C&W Industrial Sector in India

R E S E A R C H A N D B U S I N E S S A N A LY T I C S G R O U P | M a r c h 2 0 0 9
I N D I A R E P O RT
INDUSTRIAL SECTOR IN INDIA
The oasis of economic growth
INDIA INDUSTRIAL SECTOR IN INDIA - The oasis of economic growth
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A RESEARCH PUBLICATION
CONTENTS
1 Executive Summary 10 Southern Corridor:

Andhra Pradesh, Karnataka, Tamil Nadu
2 Major Growth Drivers of
Manufacturing in India 15 Eastern Corridor:
West Bengal, Jharkhand, Orissa
4 Industrial Sector - The Real Estate
Perspective 19 Northern Corridor:
Himachal Pradesh, Uttarakhand,
4 Some of the Major Issues and Punjab, Rajasthan, National Capital
Concerns in Land Acquisition Region (NCR), Uttar Pradesh, Haryana
6 Major Manufacturing Clusters 24 Outlook
7 Western Corridor: 26 Conclusion

Maharashtra, Gujarat
EXECUTIVE SUMMARY
Despite the current economic slowdown and a amendments in the regulatory framework such
downsizing of India's expected GDP from 9% to as incentives and subsidies, single-window
approximately 7.1% as per the latest report by clearances, investor friendly policies by several
Central Statistical Organisation, India still state governments, etc., have provided a further
remains one of the fastest growing economies in boost to the manufacturing scenario in India. An
the world, ranking only second to China. The increased and sustained focus on the
pace of this growth has largely revolved around manufacturing sector is inevitable as well as
India's service exports, backed by a robust and advisable to achieve the projected average
ever-increasing domestic consumption. Strong growth of 9% growth during the 11th Five Year
long term fundamentals like dynamic industrial Plan (2007-2012).
environment, positive trend in outsourced
India has always enjoyed certain core advantages
manufacturing, increasing domestic demand and
in the manufacturing sector, like rich mineral
growth in exports have led the Indian economy
resources (iron ore, coal etc.), developed
to gain greater foothold in the world market
processing base, natural sea ports (Kandla, Kochi,
over the past decade. Distinct advantages such
Visakhapatnam, Paradeep, etc.) and abundant
as lower costs of production and superior
supply of cost-effective labour. Owing to these
output quality makes India a viable destination
natural advantages, the manufacturing sector in
for outsourcing of manufacturing for several
India has spread across primary, secondary and
multi-national corporations (MNCs) across the
tertiary processing segments. While the
world.
traditional manufacturing strongholds in India
The manufacturing sector in India has witnessed which have been steel, cement, heavy engineering,
a healthy average growth of approximately 9% in textiles, etc., the emerging industrial and related
the last four years, with a record growth of sectors include agro-based/food processing
12.3% in 2006-07, primarily attributed to the industries, pharmaceuticals, automobiles, logistics
global cost competitiveness – competitive capital and warehousing, among others which are also
and operative costs – that India has been able to gaining grounds in India.
provide vis-à-vis other locations. Further, the Like the manufacturing industry on the whole,
expanding domestic market together with the the Indian industrial real estate market has also
scaling up of operations by Indian companies, delivered a strong performance in recent years,
emergence of new industry segments and
INDIA REPORT | MARCH 2009 1

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with average rental growth reaching around 25- NCR have forced much of the manufacturing
30% in key markets. Supply shortages, however, and logistics facilities to relocate to industrial
in prime centres such as Mumbai and Delhi – parks in emerging tier-II and III locations
MAJOR GROWTH DRIVERS FOR MANUFACTURING IN INDIA

