Exports of passenger vehicles registered the highest growth at 9.02 per cent in FY13

P hi l i d i bl 19 t f 11%

67%

Three Wheelers

Two Wheelers

• Passenger vehicles comprised a sizeable 19 per cent of overall exports

• Two wheelers accounted for the largest share in exports (by volume) at 67 per cent in FY13

1.5

2

1 1

1.5

2 2

Passenger Vehicle

Exports of Automobiles from India (Million Units)

CAGR: 19.1%

0.5

1

0.2 0.2 0.2 0.20.3

0.5 0.5 0.5 0.5

0 00.1 0.1

0 00.1 0.1 0.10.1 0.1 0.1 0.1

0.2 0.20.3

0.40.3

0.40.5

0.60.8

11.1 Commercial

Vehicle

Three Wheelers

Two

53Source: SIAM

0

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

Wheelers

Auto & Auto Ancillary

Indian Scenario: Auto Ancillary

Turnover of the Indian auto component sector increased 20 per cent to USD 43.5 billion in FY 2011–12; growth is likely to remain robust at 8–10 per cent in FY 2012–13 with the auto component industry

expected to reach USD 113 billion by 2020

L fi l d i t l i th i d Production volume by market range• Large firms play a dominant role in the organized sector; of the total production in the sector in FY10, large Indian firms accounted for a major share (at 43 per cent); MNCs formed 15 per centTh b f f t i it i th

15%

Production volume by market range

OEM• The number of manufacturing units in the

unorganized sector are far higher than those in the organized one

Production breakup

60%25%

Replacements

Exports

30%

Production breakup

Production Breakup in Organized Sector

Large Indian

70%

Organized

Unorganized43%42%

PlayersMNCs

Others

54

15%

Source: ACMA


Indian Scenario: Auto Ancillary Exports

India’s exports of auto components increased at a CAGR of 17.4 per cent to USD 6.9 billion during 2006-07 to 2011-12

30Export Market potential (USD billion)• Exports will account for as much as 20 per cent of

h l k f ill i b

15

20

25

30

12.9

4

Other Markets

Western Europe

the total market of auto ancillaries by 2020• Both domestic and export markets are almost

similar in terms of potential share by different product typesE f h l h f I di

0

5

10

2009 2015(E) 2020(E)

1.1 3.610.6

2.34.2

0.4

1.7 North America• Europe accounts for the largest share of Indian auto components exports (36.0 per cent) followed by Asia (28.0 per cent) and North America (23.0 per cent)

85 2

6.9

Value of auto component exports (USD billion)

15.80%

Export market potential by components (2020E)

Transmission & steering

CAGR: 17.4%

0

2

4

63.1

3.8 4 3.4

5.2

10.50%

7.90%

31.60%steering

Suspension & Braking

Interior

55

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12Value of auto component exports (USD billion)

18.40%15.80% Engine & Exhaust

Source:ACMA

3.3.3 Automobile & Auto Ancillaries: Gujarat

S iScenario


Gujarat Scenario: Emerging Automobile Hub

Gujarat is emerging as a key investment destination for the major automobile players

Gujarat has a strong educational

Gujarat has a strong educationalstrong educational

infrastructure in automobile sector.

27 colleges provide technical

strong educational infrastructure in

automobile sector. 27 colleges

provide technicalprovide technical education in automobiles

sector with annual intake capacity of

provide technical education in automobiles

sector with annual intake capacity of ta e capac ty o

1,980. Additionally 111 colleges provide

technical

ta e capac ty o1,980.

Additionally 111 colleges provide

technical education in

mechanical field with annual intake

capacity of

education in mechanical field

with annual intake capacity of

57

p y13,650.p y13,650.


Gujarat Scenario: Auto Industry Structure

Gujarat is one of the leading states in owning vehicles with 1,44,13,717 total vehicles in FY 2011-12

• Gujarat is one of the top threeGujarat is one of the top three states in India in terms of the number of registered vehicles

• Low transaction cost for i k i h

Becharajiaccessing market in the western and northern India.

• The Delhi-Mumbai Dedicated Freight Corridor project will

Ahmedabad

KutchSanand

Mehsana

g p jprovide excellent rail connectivity for the auto sector in Sanand and for other industries.

RajkotHalol

Vadodara

• Cluster development approach and strengthening emerging clusters will add to the state’s ability to attract further

58

industrial investments

Source: Commissionerate of Transport, Government of Gujarat

Automobile Clusters in Gujarat


Gujarat Scenario: Auto Ancillaries in Gujarat

Sound base : 30 clusters comprising castings & machine tools, brass parts, oil engines & electric motors, bearings, auto-ancillaries

In Gujarat, Auto and auto ancillary industry

d

covers,• Assembling and manufacturing

automobiles• Manufacture of auto components for

Rajkot

Sanand

Halol

pall types of vehicles

• CNG kits for automobiles• Industrial automotive bearings

Sh t M t l P t• Sheet Metal Parts• Automotive casting and other

precision parts• Automobile gears

Cluster development approach and strengthening emerging clusters will add to the strength of the state

• Automobile design centre• Auto ancillary SEZ/Park

59

p pp g g g g gin attracting further industrial investments

Source: Government of Gujarat


Gujarat Scenario: Major Auto Clusters

Connectivity element Location Distance/ Connectivity

Airport Ahmedabad 30 Km/SH

Nearest port Kandla/Mundra 300-400 Km

S AN 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/ SH

NAN

Nearest Railway line Viramgam- Sanand < 5 km

Connectivity element Location Distance/ Connectivity

D

Airport Vadodara Domestic Airport 35 Km

Nearest port Dahej Cargo Port 185 Km

HA L Nearest City Vadodara SH 87

NH/ State Highway NH 8 & NE 1 On 4 lane SH No 87

Nearest Railway line Vadodara to Godhra < 5 km

Freight Corridor Delhi Mumbai Industrial 35 Km through SH 87

L O L

60Source: GIDC

Freight Corridor Delhi Mumbai Industrial Corridor (DMIC)

35 Km through SH 87


Gujarat Scenario: Major Automobile Players

• GMI Pvt Ltd has invested ~ USD 327.86 million in its plant in Halol• Added investment of ~ USD 163.93 million to increase capacity to 1,10,000 units

T t M t Ltd h i t d ~ USD 475 illi f it N l t i S d• Tata Motors Ltd has invested ~ USD 475 million for its Nano plant in Sanand• The plant has the capacity to manufacture 250,000 units per year

• Atul Auto Ltd, a Rajkot based three-wheeler company has invested ~ USD 10.33 illi f i 24 000 i i Sh R jkmillion for setting up a 24,000 per annum capacity in Shapar near Rajkot

• Bombardier Transportation India Ltd. has invested ~ USD 33.93 million to set up its wagon manufacturing plant at Savli in Vadodara district

• Asia MotorWorks Ltd, manufacturer of heavy commercial trucks has invested ~ USD 229.5 million 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 ~ USD 245.9 million

• The Company set up a plant with a capacity of 6.75 lakh tyres per annum at Limda, Baroda

61

Baroda


Gujarat Scenario: Upcoming / Proposed Investments

Maruti Suzuki's Rs4,000-crore plant

Ford India has set up its second

Honda Motorcycles and

Hero MotoCorp is in the final stages4,000 crore plant

at Bechraji in Mehsana district

of north Gujarat is likely to be

up its second manufacturing facility in the

country at Sanandin Gujarat for a

Motorcycles and Scooters India

(HMSI) plans to invest over 1,000 crore to set up a

in the final stages of acquiring land at Halol, Gujarat. It will invest INR

1,100 crore in the commissioned by

fiscal year

2016-17

total investment of USD 1 billion

(INR 6000 crore). The plant will be commissioned by

manufacturing unit near Mandal

region and has already acquired 200 acres land

new project, with annual capacity will be 12 lakh

units, going up to 18 lakh units incommissioned by

2014200 acres land 18 lakh units in

the second phase

62

3.3.4 Automobile & Auto Ancillaries: Gujarat

S i 2020Scenario- 2020


Gujarat Scenario: 2020

By 2020, Gujarat aims to achieve 10% of Engineering output from Auto and auto components from current level of 3.7%

AnjarSanand

Particular Symbol

E i ti A t Cl t

Okha

Navlakhi Savli

RajkotHalol

Existing Auto Clusters

Emerging auto clusters in SIRs by 2015

Simar

Dholera Emerging auto clusters in SIRs by 2020

DMIC influence area

The upcoming Special Investment Regions (SIR) will act as global investment destinations supported by

64

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.

