INDIAN STATE : GUJARAT

Information Technology (IT) and Information Technology enabled Services (ITeS)

Introduction

Over the past decade, information technology industry has become one of the fastest growing industries in India. The software and ITES exports from India grew from US$12.9 billion in the year US$ 17.7 billion in 2004-2005. Strong demand over the past few years has placed India amongst the fastest growing IT markets in the Asia- Pacific region. The Indian software and ITES industry has grown at a CAGR of 28 percent during the last five years. The industry's contribution to the national GDP has risen from 1.2 percent to a projected 4.8 percent during 2005-06.

India has a competitive advantage with respect to this sector owing to cost advantage, skilled manpower advantage, reasonable technical innovations, Indian domestic market growth and multi- country service delivery capabilities among others.

India has attracted huge investments from overseas in this sector and major leading multinationals such as Microsoft, SAP, IBM, Dell, and GE. The existing MNCs are operating in a competitive environment with global Indian players such as Infosys, TCS, Wipro and Satyam being present on the industry.

Information Technology (IT) and Information Technology enabled Services (ITeS) industry in Gujarat

The growth of software exports in Gujarat (CAGR of 47 percent between 1999-2005) indicates the potential available in the IT sector. Gujarat is emerging as a major hub for IT activity through various approved and proposed SEZs. Several IT SEZs, an IT corridor, a knowledge city, and three IT complexes, amongst others are some of the proposed initiatives in the sector signaling the growing focus on the IT sector.

Gujarat is today emerging as a preferred destination particularly for large businesses like ITES/BPO due to its excellent offerings on the following parameters:

• HR Availability and cost advantage
  
• Conducive Power and Telecom Infrastructure
  
• Suitable Real Estate Availability & its Cost
  
• Government Support and Incentives

Major Achievements of the State:

• Two Incubation centers for Software, Business Process Outsourcing and Call Centers have been set up at Infocity, Gandhinagar.
  
• MphasiS has set up a BPO unit in Ahmedabad
  
• TCS is setting up its development centre at Gandhinagar
  
• Effective Teleservices, Gandhinagar has successfully expanded its operations to Vadaodara.
  
• Sharp increase in BPO seats in 4 years - 20 fold jump, from 500 to over 11,000s
  
• Leading Real Estate Developers like EMMAR, DLF (Associated with Laing O' Rourke), Infinity have shown interest in development of IT SEZ at multiple locations.
  
• K.Raheja Corp is developing Mindspace IT SEZ in Gandhinagar.
  
• Setting up of 4 mini STPI Parks (Software Technology Park in India) each at Rajkot, Jamnagar, Bhavnagar and Surat is under active consideration.
  
• Two Infocity Towers of about 2,50,000 sq. feet each, are already completed whereas third tower is under construction

Government Support to the IT sector:

As per Draft IT policy 2006-2010, Government proposes to provide following incentives to IT & ITES Industry:

• Mega IT projects: On case to case basis, a special package of incentives may be offered for mega IT projects with investment above USD 10.7 Million.
  
• High Tech Park: IT park will be provided financial assistance at the rate of 50 percent of fixed capital investment in land, buildings, and infrastructure facilities up to of US$ 0.537 million.
  
• Exemption from Stamp Duty: the developer of IT park will be eligible for exemption from payment of stamp duty on purchase of land.
  
• Exemption from Electricity Duty: all new information technology units have been exempted from electricity duty fro 5 years.
  
• Exemption from Power Cuts: the IT and ITeS unit will be considered eligible for exemption from power cuts.
  
• Simplification of Labour Laws

Textiles and Apparel Industry

Introduction

The textile industry plays a crucial role in the Indian economy. The presence of textile sector can be felt through its share of contribution to the industrial output, employment generation and the export earnings of the country. Currently, it contributes about 14 percent to industrial production, 4 percent to the GDP and 16 percent to the country's export earnings. The textile sector is the second largest provider of employment after agriculture and provides employment to about 35 million people.

Textile exports contribute substantially to the country's export earnings. In 2004- 05 they contributed 16.24% of the total export earnings of the country. In quantum terms they were US$ 13 billion and during April to November 2005, these grew by 8.2% over the corresponding period of the previous year. The overall target for 2005-06 has been fixed at US$15.565 billion. The export basket includes a wide range of items viz. cotton yarn and fabrics, man-made yarn and fabrics, wool and silk fabrics, made-ups, and a variety of garments.

Textile and Apparel Industry in Gujarat

The textile and apparel industry in Gujarat has made rapid advancements over the years. The state of Gujarat is the largest supplier of denim in Asia. Gujarat is also a leader in fabric processing and production. The state boasts of being the largest producer of cotton in India. Availability of both natural (cotton) and man-made fibres as a basic raw material along with non-woven fabric manufacturing base makes Gujarat an ideal location for the potential investors.

The opening up of quotas coupled with incentive schemes such as Technology Upgradation Fund is providing further boost to the textile clusters of Gujarat. The investment in the State is largely from groups like Arvind, Aarvee, Raymond, Century Textiles, Gujarat Heavy Chemicals Limited, Welspun, etc.

Tourism

Indian tourism is one of the most diverse products on the global scene. India has 26 world heritage sites. It is divided into 25 bio-geographic zones and has wide ranging eco tourism products. Apart from this, India has a 6,000 km coastline and dozens of beaches. India's great ethnic diversity translates into a wide variety of cuisine and culture. India also has a large number of villages, plantations and adventure locations. India is home to a great variety of wildlife and its reserves are well known throughout the world. It also has one of the world's biggest railway systems opening possibilities for those interested in rail tourism. India also has excellent hospitals offering affordable medicare and traditional healthcare systems like Ayurveda. In addition to this India organizes numerous fairs and festivals, which are quite attractive to foreigners.

International tourist arrivals rose and stood at 3.59 million in 2005. The upward trend is expected to remain steady in the coming years. Tourism is the third largest net earner of foreign exchange for India recording earnings of US$ 5731 million in 2005, a growth of 20.2% over 2004. The sector also provides employment to a large number of manpower. The contribution of the tourism sector is around 5.9% of the GDP. The World Travel and Tourism Council (WTTC) has identified India as one of the leading growth centres in the world in the coming decades.

Tourism industry in Gujarat

Tourism is one of the most important sectors to be exploited in the coming years in the state. Activities like religious and archeological tourism, heritage, corporate tourism, coastal and beach tourism, adventure tourism, highway tourism etc are being encouraged. The State thus offers scope for investment in tourism -related activities in the form of accommodation projects, food oriented projects, amusement parks and water sports, handicraft village complexes, sea/river cruise, safari project, sports/health facility complexes, etc. The Government would also like to encourage service-oriented projects like travel operation, tour operation, transport operation, etc.

The state gives due importance to medical tourism. Gujarat offers low-cost, high value medical care in super- specialty areas of cardiology, neuro-surgery, orthopedics, and eye surgery. Other services such as dental treatment and cosmetic surgery are also offered. The investor has an advantage of qualified specialists and English speaking skilled workforce.