The compounded growth of the manufacturing • An increase of 51% in rail freight movement
industry over the past decade has been a result through development of DFC and
of the combined factors as enumerated below: development of logistic services.
Economic Growth • Completion of National Highway
Development Program (Phase 3 to 7) and
The Indian economy has witnessed GDP growth
A renewed initiative integrate road development with railways
of over 8% since 2003-04 and has emerged as a
to strengthen India's and other modes of transport.
favoured manufacturing and outsourcing
industrial policies,
destination. Escalating demand from the growing Government Initiatives
focus on
mid-economic stratum and increasing exports
infrastructure According to the World Economic Forum's
has brought in an upsurge of emergent industry
development, easing Global Competitiveness Report 2008-09, India
segments including pharmaceuticals, automobiles
tax regulations and currently ranks 50th among 134 most
and auto ancillaries, FMCG, consumer durables,
access to finance will competitive economies across the world and a
logistics, etc. The manufacturing sector, striving
further enhance renewed initiative to strengthen India's policies,
to increase its growth rate from current 7% in
competitiveness of infrastructure, tax regulations, access to finance,
the ongoing financial crisis which has adversely
Indian manufacturing inflation etc. will further increase the
impacted household income there by putting
sector. competitiveness of the economy when
pressure in consumer demand. However recent
compared to others. In order to accelerate
easing of inflation and stable domestic demand,
growth and improve competitiveness of the
will require significant increase in expansion of
Indian manufacturing sector, several initiatives
plant capacities and increase in productivity.
have been undertaken by the Central
Infrastructure Developments Government as below:
Approximately US$ 350 billion has been set • Liberalisation of Foreign Direct Investment
aside for infrastructure development (FDI) policy by allowing 100% FDI in the
expenditure by the 11th Five Year Plan period. manufacturing sector
The upcoming Dedicated Freight Corridors
• Implementation of technology up-gradation
(DFC) by the Indian Railways and the proposed
schemes which provides benefits like
development of approximately 1,500 km of
interest reimbursement, capital subsidy and
Delhi – Mumbai Industrial Corridor (DMIC) will
protection against foreign exchange
lead to further development of 13 new
fluctuations for various sectors including
industrial corridors. The central government is
several small scale industries, textiles and
also in the process of setting up a dedicated
apparel, food processing, etc.
fund of INR 50,000 crore for future
infrastructure projects. The 11th Five year plan • Introduction of Special Economic Zones
aims to create an integrated transport system in (SEZ) Act which will increase exports and
the country to include some of the following facilitate job creation. At the same time
key infrastructure development projects: companies operating from these zones will
reap the benefits of sound infrastructure, tax
• Doubling existing handling capacity of ports
exemption, improved efficiency and margins
from 505 million metric tonnes to 1017
due to potential synergy from the
million metric tonnes by 2012.
development etc.

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• The construction of DMIC spanning across have already explored the opportunity of setting
approximately 1500 kms and the up production bases in India, prominent amongst
development of Manufacturing Investment which are automobile majors , such as Nissan,
Regions (MIRs) across India Suzuki, Fiat and Hyundai and iron and steel
which is expected to double employment, majors like POSCO, Arcelor Mittal, Dow
triple investment and quadruple exports Chemical, etc. are moving towards making India
within this region in a five year time frame. their manufacturing hub for global exports.
• Exemption from central excise duty, Outsourced Manufacturing
subsidies on capital investment and
India, only behind China, is the most preferred
transport, rebate on land and
global destination for outsourced manufacturing
rationalisation/ reduction in other duty
Manufacturing activities. This is predominantly due to
rates are some of the benefits extended to
companies in advantageous factors like lower cost of
the manufacturing sector.
sectors such as production, availability of skilled technical and
automobiles, • Amendment of the 1984 Land Acquisition management talent coupled with an investor-
pharmaceuticals, Act, the proposed new policy on friendly government. Manufacturing companies in
food processing, Rehabilitation and Resettlement, and the sectors such as automobiles, pharmaceuticals,
electronics and repealment of the Urban Land Ceiling and food processing, electronics and hardware are
hardware, are Regulation Act by several state governments increasingly outsourcing production to obtain
increasingly will further eliminate ambiguity in present cost efficiency and hedge revenues and
outsourcing land acquisition procedures. production risks over geography. According to
production to obtain the “Made In India” Report by McKinsey and
Increasing Presence of Multinationals
cost efficiency and Confederation of Indian Industries (CII),
hedge revenues and Over the last few years, India has been revenues from manufactured product
production risks increasingly pursued by multinational outsourcing are expected to raise five times the
over geography. organisations for gaining access to its current value to over US$ 300 billion by 2015.
marketplace, and to avail its cost competitive
resources. Several multi national corporations
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INDUSTRIAL SECTOR - THE REAL ESTATE PERSPECTIVE
Real estate is a major cost component for most

capital intensive manufacturing industries. Unlike Consideration for Industrial Land
other real estate segments like residential, Acquisition:
hospitality, retail and commercial office space, Clear title
=
which focus on built-up space and related costs, Good connectivity
= to road, rail and ports
the manufacturing sector requires large land Proximity
= to labour catchments
parcels in the range of 30-200 acres and above. Sound Physical infrastructure
=
The quality of land and supply chain connectivity Accessibility of raw material and resources
=
are other crucial factor for the development of Supply chain connectivity
=
this sector. Being an extremely complex and Proximity to large markets
=
Being an extremely cumbersome process, setting up or relocation of
complex and manufacturing unit is not always viable and Source: Cushman & Wakefield Research
cumbersome therefore each manufacturing set up has to