Auto & Auto AncillaryGovernment Initiatives & Interventions and Key Government Bodies

b f d d l• An initiative by Government of India, provides automatic approval for foreign equity investment up to 100 per cent; no minimum investment criteria

• Encourage R&D by offering rebates on R&D expenditure

Auto Policy 2002

• Setting up of a technology modernization fund focused on SMEs• Establishment of automotive training institutes, auto design centers

and special auto parks

Automotive Mission Plan (AMP)

2006–16

• Set up at a total cost of USD 388.5 million to enable the industry to be on par with global standards

• Nine R&D centers of excellence with focus on low-cost manufacturing and product development solutions

NATRiPs

• Worked towards reduction of excise duty on small cars and increase budgetary allocation for R&D

• Weighted increase in R&D expenditure to 200 per cent from 150 per cent (in-house) and 175 per cent from 125 per cent (outsourced)

Encouragement by Dept. of Heavy

Industries & Public Enterprises cent (in house) and 175 per cent from 125 per cent (outsourced)Enterprises

• Proposal to allocate USD2.7 billion for JNNURM to bolster sales volumes of Medium and Heavy Commercial Vehicles (MHCV)Union Budget FY14

65

3.3.5 Automobile & Auto Ancillaries:

I O i iInvestment Opportunities


Investment Opportunities: Automobiles

• Strong support from the government; setting up of NATRiP centres• Private players, such as Hyundai, Suzuki, GM, keen to set up R&D

base in IndiaS d i b l kill d li h ki

India is fast emerging as a l b l & h b • Strong education base, large skilled English-speaking manpower

• Comparative advantage in terms of costglobal R&D hub

O t iti • The world’s cheapest car (Tata Nano) has directed focus on the low-income market

• Bajaj Auto, Hero MotoCorp and M&M plan to jointly develop a technology for two-wheelers to run on natural gas

l i lik l b i bl k i h i

Opportunities for creating

sizeable market segments

h h • Electric cars likely to be a sizeable market segment in the coming decade

through innovations

G l M Ni d T d l k I di• General Motors, Nissan and Toyota announced plans to make India their global hub for small cars

• Light vehicle sales estimated to cross 3 million by the end of 2012• Strong export potential in ultra low-cost cars segment (to

d l i d i k t )

Small-car manufacturing

hub

67

developing and emerging markets)

Source: IBEF


Investment Opportunities: Auto Ancillaries

R&D• Joint R&D with Indian companies for new product development and process innovation

Process & • Partnerships with Indian SMEs to address product and process technologies• Off shoring manufacturing design work to JVs or partners based in India

Design

• Greenfield manufacturing facilities in India to meet the robust domestic demand

Manufacturing

potential• Establish India as a key link in the global auto components supply chain

Customer service

• Opportunity for strategic alliance to cover global customers

68Source: IBEF






Phone: 079 23252683Phone: 079-23252683






Phone: 079-23250583


69

3.4 Chemical Industry

3.4.1 Chemical Industry :

Global Scenario

71

Chemical Sector

Global Chemical Industry: 2020

By 2020, developing countries would be home to 31 per cent of global chemical production, and 33 per cent of global chemical consumption

Segment CAGR –2010 15E

CAGR –2015 20E

Industry Growth - USD billion2010-15E 2015-20E

SpecialtyChemicals

5% 5%

Petrochemicals 7% 7%3,000

4,000

5,000

Commodity Chemicals

8% 7%

Polymers 6% 6%0

1,000

2,000

2010 2015E 2020E

24133260

4362

Others 5% 5%2010 2015E 2020E

Industry Growth - USD billion

• Global market of chemical industry was estimated to be worth USD 3 trillion in 2012 excluding pharmaceuticals

• Future growth of chemical industry is linked with demand in Asia, Middle East and Latin America

• Europe, North America are likely to report modest growth (~2%), lower than anticipated global GDP growth

• China is likely to emerge as the largest chemical region in the world by 2020

• India and other Asian countries are also indicating promising potential

• For the emerging markets commodity chemicals is one of the promising sectors Specialty chemicals segment will

72

• For the emerging markets, commodity chemicals is one of the promising sectors. Specialty chemicals segment will be triggered by some companies having multiple business models across various markets

Source: OECD, UNEP, IHS


India Scenario

Chemical Sector

India Scenario

Chemical industry's current turnover is about USD 30.8 billion which is 14 % of the total manufacturing output of the country

• Indian chemical industry ranks 12th in the world by volume in the production of chemicals• Total production in the Indian chemical industry was 8,374 MT in FY12, a 2.5 per cent rise over FY11• With 74 per cent of the total production share, alkali chemicals form the largest segment in the Indian

chemical industry• India’s growing per capita consumption and demand for agriculture-related chemicals offers huge scope of

growth for the sector in the future• In India consumption of petrochemical products is still one of the lowest in the world; hence there is a huge

84008374

Production of major chemicals (000'MT)

Production share of major chemicals FY13

• In India, consumption of petrochemical products is still one of the lowest in the world; hence there is a huge untapped potential in this sector

76007800800082008400

76057823

7423

7651

81702% 7%

16%

1%

Dye & dyestuff

Inorganic chemicals

organic chemicals

6800700072007400

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

1%

74%

organic chemicals

Pesticides

Alkali chemicals

74

Production of major chemicals (000'MT)

Source: Department of Chemicals & Petrochemicals

Chemical Sector

Segments & Characteristics of India chemical sector

Key segments of India Chemical Industry

Base chemicalsPetrochemicals, man-made fibres, industrial gases, fertilizers, chlor-

lk li d h i

Specialty chemicalsDyes and pigments, leather chemicals, constructio

h i l l

PharmaceuticalsActive Pharmaceutical Ingredients (APIs)

d f l ti

AgrochemicalsInsecticides, herbicides, fungicides and other crop

i

BiotechnologyBio-pharma, bio-agri and bio-industrial products

alkali and other organic and inorganic chemicals

n chemicals, personal care and other specialty chemicals

and formulations protection chemicals

Characteristics of India Chemical Industry

High domestic demand potential

Focus on new segments such as specialty and

knowledge chemicals

Gujarat and Maharashtra

have emerged as most favored

zones

Fragmented industry

Increase in focus on R&D

75Source: KPMG, TSMG

Chemical Sector

India scenario: Chemical Exports & Imports

Exports have been rising over the year but still India is a net importer of chemicals

• Total exports of chemicals grew from USD 3.5 billion in FY03 to USD 16.1 billion in FY12, a CAGR of 18.7 per cent

• India has been a major importer of chemicals; the sector made up 5 per cent of India’s total imports in FY12

• Total imports of chemicals grew from USD 3.7 billion in FY03 to USD 24.0 billion in FY12, a CAGR of 23 per cent

• During FY13 organic chemicals constituted 70 per cent of India’s total chemical exports followed by dyes &

Chemical exports of India (USD billion) India's chemical imports (USD billion)

During FY13, organic chemicals constituted 70 per cent of India s total chemical exports, followed by dyes & dyestuff at 11 per cent

1012141618

7.79.1

11.2 11.413

16.1

Chemical exports of India (USD billion)

CAGR: 18.7%

15

20

25

11.3

15.6 1619.5

24

India s chemical imports (USD billion)

CAGR: 23%

02468

10

3.5 4.1 5.16.3

7.7

0

5

103.7 4.7 6.1 7.5 8.8

76

Chemical exports of India (USD billion) India's chemical imports (USD billion)

Source: FICCI, Department of Chemicals & Petrochemicals – Gov. of India

3.4.3 Chemical Industry:

Gujarat Scenario

Chemical sector

Gujarat: The hub for chemical industry

Gujarat, the hub of chemical industry in India, accounts for 62 % of India’s petrochemical production, 53% of other chemicals production and 18% of India’s chemical exports

• The chemical industry in Gujarat is a significant component of State's economy with revenues at ~ INR 4,50,000 crore in 2012

