TiE-Boston arranged a meet on September 11 to receive the delegation of industrial entrepreneurs from Gujarat, India. The delegation consisted of five members – Pankaj Patel, Ashish Dasgupta, Sudhir Vaid, Kiran Matta and Arvind Agarwal (Secretary, Gujarat Government).

Welcoming the delegates, Raj Allur, President-Elect of TiE-Boston, and Jugnu Jain, Co-Founder of Life Sciences SIG, talked about the planned outreach activities in India to bridge private equity and venture capitalists to promote a wide range of industries in various sectors such as IT (Bangalore and Mumbai), pharmaceutical and life sciences (Hyderabad) etc. and the upcoming TiE-Boston Delegation to India in December, 2006.

The leaders of the delegation from Gujarat, Pankaj Patel and Arvind Agarwal then explained the purpose of their visit. With the main goal of inviting entrepreneurs to choose Gujarat for setting up their industries, the delegation is visiting USA. It is one of several such nongovernmental delegations visiting several countries and several cities in USA. An informative video presentation followed highlighting the proactive investment climate prevailing in Gujarat. The following seven criteria were emphasized and against each, the favorable conditions prevailing in Gujarat to fulfill that criterion were explicitly explained. The criteria are:

1)    Study the track record – With 5% of India’s population, Gujarat claims 18% of the total investment in the country, thereby clearly projecting the successful track record and investment climate in the state.

2)    Always seek references – There are several global firms of repute who have set up large industrial complexes in Gujarat lending credence to the state’s claim as fertile ground for international investors. General Motors, GE Plastic, ABB, Shell, CIBA Specialty, BASF are among some of those.

3)    Look for infrastructure which can provide wings to your ideas – Gujarat has the largest coastline of 1000 miles and has 41 ports (including the largest Kandla port) which handle 25% of India’s total cargo. It has excellent network of roads, railways and airline connections. It produces 13,000MW of power with uninterrupted supply to all industries. It has a gas grid 1400 miles long supplying 34 MMCD of natural gas.

4)    Insist on productivity – Productivity is governed by pragmatism, progress, prosperity, production and profit. Gujarat has an annual industrial growth rate of 15% (as against the national average of 8%). It accounts for 14% of the country’s exports. Gujarat’s per capita development expenditure is $468 while non-development expenditure is $347. It has attracted the highest investment of $40.66B among all states in India. It also has the highest track record of implementation of all project proposals. It has the lowest number of mandays lost due to labor unrest (0.94%) and the lowest labor costs.

5)    Check out the policies – The state’s industrial policies are completely proactive for the growth of all industrial sectors, small, medium and large. Except industries in strategic areas, no license is required to start any other industry. The policies are aimed at providing state of the art infrastructure, information and facilitation, single window clearance, tax rebates for SEZ’s and minor industries, cluster development, R&D facilities and exit options for investors.

6)    Don’t compromise on quality of life – Prosperity of the people of Gujarat is indicated by the per capita income which is $630 as against the national average of $516. The literacy rate is 69.9%. The per capita consumption of power is 1175 units as against the national average of 592 units. The cellular connections are 41 per 1000 as against the national average of 26. The number of motor vehicle is 118 per 1000 as against the national average of 57.

7)    Review future prospects – Booming state economy, improved living conditions, proactive industrial policy and tax reforms, rise in gross capital formation, low penetration levels, high export potential, provision of uninterrupted power and water supply to all industries are all pointers to future prosperity. Good educational facilities provided by 39 engineering colleges (having 12,500 seats) and 49 polytechnics (having 16,500 seats) and excellent R&D facilities provided by Centers of Excellence like IIMA, NID, NIFT, EDI and PERD will all help sustained growth in the future.

In addition, petroleum products constitute 34% of state’s production; chemical and pharmaceutical 27%; textiles and apparels 9%; and metallurgical industries 9%. The atmosphere is particularly favorable for setting up pharmaceutical industries with excellent facilities of product development, clinical trials, distribution network and local market potential. The cost effectiveness of many of the drugs produced was also highlighted. Health care is provided at affordable cost and medical tourism is picking up fast.

With lower labor cost, talent pool needed to support the industries to meet global standards, ITO helped delivery model and vendor base, a fast growing market for products, highly skilled labor pool, proactive industrial policies of the government, affluent financial institutions, and adequate infrastructure, Gujarat welcomes all entrepreneurs to make it their first choice in India.

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