being selected on the basis of a strong presence
process, setting up maintain long-term sustainability as an inherent
of ancillary industries in the vicinity, in many
or relocation of feature of the industrial space.
cases the development of ancillary industries
manufacturing unit is
Operational and capital costs are the other have also been influenced by the existence of
not always viable and
important criteria for site selection in this major manufacturing facilities.
therefore each
manufacturing set up segment, followed by industrial infrastructure
As the demand for new industrial locations rises,
as to maintain long- support and logistics/supply chain connectivity.
companies are increasingly considering setting up
term sustainability as Easy availability and cost efficiency of both
plants and manufacturing units that are
an inherent feature skilled and unskilled labour is another important
customised to their individual requirements.
of the industrial factor which guides the manufacturing industry,
Though small and medium enterprises (SME) are
space. together with pro-active Government policies
usually content with industrial sheds in a location
and incentives for industrial thrust areas. The
of their choice, larger players are keen on
presence of ancillary industries is also kept in
acquiring land and developing the area as per
focus during selection and set up of a
their specific requirements. Land, by virtue of
manufacturing base.
being a state subject, has its own complexities
The establishment pattern of ancillary industries, and the process of acquisition poses many
presents an interesting study in itself. While challenges which require professional assistance
there have been instances of industrial land and guidance.
SOME OF THE MAJOR ISSUES AND CONCERNS IN LAND ACQUISITION
Fragmented Land Holding: In India, land Title Issues: 'Title' is the most vital part of any
ownership is usually fragmented with multiple land deal, however in India, due to heavy
owners and thus there is low availability of large fragmentation, unclear succession laws and other
contiguous land parcels with single owner. This factors, land title is usually shrouded in
also leads to reduced availability of land with controversies. Land deeds are segregated as
clear title. A part of the problem is lack of leasehold and freehold land, where leasehold
clearly zoned/demarcated land which is largely land only gives the user the right to usage of
due to archaic paper based land records lacking land without the right to sell / re-sell or amend
standardisation across the various states. Even the usage while freehold land gives the owner
though India is moving towards digital land complete rights to alter usage and even secede
records, various legal bottlenecks threaten to from the land. However, there have been many
make the process painfully slow. cases where leasehold lands have been garbed as
freehold and sold to unsuspecting buyers thus

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increasing the opaqueness in the titles, possibly acquired in a state can be different from another
leading to multiple claims on the same land state for the same project.
parcel. Due to the fact that land holdings are
High Transaction Cost Due To
fragmented, amalgamation of large land parcels
Complicated Tax Structure: Complicated
can be a very painfully slow process as various
property tax regimes and stamp duty structures
owners need to be converted into sellers.
also amounts to higher transaction costs on
Further, with the ambiguities in land titles and
purchase of real estate assets. In India, stamp
ownership, there is no actual existence of title
duty and property taxes are state functions and
insurance as the costs far exceed the risks.
it differs from state to state and in certain cases
Although certain insurers are said to be
even between cities within the same state.
providing title insurance, the premiums are very
Currently stamp duty paid on real estate
high therefore for all practical purposes title
A new policy on purchases ranges from 6% to 12% while
Rehabilitation and insurance is non existent in India.
property tax and registration fees paid in
Resettlement has Zoning of Land and Conversion of Use: addition to stamp duty can increase the
been proposed with Another aspect which can be precarious is the transaction cost to as much as 10-15% of total
the focus on curbing aspect of zoning and land conversion process market value of the land. Disparity in stamp
real-estate players which is under the jurisdiction of the town duty rates is a hindrance for real estate. This
from creating land planning authorities i.e. land use can be changed leads to a further lack of transparency in pricing
banks and to from commercial to residential to industrial or and creates valuation issues. Proposal for
encourage any combination. Thus upon acquisition, the uniform stamp duty structure across the
development of land. developer has to ensure that the land is country along with rationalisation of stamp duty
converted into the correct zone for industrial rates to realistic levels would generate more
use giving adequate reasons for conversion, revenues.
which is usually a slow as well as expensive
Valuation: Valuation of land is one of the key
process to undertake.
areas of concern in India as there is a wide
Legal & Regulatory Issues: The legal and spread discrepancy between the circle rates and
regulatory framework for land acquisition in actual market rates. Currently India has no
India is also rather complex. Inconsistent and independent appraiser body that can meet
overlapping state and union government laws international standards like those set by
lead to further complications and delays. International Asset Valuation Committee,
Amendment of Land Acquisition Act 1984 and International Federation of Surveyors, Royal
new policy on Rehabilitation and Resettlement Institution of Chartered Surveyors, The Appraisal
have been proposed by central government to Institute, American Society of Appraisers etc.
eliminate ambiguity of land acquisition. The Thus the appraisers use various different
proposed amendment in Land Acquisition Act of methods of valuations in India, the most
1984 aims at redefining forceful acquisition of commonly used method being the discounted
land for “public purpose”. A new policy on cash flow. However, even that measure, is difficult
Rehabilitation and Resettlement has been to apply uniformly due to the wide spread
introduced with the focus on curbing real-estate discrepancies in the variable factors such as
players from creating land banks and to circle rates, actual rate of acquisition, stamp
encourage development of land. rates etc. Therefore different appraisers can
arrive at different values for the same asset
As every state has a separate legal and
based upon the valuation method, model and
regulatory framework, the mode of operation
assumptions being taken into consideration. This
differs from state to state. Technicalities like
allows for a large variance between the valuation
Floor Space Index (FSI) and Floor Area Ratio
arrived upon.
(FAR) benefits also differ between states, as a
result of which the amount of land being