• Gujarat's chemical & petrochemicals industry comprises of about 500 large and medium scale industrial units, about 16,000 of small scale industrial units and other factory units and provides 16% of employment

• Government support, world class infrastructure, strategic location, availability of skilled workforce and raw material makes Gujarat a preferred location for chemical plants

• About 6600 chemicals & petrochemicals are produced in the state• Largest supplier of bio fertilizers, seeds, urea and other fertilizers • Also Gujarat has taken the lead to promote environment friendly practices through Effluent Treatment Plant;

currently 28 such plants a re operational and further 6 are proposed

35%

51%62% 65%

80%

50%60%70%80%90% Pharmaceut

icals

Chemicals

21%

Regional concentration of basic chemical industry

Gujarat35%

0%10%20%30%40%50%

Industry wise contribution of

Petrochemicals

Plastic Industry

53%

6%

6%

5%

21%Maharashtra

UP

Tamil Nadu

Madhya Pradesh

78

Industry wise contribution of Gujarat to India, 2012

Salt Processing

9% Others

Source: FICCI, Department of Chemicals & Petrochemicals – Gov. of Gujarat; GPCB

Chemical sector

Gujarat: Chemicals & Petrochemicals Complexes

Ch i l

Some of the largest chemicals & petrochemicals complexes of World are present in Gujarat

Refineries

(87MTPA)

Chemical and LNG terminal

(15MTPA)

Petrochemical

complexes

Chlor Alkali plants

(1MMTPA)

Soda Ash plants

(3 MMTPA)

Chemical Fertilizer

plants

Agro Chemicals

IOCL

PetronetLNG

terminal Dahej

IPCLGACL

IPCL

Tata Chemicals

Gujarat Heavy

IFFCO

UPL

Baroda Agro

A i t

RIL LNG Hazira RIL

UPL

Shriram

yChemicals

Nirma

Saurashtra

GSFC

Aristo Biotech

Super Crop Safe

Essar

Chemical port

terminal Dahej

ONGC

Atul

Indian Rayon

SaurashtraChemicals

Dhrangadhra

Chemicals

GNFC

KRIBHCO

Ltd

Excel Crop Care

79Figures indicate capacities in MTPA as of 2012Source: Department of Chemicals & Petrochemicals – Gov. of India, MOPNG

Chemical sectorGujarat: Petroleum, Chemical & Petrochemical Investment Region (PCPIR)

PCPIR is a specifically delineated Investment Region planned for the establishment of production facilities for petroleum, chemicals and petrochemicals

• Spread over 453 sq km of brown-field area in the coastal belt of Gulf of Khambhat in Bharuch District Vi i it f th i ti GIDC h i l t t i Jh di A kl h P li d it h i l t• Vicinity of other existing GIDC chemical estates, viz. Jhagadia, Ankleshwar, Panoli and onsite chemical port terminal & LNG terminal at Dahej

• The proposed SEZ in PCPIR includes, petrochemical and downstream petrochemical industries, synthetic organic chemicals, industrial gas producing industry, packaging industry, shipbuilding/fabricating unit and other small chemical industries

Abundance of Natural Resources

Location

Quality Resources

Export Promotion Measure PCPIR:

Unique

Legal F k

Well Defined I f t t

SellingProposition

80

FrameworkInfrastructure

Source: Gujarat Industrial Development Corporation

Chemical sector

Gujarat: PCPIR Advantage

Export promotion measures

Well established infrastructure

Notified and Operational Dahej SEZ

Regulatory Framework

Gujarat SIR Act, 2009

Gujarat SEZ Act 2004

Availability of natural resources

Concentration of measuresChemical port terminal and chemical storage

facility at Dahej

Operational Dahej SEZ

Formally approved Ceramics SEZ at

Jhagadia

Quality work force peaceful

Gujarat SEZ Act 2004

Notified Area Authority under GIDC Act, 1962

Gujarat Town Planning and Urban Development

Act 1976

Petroleum, Chemical and Petrochemical estates across the

district

Rich natural resources and feedstockforce, peaceful

labour, least man days lost

Act, 1976

Gujarat Infrastructure Development Act, 1999

and feedstock availability

Location advantage Road and rail Airport connectivity Support infrastructureLocation 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

• National Highway 8 passes through the district, connecting it with Ahmedabad (182

• The nearest airport is present in Vadodara which is 100 km away from the region

• LNG terminal, liquid fuel jetty and solid cargo jetty

• Two 220 KV power sub• The anchorage is at a distance of 5 km from the old port and 6 km from a container terminal in Jageshwar, Bharuch

with Ahmedabad (182 km) and Mumbai (362 km), along with the DMIC

• Delhi-Mumbai broad gauge railway

from the region. • Ahmedabad

International Airport is 200 km

• Two 220 KV power sub-stations at Dahej and Vilayat, three 66 KV sub-stations at Dahej, Luna and Vilayat

• Water Supply by GIDC

81Source: Gujarat Industrial Development Corporation

g , g g yline, Bharuch-Dahejrailway line

pp y yand GWSSB; Gas Supply by GGCL

Chemical sector

Gujarat: Policy Interventions

Industrial Policy 2009

Gujarat aspires to become a beacon of comprehensive social and economic development

Thrust Sectors

Manufacturing

Services

I f t t

Incentives

Various Sector specific

Subsidy on electricity duty

HR/Labour

Labour law flexibility

Industry-academia collaboration

Business Environment

Single window clearance Marketing

Infrastructure

Support for

UrbanInfrastructure

Regional Focus

FDI/NRI

duty

Up gradation of industrial estates

collaboration

support for development of

specialized institutes

support

Grievance redressal

Information centers

Physical

Industrial

•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

Licensing Policy

• Customs Duty on most Organic, Inorganic Chemicals, Pharmaceuticals, Fertilizers and other miscellaneousC t D t Customs Duty on most Organic, Inorganic Chemicals, Pharmaceuticals, Fertilizers and other miscellaneouschemicals is 7-10%Custom Duty

• On almost all chemicals the excise duty is 16% Excise Duty

82Source: Industries Commissionerate – Government of Gujarat

• VAT on most chemicals reduced to 5% in GujaratVAT Duty

Chemical sector

Gujarat: Policy Interventions

As per Industrial Policy, 2009 Government of Gujarat has developed SEZs, SIRs and Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) to encourage

the investments in chemicals sector.

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

additionaddition

Cluster Development Rehabilitation of Sick Promotion of specific pin PPP mode Units

psectors

For modernization program one can avail of 5% subsidy on the applicable interest

83

over the loan period

Source: Industries Commissionerate – Government of Gujarat


Gujarat 2017

Chemical sector

Gujarat : Vision 2017

Chemical industry in Gujarat has the potential to reach ~USD 70 billion by 2017

Contribution of Specialty and Fine Chemicals will be doubled by 2017

Development Agenda:

• Development of this sector will lead to value

Chemical centers in Gujarat

addition

• Development of linkages with user sectors andincreasing product portfolio – meet the needsof other sector (Textiles and Auto industry are Ahmedabadof other sector (Textiles and Auto industry arekey industrial users that need the developmentof specialty and fine chemicals for their growth)

• Identify competitive advantages existing within

Jamnagar

DahejBharuch

Vadodara

the State – Gujarat is one of the largestproducers of castor and guar seeds in India.Potential of application of these crops inspecialty and fine chemicals is immense

Valsad

Hazira

85

Valsad

Chemical sector

Gujarat: Proposed Interventions

• 3 speciality chemical zones to be developed in Jambusar, Padra and Dahej

New chemical zones for Specialty and Fine Chemicals

Infrastructure management• Facilitate provisioning of modern infrastructure

Infrastructure management

• Centralized waste evaluation and management institution

Efficiency – energy and water• Centralized waste evaluation and management institution.• Shift philosophy from end of pipe line to self treatment eliminating reliance on

CETPs• Industry-academia-government collaboration – to set standards and for

enforcementenforcement

• Centre of Excellence for Specialty and Fine Chemicals will be set up in Ankaleshwar and Dahej

Promoting R & D and Centre of Excellence

Ankaleshwar and Dahej

• Encouraging practices that ensures health, safety and environment• 28 Common Effluent Treatment Plant (CEPT) are operational and six are proposed