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MAJOR MANUFACTURING CLUSTERS

Several industries are diversifying and expanding Major Manufacturing Hubs in India
their operations in India to provide added
impetus to the manufacturing sector. High
growth sectors such as automobiles and
pharmaceuticals are the key beneficiaries of the
global trend in outsourced manufacturing
activities. Emerging sectors like food processing,
The manufacturing
logistics, warehousing, and the growth in the
sector is usually
consumer goods segment have also provided a
concentrated in
fillip to the manufacturing sector.
clusters to enable
them to leverage The manufacturing sector is usually
from the one concentrated in clusters to enable them to
another's leverage from the one another's operations. In
operations. India, these clusters can be divided into four
major zones North, West, East and South. There
are several states across India that are promising Automobile
industrial destinations and are at various stages Machine Tools
of development. We have selected certain Textile
prominent states to feature in each of the Drugs & Pharmaceuticals
respective zones. These zones have been Source: FedEx and Cushman & Wakefield Research
explored to focus on attractiveness, incentives
and initiatives of established and emerging industries both existing and emerging in each of
industrial locations along with types of these locations.
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WESTERN CORRIDOR
Western Corridor Western Corridor - Land Value Trend
Existing Corridors Land Values Outlook

(YOY growth)
Pimpri Chinchwad 0%
Panvel 0%
Emerging corridors
Talegaon 0%
Chakan 0%
Sanaswadi 0%
Ranjangaon 0%
Automobile Trans-Thane Creek -30%

Machine Tools
Textile Taloja -15%
Drugs & Pharmaceuticals
Source: FedEx and Cushman & Wakefield Research Source: Cushman & Wakefield Research
Maharashtra
Maharashtra has for long been a major • Industrial Promotion Subsidy for new units
manufacturing hub and one of the most and expansion of existing units in the state.
industrialised states in the country. Existing • Interest subsidy to small scale units in apparel
industrial base and availability of skilled and textile industry.
manpower have encouraged the growth of the
• Customised package of incentives to
manufacturing sector in Maharashtra. In order to
industrial projects with investment of over
further stimulate the state's economy, the
INR 250 cores.
revised Industrial, Investment and Infrastructural
Policy of Maharashtra aims to achieve industrial • Exemption from electricity duty and waiver
growth of approximately 10% by 2010. As a on stamp duty.
result, apart from sustaining growth of traditional • Refund/ Exemption of Octroi for 15 years
industries like automobile, pharmaceuticals,
• Development of manufacturing clusters and
engineering, chemicals and textiles, the new
industrial townships to improve
policy also focuses on emerging industries like
competitiveness.
bio-technology and food processing. Building up
quality infrastructure, incentivising the • Promote setting up of Special Economic
manufacturing sector and attracting investments Zones (SEZs) to promote exports from the
are some of the key strategies of the state to state.
realise its industrial policy objectives. • Specific policies for vital industries like
Biotech, Textile and Agro Processing.
Some of the key policies and incentives that are
likely to play a critical role in the growth of the Major Industrial locations are spread across the
manufacturing sector in Maharashtra are as state, however locations of Mumbai, Pune,
follows: Nashik, Nagpur and Aurangabad are key

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industrial hubs in Maharashtra. The proposed automobile manufacturing hubs in India, along
development of a four-lane road connectivity with engineering and electronic industries. More
between these locations and a greater emphasis recently sectors such as food processing,
on knowledge based manufacturing along with pharmaceutical and biotechnology industries
agro based industries is likely to further have also set up their manufacturing bases here
stimulate growth of the manufacturing sector in towards the north and north-eastern part of the
the state. Approximately 80,000 acres of land is city.
being developed for industrial use across 12
Pimpri - Chinchawad is an established auto
major locations.
cluster that currently houses many major
Mumbai automobile players, along with several auto
ancillary units. Shortage of land in existing
Trans-Thane Creek Scarcity of land parcels and rising land prices has locations has led to the emergence of new
which is the largest led to the development of peripheral corridors corridors like Talegaon and Chakan. Chakan is
industrial area near in Mumbai. The demand for industrial land in the especially attractive due to existing tax benefits,
Mumbai and has peripheral locations has been fuelled by several proximity to Jawaharlal Nehru Port Trust (JNPT),
witnessed increasing infrastructural developments like the Maha National Highway (NH) 3 and 4, and proposed
presence from Mumbai SEZ, the proposed international airport airport at Rajgurunagar.
engineering, and the Mumbai Trans-Harbour Link project
electronics and (connecting Sewri to Nhava Sheva) Panvel, Taloja, In addition to the presence of automobile sector,
pharmaceutical Trans-Thane Creek, Khopoli and Uran are likely MIDC has also started acquiring large areas of
sectors in recent to witness accelerated growth in near future. land to set up Biotechnology and Infotech Parks
past. This increasing between Talegaon and Vadgaon. Mundwa,
Panvel is a strategically placed, rapidly growing Poonawala and Monshi also provide good
demand is likely to
location near Mumbai. Availability of large land opportunities for industrial development.
drive demand in
parcels, octroi exemption and proximity to Ranjangaon is emerging as a major industrial
adjoining areas of.
Jawaharlal Nehru Port Trust (JNPT) make it an center with several greenfield projects currently
Rabale, Ghansoli,
ideal location for logistics and warehousing underway. It has already attracted several
Mahape and Turbhe.
industry. Taloja, another prominent industrial hub manufacturing companies from automobile and
in Navi Mumbai which is expected to witness an consumer good sectors.
upsurge in demand from the warehousing
industry owing to its closeness to the Panvel- About 4500 acres of land is being acquired by
Pune Road and the proposed airport. MIDC for proposed development of industrial
Additionally, Trans-Thane Creek which is the parks and SEZs which will lead to development
largest industrial area near Mumbai and has of the area of Sanaswadi, north-east of Wagholi,
witnessed increasing presence from engineering, as another major location for industrial parks.
electronics and pharmaceutical sectors in recent
Nashik
past. This increased demand is likely to drive
demand in adjoining areas of Rabale, Ghansoli, Nashik is another key automobile and
Mahape and Turbhe. engineering goods manufacturing centre. Over
the last few years, the district has also witnessed
Pune increasing presence of agro processing units.
With over 9,500 acres of land under There are several industrial estates which are
development by Maharashtra Industrial currently operational in Nashik. Development of
Development Corporation (MIDC), Pune has 4 additional industrial estates, proposed
reaped benefits of its existing industrial construction of a 4 lane highway between
experience, while also becoming one of the Mumbai - Nashik and proposed rail terminus are
largest industrial hubs in the state of some of the key infrastructure projects aimed to
Maharashtra. It is also one of the largest accelerated industrial growth.