Ensuring Safety, Health and Environment

86

28 Common Effluent Treatment Plant (CEPT) are operational and six are proposed for the same

Chemical sector

Gujarat: Leading Players and Investment Opportunities

Textiles Chemicals

High Performance

Pigments and Coating

Products

ChemicalsChemicals

Engineering Polymers

oducts

Bio Refineries

Feedstock Linkages

PP Filament Yarn

Acrylic Fibres

87


Block No. 1, 2nd Floor, Udyog Bhavan, Gandhinagar, Gujarat, India - 382 010


Gandhinagar, Gujarat, India 382 010http://ic.gujarat.gov.in/Phone: 079-23252683



Block No. 4, 2nd floor, Udyog Bhavan, Gandhinagar, Gujarat, India – 382 010

http://www.gidc.gov.in/Phone: 079 23250583


Phone: 079-23250583E-mail: [email protected]

Bl k N 5 5th fl S hi l

Energy and Petrochemicals Department

Block No. 5, 5th floor, Sachivalaya, Gandhinagar, Gujarat, India – 382 010

http://guj-epd.gov.in/Phone: 079-23250771


88

3.5 Gems & Jewellery Industry

3.5.1 Gems & Jewellery Industry :

Global Scenario

Gems & Jewellery sector

Global Scenario

Given the geographic dispersion of the value chain, Gold & Jewellery Industry

is extremely global in nature

• Global jewellery sales is likely to grow at a CAGR of 4 6 per cent from USD 185 billion in 2010 to USD 230 billion inGlobal jewellery sales is likely to grow at a CAGR of 4.6 per cent from USD 185 billion in 2010 to USD 230 billion in 2015

• Accelerating economic growth in Asian countries like China and India will enhance the market potential for jewellery• Gold jewellery will ride on demand from traditional markets like India, Turkey, and China to touch USD 94 billion by

2015

344

Projected global jewellery sales (USD billion)

%

• Global jewellery fabrication output will grow at a CAGR of 5.1 percent to reach USD 95 billion by 2015

Share of key markets in global jewellerysales, by value, 2015

150200250300350

146185

230

344CAGR: 4.6%

US, 25.6%ROW, 28.4%

050

100150

2005 2010 2015E 2020EProjected global jewellery sales (USD billion)

China, 13.4%

dMiddle

Japan, 3.7%

Turkey, 3.2%

Italy, 2.7%

UK, 2.1%

91

Projected global jewellery sales (USD billion)

Source: KPMG analysis, GJEPC, McKinsey Report

India, 12.3%East, 8.7%

3.5.2 Gems & Jewellery Industry: India

ScenarioScenario


India Scenario

The domestic gems & jewellery market is estimated to be USD 40 billion and is predicted to grow at a rate of~13 percent per annum by 2015 to reach USD 45-50 billion mark.

• The sector contributes around 6 – 7 percent to the country’s GDP • It provides employment to nearly 2.5 million people with the potential to generate employment of 0.7 to 1.5 p p y y p p p g p y

million over the next five years• It is one of the fastest growing sectors and the size of the industry is expected to double in the next five years• There are more than 3,00,000 Gems & Jewellery players across the country, with majority being small players• Globally, India is considered as one of the major hubs for diamonds and jewellery manufacturing and is an

important source of supply to the world

Share of India Demand in Global Demand

important source of supply to the world• India is the largest consumer of gold, accounting for nearly 29 percent of the total world gold consumption• Gold jewellery forms around 80 per cent of the Indian jewellery market

80%

100% 29% 25% India

CAGR= 13%

–Ra

nge

on)

20

40

0%

20%

40%

60%71% 75%

Rest of world

Estim

ated

Siz

e –

(USD

bill

io 20

18

35

93

Jewellery Bar & Coins

Source: FICCI, GJEPC, Technopak Analysts, ONICRA, Millennium Post

2009 2015


India Scenario: Exports & Imports

G & J ll i th d hi h t f FOREX i I di d t d f ~15 t f thGems & Jewellery is the second highest earner of FOREX in India and accounted for ~15 percent of the India’s total merchandise exports in FY 13

• The gems and jewellery industry significantly contributes to the growth of the Indian economy• The total exports of Gems and Jewellery for FY 13 was around USD 39.03 billion, including that of cut and

polished diamonds at USD 17 41 billion gold at USD 18 28 billion and colored gemstones at USD 0 65polished diamonds at USD 17.41 billion, gold at USD 18.28 billion and colored gemstones at USD 0.65 billion

• In 2012-13, jewellery exports outperformed textiles and apparel exports by 25 per cent• Gems and Jewellery industry is highly dependent on imports of raw materials, of which rough diamonds

account for almost 50 percent of the imports

Major Destinations of Gems and Jewellery

• There is immense dependence on import of gold due to its little/ limited production in the country. This has made the industry extremely vulnerable to any regulations that constrain gold supply

• India is also one of the largest importer and consumer of silver in the world

33.20%

6.20%

Major Destinations of Gems and Jewellery Export

OECD Countries

OPEC Countries

586080

Gems and Jewellery Exports (USD billion

21.30%1.10%

38.20%Eastern Europe

Developing Countries

Others

25

02040

2009 2015E

94Source: GJEPC, Technopak Analysts, DGCI&S (Kolkata)


India Scenario: Growth and Demand Drivers

With per capita consumption almost 1/10th that of any matured market India presents a very large potential market

With the growing economy spending power of the people is also rising with aIncreasing purchasing and spending power

With the growing economy, spending power of the people is also rising with a CAGR of 17% since last 3 years, leading to growth of jewellery demand in India

Investment led There is a substantial investment demand in both jewellery bar and coinInvestment led demand

There is a substantial investment demand, in both jewellery bar and coin form, due to the great attractiveness of gold as an investment option

E t f N lIt is anticipated that large investments of about USD 1 billion in the coming

ld b d b l t il /b d hi h ld t l thEntry of New players in retail sector

years would be made by large retailers/brands which would catalyze thegrowth of the industry, set higher standards and create value across the value chain.

Traditional Domestic Tradition of buying jewellery during important festivals like Diwali andTraditional Domestic Demand

Tradition of buying jewellery during important festivals like Diwali andDhanteras and during weddings

Foreign DemandThe sector is the second largest foreign exchange earner in the Indianeconomy; contributing ~15 percent to the total export earnings of the country

95Source: FICCI, Onicra, Millennium Post

economy; contributing 15 percent to the total export earnings of the country

3.5.3 Gems & Jewellery Industry: Gujarat

ScenarioScenario


Gujarat Scenario

Gujarat has the highest share (nearly 85 percent) in the total national Jewellery production and accounts for 72 percent of the world’s share of processed diamonds. Surat has 65% share in India's diamond trade.

f h l d l• Gujarat accounts for about 80 percent of diamonds Some of the leading players in Gujarat• Gujarat accounts for about 80 percent of diamonds processed and 95 percent of diamonds export from India

• Almost 8 out of 10 diamonds in the world are processed in Gujaratprocessed in Gujarat

• 90 percent of the total diamonds in Gujarat are processed by about 10,000 diamond units located in and around Surat

• Gujarat is also internationally renowned for theGujarat is also internationally renowned for the production of unique hand-made silver ornaments (85 percent of total silver Jewellery production of India)

• A gold jewellery manufacturing cluster in

Gujarat's Gems & Jewellery sector is expected to grow at a rate of 15 percent

Ahmedabad has a productivity of around 50 gm of production /day, highest in the country

• Diamond processing and trading unit are spread across the State in cities such as

h d b d l h l d

97Source: Industries Commissionerate - Government of Gujarat, IBEF

grow at a rate of 15 percentSurat, Ahmedabad, Palanpur, Bhavnagar, Valsadand Navsari


Gujarat Scenario: Value Chain Analysis

Gujarat has widespread presence across the whole of value chain

Mining Gemstone ProcessingJewellery

ManufacturingJewellery Retailing

Diamond, Gemstone, Gold, Platinum

Cutting & Polishing Design & Fabrication Studded Jewellery

Expanded Diamond Value Chain

Mining Sourcing Rough Trade Processing

G j ’ P i h G & J ll V l Ch iGujarat’s Presence in the Gems & Jewellery Value Chain