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Spread over 2700 hectares of land, Sinnar is the • Exemption of stamp duty on development of
largest industrial estate in the district with about industrial park.
174 medium and large operational • Availability of interest subsidy to small and
manufacturing units catering to engineering, medium enterprises.
automobile components and food processing.
• Cluster Development Scheme (CDS) to
Satpur, Ambad, Pimpalgaon and Manmad are the
promote competitiveness of small and
key industrial hubs in Nashik.
medium enterprises by creating common
Gujarat facilities to reduce cost, strengthen
infrastructure facilities and marketing of
Gujarat is distinguished as one of the most products.
rapidly evolving industrial states in the country. • Up-gradation of industrial infrastructure
Gujarat is The state has set a growth target of 11.2% for along with promotion and development of
distinguished as one the 11th Five year plan which will require the SEZs.
of the most rapidly industrial sector to grow over 14% during the
evolving industrial same time period. To achieve this accelerated The proposed development of DMIC is
states in the country. growth, the state government has put special expected to provide more opportunities for
The state has set a emphasis on manufacturing sector. A front industrial development in the state. About 40%
growth target of runner in attracting investments, presence of a of the total proposed corridor will pass through
11.2% for the 11th large industrial base, large scale development of Gujarat influencing industrial growth in 18 out of
Five Year plan which SEZs and investor friendly industrial policy are 25 districts in Gujarat. Vadodra, Ankhleshwar,
will require the major drivers for industrial growth in Gujarat. Dahej, Bharuch, Surat, Navsari,Valsad and
industrial sector to While historically Gujarat has been a prominent Umargaon are key industrial locations which are
grow over 14% manufacturer of textile, engineering products likely to be benefited from the upcoming
during the same and pharmaceuticals, the emerging industries corridor. Peripheral locations of Ahmedabad are
time period. include the automobile and food processing. also likely to witness major industrial
developments due to the proposed development
Key highlights of the current state industrial of automobile and pharmaceutical manufacturing
policy are as follows: units at Sanand.
• Financial assistance at the rate of 20-50% of
fixed capital investment to industrial parks.

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SOUTHERN CORRIDOR
Southern Corridor Southern Corridor - Land Value Trend

(YOY growth)
Bommasandra 5-7%
Peenya 5-7%
Jigani 5%
Sriperumbudur 5%
Irungattukottai 5%
Vishakapattam 5%
Balanagar 10%
Andhra Pradesh Emerging corridors
ranks second in NH 5 10%
producing Value Dobaspet 5%
Added food Oragadam 5-10%
Ennore 5%
products and has a Kanakpura 5%
10% share of Automobile Tumkur 5%
Machine Tools
beverages within the Narasapura 5%
Textile
country. Drugs & Pharmaceuticals
Krishtanapatnam 20%
Kadapa 15%
Andhra Pradesh
Andhra Pradesh has historically been an providing strong infrastructure - the only state
agricultural state rather than industrial, but the to have an exclusive infrastructural development
government is keen to ensure a more act and subsidised land attracting various
wholesome growth for the state and is industries to set up in this state.
attracting investments from various industries.
Some incentives offered by the Andra Pradesh
The state is rich in minerals, horticulture,
government in the Industrial Investment
agricultural and food related production thus
Promotion policy 2005-2010 are as follows:
making it a valuable centre for raw materials and
processing. The state also boasts of a large • 100% reimbursement on registration of land
presence of research & development institutions and building / leased property for industrial
around the urban centre of Hyderabad thus use
enabling the city to achieve the title of 'bulk
drug capital of India.' The thrust industries as • Reimbursement of power at Rs 0.75 per unit
per the state government are information for eligible industries and Rs 1.00 per unit for
technology, pharmaceuticals and biotechnology. eligible food processing industries
Andhra Pradesh has some key advantages like • VAT reimbursement of 25% paid by the
skilled population and a central location along industry for a period of 5 years
with good connectivity by road (major national
highways such as NH 7 and 9), Air (major • 15% investment subsidy subject to a certain
airports being redeveloped and Greenfield limits
airport being commissioned), Ports (2 major • Additional 5% on fixed capital investment up
ports and 10 minor ports with an additional to a limit for SC/ST
port at Gangavaram which is currently being
developed) with a proactive government