Mining Processing Fabrication Consumption

Diamond

GoldGold

Platinum

Silver & Others

98Source: Industries Commissionerate - Government of Gujarat

Established Presence

Emerging Centre/ Market

Not Applicable inGujarat


Gujarat Scenario: Growth Drivers

The growth of this industry is primarily attributed to the increase in the demand driven by expansion of the middle class and support from the government in increasing the competitiveness

Low Labour Cost

F bl

• Gujarat has identified Gems &Jewellery sector as one of thethrust areas for development

• One of the important factors

Growth Drivers of

Availability of skilled

craftsmen

Favorable Government

Policies

• One of the important factorscontributing to the growth has beenthe development of SEZ’s by thestate

• A single product SEZ speciallyGems & Jewellery Sector in Gujarat

Cost Competitive-

Development of SEZ’s and

Gems &

• A single-product, SEZ speciallydedicated to gems and Jewellerywith available infrastructure,Gujarat Hera Bourse (GHB), islocated very near Surat cityCompetitive

nessRising

disposable income & consumer

Gems & jewellery

Parks

ocated e y ea Su at c ty

• There is also a multi product SEZ,Surat SEZ (SurSEZ), which also aidsthe growth of gems and jewellerysector

99

consumer demand

Source: Industries Commissionerate - Government of Gujarat


Gujarat Scenario: Gems &Jewellery Clusters

To leverage on the progressive industrial sector of the state, the government has initiated a “Cluster development” model to increase cost competitiveness and efficiency through collaborative efforts and

knowledge sharing

Region Activity

Surat Diamond Processing, Jewellery

Gems & Jewellery Clusters in Gujarat

Palanpur Diamond Processing

AhmedabadDiamond Processing, Gold & Silver Jewellery

Bhavnagar Diamond Processing

Navsari Diamond Processing

Rajkot Gold & Silver Jewellery

Khambhat Gemstone (Agate)

Valsad Jewellery

S i h l di d i l i h ld d i ll d “A Silk Ci S kli i h Di d ”

100

Surat is the largest diamond processing cluster in the world and is called “A Silky City Sparkling with Diamonds”

Source: Industries Commissionerate - Government of Gujarat


Gujarat Scenario: Assaying & Hallmarking Centers in Gujarat

Center Name District

Gujarat Gold Centre Ahmedabad

Assaying & Hallmarking centres in Gujarat

Kesar Hallmarking Centre Ahmedabad

MMTC Ltd. Ahmedabad

Parkar Gold AhmedabadKachcha

Parkar Gold Ahmedabad

Shradha Assaying & Hallmarking Centre

Ahmedabad

Gujarat Gold Centre Vadodara

Ahmedabad

VadodaraRajkot

Gujarat Gold Centre Vadodara

National Center for Hallmarking

Surat

VG Gold Assaying &

Surat

VG Gold Assaying & Hallmarking Centre

Rajkot

Rajkot is internationally known for its unique hand made gold and silver ornaments which constitute 85% of


the total jewellery production in India”


Gujarat Scenario: Educational Infrastructure

Labour cost per carat in USD

Entrepreneurship merged with skilled craftsmanship is the key enabling factor for Gems & Jewellery sector in Gujarat

Major institutions offering courses specific to

120

140

160

Labour cost per carat in USDMajor institutions offering courses specific to Gems & Jewellery

Indian Diamond I tit t (IDI)

National Institute of Fashion T h l

National Institute f D i (NID)

60

80

100Institute (IDI),

SuratTechnology

(NIFT), Gandhinagar

of Design (NID), Ahmedabad

Graduate and Diploma Level programmes offered

0

20

40

dia

ium ina

rael

p p gby Indian Diamond Institute include:

• Diamond Sorting and Grading

• Gemology

Guj

arat

/In

Ant

wer

p/Be

lgi

Shen

zen/

Ch

Tela

viv/

Isrgy

• Jewellery Designing, Manufacturing and Appraising

• Jewellery Business Management

• Gem Diamond Identification and Grading

102


Gujarat Scenario: Government Initiatives and Interventions (1/2)

Gems & Jewellery is an important sector in Gujarat due to its immense contribution to the state’s economy and employment of a sizeable population

Additional interest subsidy at 3% to a maximum f INR 1 5 illi f t t hi h th 5

• The objectives of the schemes

Policy Support for fostering growth in Gems & Jewellery Sector

of INR 1.5 million for a term not higher than 5 years

Assistance for setting up Hallmark Certification centers for Jewellery and testing centers for

Gems

are :

To promote new centers forGems & Jewellery activitiesin the State

Support for setting up of Training Institute for the development of Gems & Jewellery sector

Scheme for supporting safety measures and protection from occupational hazards

Focus on studded jewelleryto expand processing basefor higher value

Establish a strong presenceprotection from occupational hazards

Assistance of viability gap funding of 20% of the total project cost to private developer intending

to develop Jewellery park on PPP basis

g pof Gujarat Gems & Jewelleryindustry in Internationalmarket



Gujarat Scenario: Government Initiatives and Interventions (2/2)

The government has implemented such an 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.

100% FDI through automatic route

Exemption for rough coloured precious gems from custom dutyp g p g y

Duty free import of consumables for metals other than gold and platinum up to 2% on Freight on board

Duty free import entitlement for rejected jewellery up to 2% of FOB value of exports

Import of gold of 18 carat and above under the replenishment scheme

No import duty on polished diamonds

The limit value of jewellery parcels for exports through foreign post office raised from $50k to $75k

Establishing ‘ Diamond Bourses’ to make India and international diamond trading hub


3.5.4 Gems & Jewellery Industry:



Gujarat Scenario: Investment Opportunities

Gems and Jewellery is one of the fastest growing Industries in the country. Following are some of the identified projects to venture:

Jewellery Fabrication &Retail

Infrastructure Development Tools &Machinery

• Diamond studded jewellery

• Gold jewellery• Silver jewellery

• Jewellery Parks• Modern Jewellery units• Educational institutes

focusing on Gems &

• Diamond blade

• Diamond cutting & tools

d l h l• Platinum jewellery• Rings• Studded Gold & Silver

jewellery chains and

Jewellery sector• Establishing Hallmark

Center• Gemology institute with

• Diamond tools & wheels

• Gem cutting &

processing unitj yornaments

• Hand made Gold and Silver ornaments

testing facility • Technology Upgradation

106






Phone: 079 23252683Phone: 079-23252683






Phone: 079-23250583


107

3.1 Pharmaceutical Sector

108

3.1.1 Pharmaceutical Sector :

Global Scenario

109

Pharmaceutical Industry

Global Scenario

The world pharmaceutical market was worth approximately USD 1094 billion in 2013

14.7%5.9%

Breakdown of World Pharma Market (2012)

USA & Canada

• Riding on the wave of advances of science and technology, the research based pharma industry is entering an exciting new era in medicines development.

Gl b l k f i di i h i l USD11.7% Europe

Japan

• Global market of generic medicines was worth approximately USD 274 billion in 2013

• 17 high growth emerging markets including China, India, Brazil, Russia and Mexico will contribute 28 per cent of total spending by 2015 up from 12 per cent in 2005

41%[VALUE]

Africa, Asia (Excluding Japan) and Austrailia

Latin America

of total spending by 2015, up from 12 per cent in 2005

• Major pharmaceutical companies include Pfizer, Novartis, Sanofi, Merck and Co., Roche, GlexoSmithKline, Abbot, AstraZeneca, Amgen and Eli Lilly & Co.Lilly & Co.

On an average out of 10,000 substances synthesized in laboratories, only one or two will successfully pass all phases of development and enter the market as medicine

R & D in Pharmaceutical

When a new active substance is synthesized in laboratory, it takes average 12-13 years for it to clear all stages to become a marketable product

For a research and development of a single medicine and unveil to the

110Source: The Pharmaceutical Industry in Figures by EFPIA; IMS MIDAS, 2013

market, approximately USD 1.5 billion is spent


India Scenario

111


India Scenario

India is among the top five pharmaceutical emerging markets with healthcare market expected to reach approximately USD 31.59 billion by 2020

• Domestic market for the Financial year 2013-14 was i t l USD 13 18 billiapproximately USD 13.18 billion

• Domestic market of generic drugs for the financial year 2013-14- stood at USD 11.0 billion

• India stands 3rd in the world in terms of volume of production.

• India’s share in World Generic Market is 4%. (excluding India’s domestic market).

Indian Pharma Industry Enablers

Competent Workforce Information & Technology

Cost Effective Chemical Synthesis Globalization

112Source: FDCA

Legal & Financial Framework Consolidation


India Scenario

• Indian pharmaceutical industry covers very wide spectrum of products ranging from simple healthcare pills to intricate products like vaccines, r-DNA products and hi-tech cardiac stents etc.

• Pharma sector in India is highly fragmented with over 20,000 registered units; which meets 70% of domestic demand

• India houses around 8000 manufacturing units, producing approximately 1500 APIs (Active Pharmaceutical Ingredients)

• India is likely to offer a USD 8 billion market for MNCs across the world

• India’s exports stood at USD 15.04 billion in 2013-14, which is approximately 4% of the global share. Over 55% exports of India are to highly regulated markets

• Pharma products are exported to over 200 countries with largest destination being US followed by UK

Pharmaceutical R&D and Product Value Chain

Research and Development Drug Substance Production Formulated Drug Production

Pre-Clinical Development

Clinical Development

Primary Process Development

Drug Substance Production

Dosage Form Development

Dosage Form Production

Discovery Research

Research and Development Drug Substance Production Formulated Drug Production

Packaging Assembly Logistics

113Source: Report by Corporate Catalyst India; DGCIS

Development Production


Gujarat Scenario

114

Gujarat – The Pharmaceutical Hub

70% of India’s 50% of India’s

109 years ofexcellence

Only manufacturer of Doxorubicin HCL

Liposome injection in the World at present

80% of world’s Isoniazid (used for treatment of

tuberculosis) is produced in Gujarat

Only manufacturer of Vitamin C and

Dapsone in India

70% of India s cardiac stents

manufactured is from Gujarat

50% of India s intraocular lenses

manufactured is from Gujarat

~40% of India’s machinery for pharma sector manufactured is

from Gujarat

58% India’s orthopedic implants manufactured

is from Gujaratfrom Gujarat

40% of Produces 35% of 33% of India’s pharma3324 manufacturing CRAMS

Companies India’s Diagonistic

Re-agentsector turnover; 28% of India’s pharma export

Gujarat, an established manufacturing base for bulk drugs and formulations, is poised to capture global

licenses; Home to ~40% of CRO in the country

115

opportunities to become a Global Pharmaceuticals Hub

Pharmaceutical Sector

Gujarat: Facts

The State manufactures and exports different dosage forms including generic drugs, intricate vaccines, r-DNA products, cytotoxic drugs external preparations sex hormone drugs small

Total sales units in Gujarat are 30,335* ; out of which 48% units are retailers and 42% are wholesalers and rest 10% serve in

3 8

8

Manufacturing Units in Gujarat*

preparations, sex hormone drugs, small and large volume parenteral, APIs, hi-tech cardiac stents bio-pharmaproducts etc

both categories

639

378

Gujarat is the first state in the country to issue license through I.T. application. 10 states have adopted

L. M. Pharmacy College, India’s first pharmacy college, was established in Gujarat in 1947. B. V. Patel PERD Center, NIPER, MS

2299

this model. University are other major pharmacy colleges in the state.

Allopathic Ayurvedic

Cosmetics Homeopathic

117Source: FDCA; IBEF* Data as of 1st July, 2014


Pharma Clusters in Gujarat (1/2)

Ahmedabad cluster

Manufacturing Base:

Formulations

APIs

Vadodara cluster

Manufacturing Base:

Formulations

Biogenerics

Biologicals

Contract manufacturing

Biogenerics

Bharuch and Ankleshwar Vapi/ Valsad cluster

cluster

Manufacturing Base:

APIs

Formulations

Manufacturing Base:

Formulations

APIs

Device and Diagnostics

118

Vaccines

g


Pharma Clusters in Gujarat (2/2)

Characteristic of Pharma clusters in Gujarat

Location Existing Products

Export Potential

Market-based/ Resource-based/

Infrastructure-based

Potential future products

Infrastructure based

Ahmedabad • API• Finished Dosages

High Market andInfrastructure

• BiologicalManufacturing

• Biological Products• Contract

Manufacturing

• Medical Devices• CRO• CRAMS

Vadodara • Finished Dosages High Market and • API• Bio-generics Infrastructure • CRAMS

• BiologicalManufacturing

Bharuch & • APIs High Resource • APIs for globalAnkleshwar • Formulations

• Vaccines

g gcompanies

Vapi & Valsad • APIs• Formulations

High Resource • Intermediate & Finished Dosages

119

Formulations• Device and Diagnostics

Finished Dosages

Source: KPMG Analysis

Pharmaceutical SectorSpecial Economic Zones (“SEZ”) and Special Investment Regions (“SIR”)

Zydus Infrastructure Pvt. Ltd.Location: AhmedabadArea: 49 hectareLikely activities: Pharmaceuticals

CPL Infrastructure Pvt. Ltd.Location: AhmedabadArea: 122 hectareLikely activities: Biologicals, APIs & PharmaceuticalsPharmaceuticals APIs & Pharmaceuticals

Dishman InfrastructureLtd.Location: AhmedabadArea: 106 hectare

HBS Pharmaceuticals SEZLocation: BharuchArea: 125 hectareLikely activities: R&D Bulk

SEZs

SIRsArea: 106 hectareLikely Activities: Bulk drugs

Likely activities: R&D, Bulkdrugs, Intermediates & Contract manufacturing

Pharmaceuticals are identified as a potential

Dahej SEZLocation: Dahej Area: 1125 hectares identified as a potential

sector in 3 SIRs

Name District Area (sq km)Industrial Parks:

Location: Dahej Area: 1125 hectaresPharma related activities: APIs, Intermediates, bulk drugs and various pharmaceutical formulations

( q )

Changodar Ahmedabad 319

Viramgam Ahmedabad 190

Gujarat Pharma Techno Park

Location: Ahmedabad

Area: 17.07 hectare

120

Okha Jamnagar 206

Source: GIDC, GIDB

Likely activities: Pharmaceutical


Gujarat: Major Companies (1/3)

■ Key business areas - Finished formulations, APIs■ Key therapeutic areas - CVS, CNS, diabetology, gastroenterology, oncology, pain management, anti

allergic■ Key research areas - generics, process development and complex generics■ Has 23 manufacturing plants across the world and reported revenues of USD 2 billion during 2012-13.

■ Key business areas – Finished formulations, APIs, fine chemicals, animal health and cosmeceuticals

■ Sun Pharmaceutical Advanced Research Centre (SPARC) is situated in Vadodara (Baroda). Manufacturing plants in Gujarat are located at Halol, Ankleshwar and Vadodara.

■ Key therapeutic areas - CVS, CNS, women health, respiratory, pain management, anti infective, oncology, nephrology, neuroscience and dermatology

■ Key research areas – New molecular entities, novel drug delivery system, identification & validation of therapeutic targets, therapeutic proteins and vaccines by r-DNA technology

■ Leader in Cardiology, Gynecology, Gastro Intestinal and Respiratory therapy segments■ Formulations business in India posted sales of USD 387 2 million in 2012 13■ Formulations business in India posted sales of USD 387.2 million in 2012-13■ Launched more than 30 new products in the key markets of Asia Pacific, Africa and Middle East during

2012-13

■ Key business areas - Finished formulations and APIsy■ Key therapeutic areas - Cardiovascular, central nervous system, gastro-intestinal, diabetology, anti

infective and pain management■ Key research areas - Discovery research, generic drug development, new drug delivery system and

value added generics■ Research Plant is located in Bhat Village in Gandhinagar with investment of USD 40 million

121Source: IBEF; FDCA


Gujarat: Major Companies (2/3)

■ Key business areas – Formulations, APIs, hospital products■ Key therapeutic areas - CVS, gastro intestinal, analgesic, anti-

infective, antidiabetic, vitamins, haemostatic, immunomodulators■ Key research areas - New drug discovery, new drug delivery, plant tissue culture, genetic

engineering, biosynthesis, phytochemistry

■ Key business areas – Finished formulations APIs contract research

■ Cadila Pharmaceutical has strategic collaboration with Europe based pharma companies including Pergamum AB and Bactiguard from Sweden