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Hyderabad Vijayawada
Hyderabad is a major centre for pharmaceuticals Vijayawada emerged as an industrial hub due to
and biotechnology industries in the country. Its the connectivity with a natural harbor. Located
prominence as an industrial town is due to the on NH 5 this location is accessible to large
robust infrastructure provided by the markets such as Chennai and Kolkata by road
government and the connectivity to other parts and a developed railway network, to be
of the nation through major national highways. connected it to other parts of the nation. There
Development projects such as Genome Valley, are various small to medium scale industries in
Fab City and the hardware park that are being the automobile body building, garment, iron and
set up around Hyderabad are expected to hardware sector. It is also a major trading hub
attract corporations to the city. Patancheravu on due to the location and connectivity thus being
The second port at NH 9, which has access to Bangalore and referred to as the commercial hub of Andhra
Gangavaram will Vijayawada, has an established manufacturing hub Pradesh.
further increase and has recently witnessed the growth of
trading opportunity Emerging locations such as Tada, which is being
sectors such as warehousing and logistics.
and efficiency thus promoted by the Andhra Pradesh state
attracting more Visakhapatnam government, has an industrial park set up by the
industries to set up government with strong infrastructure and good
Visakhapatnam is an important centre for connectivity by being on the golden quadrilateral.
base in this region.
industrial development in India as it is also the
largest port in the country. The second port at Karnataka
Gangavaram will further increase trading
opportunity and efficiency thus attracting more Karnataka is among the top five industrialised
industries to set up base in this region. states in India and was the first to introduce a
state Industrial Policy in1982-83. It is ranked as
Warehousing facilities, strong connectivity and one of the largest exporter of software in India
upcoming infrastructural initiatives such as the and also one of the largest recipients of FDI in
international airport make this location the country. It is one of the leading states for
attractive for various sectors like heavy biotechnology while also being a manufacturing
industries, fertilizer, oil and gas. The proposed hub for some of the largest public sector
Petroleum, Chemicals and Petrochemical industries namely Hindustan Aeronautics
Investment region (PCPIR) on the Kakinanda- Limited, National Aerospace Laboratories, Bharat
Visakhapatnam coastal corridor is expected to Earth Movers Limited, Bharat Heavy Electricals
be spread over 604 sq. km which has already Limited, United Breweries Group and Hindustan
attracted large corporations to the area and Machine Tools. There are various industrial zones
smaller support industries are following suit. within the state and although majority of them
There are various food processing units that are are concentrated in and around Bangalore city,
established and currently being set up in order there is a steady disbursement of industrial
to cater to the seafood export industry that corridors to different areas of the state. The
leverages from the established fishing industry. In Commerce and Industry Department, Karnataka
the recent years there has been an influx of large Industrial Area Development Board and
textile corporations moving into the city due to Karnataka State Industrial Investment
the SEZ and textile parks being set up in the city Development Corporation (KSIIDC) have
limits. The setting up of the Jawaharlal Nehru promoted industrial infrastructure development,
Pharma City (SEZ) - a 2200 acre campus in addition to the incentives, in the state thus
development - has worked as the necessary attracting various new industries to set up
catalyst for the growth of the pharmaceutical within the state. The key thrust areas for the
industry. state are aerospace, engineering, automobile,

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machine tools, steel, cement, pharmaceuticals, Mangalore

food processing, apparels and textiles,
Mangalore is predominantly characterised by the
electronics, IT and biotechnology.
oil and gas, port (ship building) related activities
Some of the Incentives and concessions under and food processing industries. Some of the
the New Industrial Policy (2006-2011) established locations around Mangalore are
• Capital investment subsidy to small scale Baikampady and Yeyyadi which house small scale
industries (SSI) in all areas industries. The upcoming export promotion
industrial park's at Ganjimutt is expected to
• Exemption of electricity duty on captive provide a further fillip to the export oriented
power plants industries in these locations.
• Exemption of stamp duty and reduction of
The Commerce and registration charges in thrust areas Mysore
Industry
Department, • Waiver of conversion fee for up to 50 acres Mysore has established industries such as
Karnataka Industrial in thrust areas weaving, sandalwood products, and lime and salt
Area Development • Reduction of 18% on land acquisition production. The Karnataka Industrial Areas
Board and Karnataka charges through Karnataka Industrial Areas Development Board (KIADB) has established
State Industrial Development Board (KIADB) in thrust areas four industrial areas in and around Mysore which
Investment are located in Belagola, Belawadi, Hebbal
• Subsidy of up to $200,000 for setting up of (Electronic City) and Hootagalli areas. Currently
Development
effluent treatment plant in any area the city is witnessing heightened interest from
Corporation
(KSIIDC) have • Entry tax concessions for 3/5 years on the IT sector and is proving to be a competitor
promoted industrial capital goods/ raw materials in thrust areas to Bangalore. There is considerable growth,
infrastructure powered by IT on the State Highway 17 which
The new Industrial Policy for 2006-2011 aims to connects Bangalore and Mysore.
development, in achieve a Gross State Domestic Product
addition to the (GSDP) growth rate of 9% per annum and 12% Tamil Nadu
incentives, in the average annual growth over the policy period in
state thus attracting the industrial sector, which accounts for 18% of Tamil Nadu is a major contributor to the nations
various new GSDP. This growth target will ensure that the GDP as it is one of the largest state economies
industries to set up government continues to play an important part within India and considered as one of the most
within the state. in attracting industries to choose Karnataka as industrialised states in India. In 2006-07, the
an ideal location for manufacturing. manufacturing sector contributed 20.23% to the
GSDP and by 2011 the state plans to raise the
Bangalore contribution to 27% as specified in the State
Government Industrial Policy 2007.
Bangalore is home to various industrial houses
which have set up manufacturing units around The government is working with various nodal
the city giving rise to several industrial zones, of agencies such as Tamil Nadu Industrial
which Bommasandra, Peenya and Jigani are the Development Corporation (TIDCO) aimed at
most prominent locations. However, to keep identifying and promoting establishment of large
pace with the rapidly growing industrial sector and medium scale industries within the State,
new locations like Tumkur, Mysore, Dobaspet State Industries Promotion Corporation of Tamil
and Kanakpura are gaining prominence in and Nadu (SIPCOT) aimed to identifying, developing,
around the city. Major industries find Bangalore and maintaining industrial areas in backward
favourable due to factors like availability of areas of the State, Tamil Nadu Industrial
skilled workers, easy connectivity, favourable Investment Corporation (TIIC) which assist
climate, relatively lower costs. financially new or existing units in operations