■ Key business areas Finished formulations, APIs, contract research■ Key therapeutic areas - CNS, CVS, diabetology, oncology, gastroenterology, r-DNA, urology and pain

management■ Key research areas - NDDS for formulations, API capabilities for Anti cancer agents, oral

formulations, NDDS and drug delivery mechanisms■ As of 31st of March 2013, Intas has grown to be a ~ USD 650 million organization with a revenue

growth over 30% CAGR over the last 5 years and a profit growth of ~50% CAGR over the same period■ Intas has developed 10 manufacturing facilities globally

■ Key business areas - APIs, intermediates, fine chemicals, quaternary compoundsy , , , q y p■ Specialised services - Contract manufacturing and contract research■ Key research areas - Research for contract manufactured products, pilot studies of new

molecules, process optimisation and improvement, research for in-house applications (APIs, intermediates, fine chemicals)

■ Provides a range of solutions at locations in Europe and China besides India

122Source: IBEF; FDCA


Gujarat: Major Companies (3/3)■ Key business areas – Finished formulations APIs Chemicals herbal nutraceuticals and veterinary■ Key business areas Finished formulations, APIs, Chemicals, herbal nutraceuticals and veterinary■ Key therapeutic areas -

CVS, gynecological, gastrointestinal, NSAIDS, antibacterial, antihistamine, hypoglycemic, vitamins, antiulcerant

■ Key research areas - Chemistry and synthesis, formulations development, contract/Collaborated Research

■ Key business areas – APIS, Branded generic medicines■ Key therapeutic areas - Dermatology, hormones, controlled substances, oncology and modified release

products

■ Vadodara based plant has the largest fermentation capacity in India■ The company has a state of the art Research Centre at Vadodara.

products■ Key research areas - Process research development, formulations development, analytical research

and clinical research■ The Ankleshwar API manufacturing facility, which is approved by the US-FDA, MHRA, KFDA and

WHO, caters to the regulated markets of US, Europe and Japan

■ Key business areas – APIs, Generic drugs, injectables (LVP, SVP)■ Key therapeutic areas- Anesthesia, critical care, renal care, enteral nutrition and oncology■ Key research areas - Product development, formulation studies, method development and validation

and stability studies■ Having presence across 100 countries, the company manufactures and markets products across

multiple markets

■ Key business areas – Generic drugs and OTC (Over-the-Counter Drugs), APIs ■ Key therapeutic areas- CNS, respiratory, oncology, pain women's health therapeutic areas, biologics■ Key research areas - High-barrier generics, NTEs (New Therapeutic Entities), CNS (Central Nervous

System)

123Source: FDCA

System)■ The Teva Sanand OTC facility represents a critical component of PGT Healthcare (headquarters in

Geneva), Teva’s international partnership and joint venture with Procter & Gamble.


Gujarat: Educational Infrastructure

ll f h h d b d

Education / researchinstitutes

Research and

L M College of Pharmacy, Ahmedabad Institute of Pharmacy - Nirma University, Ahmedabad National Institute for Pharmaceutical Education and

Research (NIPER) - Ahmedabad Faculty of Pharmacy, MS University, Vadodara

development

Manufacturing

Zydus Cadila Healthcare Ltd. Claris Life sciences Ltd. Cadila Pharmaceuticals Ltd. Intas Pharmaceutical Ltd. Sun Pharma

Torrent Pharmaceuticals Ltd. Dishman Pharmaceuticals Abott LaboratoriesWyeth Jubilant Organosys

Marketing and exports

Contract research organizations

Lambda Therapeutics Quintiles Research (India) Private Limited Kendle INC Research Thermofisher Biopharma Services (i) Pvt. Ltd. Synchron Research Services Private Limited Synchron Research Services Private Limited B A Research India Limited

Provisional Intake Capacity of Pharmacy Colleges in Gujarat (2013-14)

Govt./GIA or Self Financed

No. of Colleges

Intake Capacity

Govt./GIA 4 235

Self Financed 78 4890

124Source: The Admission Committee for Professional Courses

Self Financed 78 4890

Total 82 5125


Gujarat: Government Policies and Initiatives (1/2)


Promotion of Establishment of

National Institute Presence of

Government Initiatives

Scheme for assistance to Mega / Innovative

projects

Interest Subsidy to MSMEs

generic drugs by giving them

preference in Government

purchases

for Pharmaceutical Education and

Research (NIPER) for Human resource

development

Presence of Pharmaceutical

Export Promotion Council

(Pharmexcil)

Venture Capital Assistance for skill enhancement and

Establishment of Gujarat Genomics Initiative, Genetic

The State has allowed setting up

of Special Economic Zones in

Incentives to encourage R&D in the sector in termsp

Assistance up-gradation programs

Initiative, Genetic Diagnostic centers

and Gene Banks

the sector which will boost

pharmaceutical investments

the sector in terms of various tax

benefits

I T application

Financial Assistance for improving

industrial infrastructure

Support to R&D institutes

For quick disposal of various

documents like CoPP, NCC and FSC, FDCA has

started the process

Establishment of Center of

Excellence for Clinical Research

and various sectors f b h l

I.T. applicationfor issuance of manufacturing license, sales license and

product license i l d b

125Source: Gujarat Industrial Policy 2009

infrastructure started the process of I.T. application of biotechnologyimplemented by

FDCA


Gujarat: Government Policies and Initiatives (2/2)Graded interest subsidy for five years New Industrial Park will be providedGraded interest subsidy for five years

at 7% for MSMEs and 2% for large industries having an actual

investment up to INR 100 crore (USD 16.67 million)

New Industrial Park will be provided incentive of 50% of total expenditure up to INR 20 crore (USD 33.33 million) for core infrastructure development within

the Industrial Park

Interest Subsidy

Assistance for core

infrastructureSubsidy infrastructure

Scheme for Assistance to

Manufacturing

Assistance for Centre of Excellence

(CoE)

Assistance for setting up the core facilities

Sector-2013

(CoE)

Assistance up to 80% of the total expenditure up to INR 10 crore (USD 16.67

Assistance of 70% of the total expenditure including recurring

di f 3 INR 20

126Source: Scheme for Assistance to Manufacturing Sector-2013

expenditure up to INR 10 crore (USD 16.67 million) for the cost of core facilities

needed

expenditure of 3 years up to INR 20 crore (USD 33.33 million) for national

level CoE


Globalization model for Gujarat’s Pharmaceuticals Industry

127Source: KPMG Studies


Gujarat: Emerging Areas

• Enhanced level of investment in R&D by local industry to provide research-driven and high value services

• A large pool of patients and hospitals

WHO GMP complaint and internationally accredited manufacturing facilities to

augment demand for contract f

Contractmanufacturing

ContractResearch and

Clinicalconducting clinical research at economical cost

manufacturingresearch

Among the leading states in the V i

Sound base of diagnostic kits manufacturing; t t t ib t 35% f th ti l

Diagnostic Kit d production of vaccines and therapeutic

devicesVaccinesstate contributes ~35% of the national

productionKits and Devices

The State Government of Gujarat has identified Biotechnology as most potential tool for development and has formed a dedicated department for R&D in the sector, Gujarat State

h l

Medical device companies in Gujarat are competent enough to take care of all critical aspects like biocompatibility, toxicological &

stability testing, validation process as well as d i d d l t

Biotechnologyproducts

Medicaldevices

Strong base of Pharma Retailing in the state

BioTechnology Mission design and development.

• Strong base of pharma machinery production in the statePharma Pharma

128

with over 18,000 retail stores present • ~40% of India's pharmaceutical machinery is produced in Gujarat

retailing machinery


Gujarat: Investment Opportunities

• Contract manufacturing organisation (CMO)

• Manufacturing of ayurvedic preparations

• Manufacturing of new dosage forms like patches

• Manufacturing of active pharmaceutical ingredient

Manufacturing• Manufacturing of recombinant

DNA based products

• Manufacturing of

• Manufacturing of allopathic products

M f t i f

• Manufacturing of cosmetic products

intermediates and fine chemicals

• Manufacturing of medical devices

• Manufacturing of biopharmaceuticals

• Manufacturing of oncology products

• In Research and Development, opportunities for investment lies in Contract research organisation(CRO), Clinical research, Genetic engineering and Setting of R&D centres & CoEs

129

( ), , g g g

• There are opportunities for investment in Retail Stores and Pharmacy Chain too.


FDCA: Food and Drugs Control Administration

XLN is a software for transparent and speedy disposal of various Licensing applications and reducing the time lag between the Collection of Samples to declaration of Results to dissemination of information to stake holders.

Daily Statistics can be checked

• End-to-end online system. No physical file required.

• Auto reminder for renewal of licenses• Centralized approval system for licenses

Gujarat model replicated in 10 states and declared as rapid roll out for all states by DeiTY GoI

be checked • One database accessed by states• Single SignOn for multiple states

Gujarat model replicated in 10 states and declared as rapid roll out for all states by DeiTY, GoI.

• Food and Drug Laboratory (FDL) – Vadodara and Patan; Regional Food Laboratory - Rajkot and Bhuj can carry out i f All hi D A di D H hi D C i F d A i l

FDCA – Laboratory Capabilities

testing of Allopathic Drugs, Ayurvedic Drugs, Homoeopathic Drugs, Cosmetics, Food Articles.

• These laboratories are equipped with state of the art testing facilities AAS, Spark emission, spectrophotometers, HPLC with Auto Sampler, Gas/Liquid chromatography, Spectrophotometers, FTIR

• FDCA is equipped with Mobile Drug Testing Lab having key sophisticated instruments like Raman

130

Spectrophotometer, Near Infrared, XRS (X-Ray Spectrometer). These Mobile Labs (India’s first Mobile Drug Testing Lab) have facility of detecting any spurious drugs on spot.


FDCA: Awards and Accolades

Award for Swarnim Swanthah Sukhaya Project –2012 in Category “To make more competent

and incorruptive system of public

C S I - IT Excellence Award 2012 (Health – Infra &

Solutions)Solutions)

National e-Governance Gold Award 2013, by Government of IndiaGovernment of India

e-INDIA Gold Award in Health Sector, Hyderabad, 2013

Selected for National Rapid Roll-Out Programmein 2013 by DeiTY, Government of India

, y ,

131

in 2013 by DeiTY, Government of India


Health and Family Welfare Department

Health and Family Welfare Department7th Floor, Block 7,

Sardar Patel Bhavan, Sachivalaya,Gandhinagar, Gujarat, India - 382010g , j ,

http://www.gujhealth.gov.in/Phone: 079-23251401


Food and Drugs Control AdministrationBlock No 8, Dr. Jivraj Mehta Bhavan, Gandhinagar, Gujarat, India – 382010

http://www.gujhealth.gov.in/food-and-drug-control-administration.htm

Phone: 079-23253417


132

3.7 Electronics & System Design

133

ESDM Industry

India Scenario – Electronics Demand & Production

400

Projected demand-supply gap in electronics industry (USD billion)

wth

e

Rapidly increasing purchasing power of burgeoning middle class

45 125

400

20 42 104nd G

row

ardw

ar Strong growth in electronics consuming sectors such as

Automotive, Telecom, Medical Devices etc. 45 20 42

FY09 FY14 FY20

Total DemandDomestic Production (at current CAGR)D

eman

nics

Ha

Government policy frameworks for increased digitization

( )

India is poised to be a USD 400 billionElectronics Hardware market by 2020.na

ble

DEl

ectr

o

Increased utilization of STBs, LEDs, Electronics Equipment

etc

Sust

aifo

r E etc.

Huge IT & ITeS industry, growing at a id li k

Gap between current and expected domesticproduction presenting significantopportunities for investment

134

rapid click opportunities for investment.

Sources : India Electronics & Semiconductor Association

ESDM Industry

Policy, Interventions and Initiatives

( / )Assistance provided by Central Government (1/2)

National Policy on Electronics“ l b ll l d d f dVision 2020: “To create a globally competitive electronics design and manufacturing industry to meet

the country’s needs and serve the international market”

Electronics Manufacturing Cluster Scheme

(EMC)

Modified Special Incentive Scheme

(M-SIPS)Semiconductor FAB Electronics

Development Fund

Human Resource Development and

Skilling

-2500 PhDs in

-Subsidy upto USD 10 Mn per 100 acres

-Target 200 clusters by 2020

-Substantial Capex Subsidy of 20-25%

-Central Taxes and Duties reimbursements

-Leading Players expressed interest

-Two FABs approved

-USD 2 billion fund for Innovation, IP and R&D funding

2500 PhDs in electronics by 2020

-Electronics and Telecom Sector Skill Council

-Skill Development for

135

p1 million persons

Sources : National Policy on Electronics

ESDM Industry


( / )

• 25% of capital expenditure if the ESDM unit is in non-SEZ and 20 % of capital

Assistance provided by Central Government (2/2)

Modified Special Incentive Package Scheme (M-SIPS)

expenditure if the ESDM unit is within SEZ. This capex subsidy is available forinvestments made within 10 years from the date of approval of the project.

• Reimbursement of CVD/excise on capital equipment for non-SEZ units.

R i b t f t l t d d ti (lik t d ti i d tiPolicy notified by Government of India

• Reimbursement of central taxes and duties (like custom duties, excise dutiesand service tax) for 10 years in select high- tech units like Fabs,Semiconductor Logic and Memory chips, LCD fabrication.

Grant-in-Aid provided under

• Financial assistance of upto ~USD 16 thousand per cluster for development ofelectronic manufacturing clusters by MSMEs

provided under scheme for

supporting MSMEs in Electronics Sector

• Financial assistance of upto ~USD 2 thousand for reimbursement of expensesfor testing and certification required for export

• Financial assistance of upto ~USD 1637 for reimbursement of expensesrelated to compliance with Indian Standards

136Sources : National Policy on ElectronicsUSD 1 = INR 61.09 as on 3rd Aug, 2014

related to compliance with Indian Standards

ESDM Industry


Assistance provided by Government of Gujarat

Assistance of up to 25% of the project cost to EMC SPVs in the Greenfield subject to a ceiling of • Special Scheme to assist training Greenfield, subject to a ceiling of INR 20 crores

p ginstitutions and trainees in the ESDM industry. Incentives to MSME ESDM units

• Design City to be setup in the state and Gujarat Electronic

New units and existing units as perthe policy will be entitled forexemption of 100% VAT on productsmanufactured and sold in Gujarat fora period of five years

Mission to be Launched

To establish Gujarat as a globally-recognized hub for

the ESDM industry, the state government plans to

Creation of Intellectual Property (IP) by contributing more funds to R&D

A highly empowered ‘Single Window Clearance System’ towards the

government plans to introduce “Electronics Policy

2014-2019”.

for start-ups and development of Centers of Excellence (CoEs) in the ESDM sector

establishment of the Electronics manufacturing units in the State for

granting approvals and clearancesSetting up of at least five

Brownfield and three Greenfield Electronics Manufacturing Clusters

137

Electronics Manufacturing Clusters

Sources : Department of Science & Technology

ESDM Industry

Electronics Manufacturing Clusters in Gujarat

B fi ld EMCBrownfield EMC

Upcoming Greenfield EMC

Greenfield EMC

GandhinagarVithalapur

Ahmedabad

Sanand

Halol

Vadodara

Jambusar

138Sources : SEMT, Department of Science & Technology, Government of Gujarat

Bharuch

ESDM Industry

Destination Gujarat

Skilled Talent Availability


Strategic Electronics

Telecom Products & Equipments

Presence of Key

Enablers

Conducive Policy

Environment

Robust Physical, Social and industrial infrastructure

Telecom Products & Equipments

Industrial Electronics

Enablersinfrastructure

Automotive Electronics

Consumer Electronics

Skilled human resource and lower cost of manpower

Consumer Electronics

Electronic Components

139

manpower


Department of Science and Technology

Department of Science and Technology

Block No.7, 5th Floor,

New Sachivalaya, Gandhinagar, Gujarat, India - 382010

http://dst.gujarat.gov.in/

Phone: 079-23259999


140

Thank You

vibrant gujarat summit on manufacturing sector

Business

gujarat manufacturing

manufacturing policy

indias manufacturing

share of manufacturing

pharmaceutical sector3

chemical sector3

textile sector3

gujarat major contributor