R E P O RT
commencement and expansion and Tamil Nadu Sriperumbudur

Industrial Guidance & Export Promotion Bureau
Sriperumbudur, situated just a little over 40 km
- which provides comprehensive information,
from Chennai, gained prominence due to the
guidance and support to investors. These
setting up of manufacturing units by companies
agencies along with other government initiatives
like Saint Gobain and Hyundai in the area and is
such as single window clearance and incentives
now being showcased as an ideal location for
which are sector and location specific and often
future development due to the establishment of
customised to the investor depending upon their
various telecom manufacturers such as Nokia,
needs and the quantum of investment have
Motorola, and Samsung.
contributed to the growth of industrialisation
and investment in the state. Emerging locations such as Oragadam, Ennore
Tamil Nadu has and the NH 5 corridors are also gaining
Tamil Nadu has historically been a prominent
historically been a prominence due to the availability of large land
state for trading and manufacturing which can be
prominent state for parcels, availability of land subsidised by the state
attributed to the locational benefits of the state.
trading and government and robust infrastructure
It is the only state that houses three major ports
manufacturing this development. Industries are biased towards
- Chennai Port, Ennore Port and Tuticorin Port,
can be attributed to certain locations due to their advantages that
in addition to 14 minor ports. Further
the locational can be leveraged in order to make the
government’s infrastructural initiatives have
benefits of the state. operations more efficient and develop a viable
ensured that the state remains a strong
business model as seen with various export
competitor in investment and presence of
oriented firms being attracted to Ennore due to
manufacturing and industrial units. Some of the
the existing port. Industries like logistical firms
more prominent industries in the state are
prefer to be located on the NH 5 due to the
textiles, automobiles and heavy vehicles, auto
already existing goods warehousing facility and
components, railway coaches, power pumps,
the excellent connectivity through the golden
leather tanning industries, cement, paper etc.
quadrilateral to east India.
While currently the government is promoting
other industrial sectors such as rubber, Tiruchirappalli
floriculture, biotechnology, and agriculture.
Tiruchirappalli with the presence of BHEL,
Chennai ordnance factory, Dalmia Cement and other
prominent corporations is a major engineering,
Chennai also referred to as the 'Detroit of India'
manufacturing and fabrication hub. There are also
due to the existence of large auto and auto
smaller agricultural and food processing based
auxiliary cluster in and around the city, has also
industries on the peripheries of Tiruchirappalli
recently attracted the electronic hardware
and towards Coimbatore which is expected to
manufacturing sector in a large way with
grow in the future due to its logistical advantage
companies like Nokia, Samsung, Motorola,
of being connected to large cities such as
Foxconn, Dell, Flextronics etc., setting up their
Chennai, Madurai, Nagappattinam and
manufacturing facilities in and around the city.
Coimbatore. With multiple national highways
The development of the IT/ITeS sector has also
(NH 45, NH 45B, NH 67, NH 210, NH 227)
brought about large migrant population from
running through it and multiple railway stations
neighbouring cities and states. Chennai is a very
such as Tiruchirapalli Junction, Tiruchirapalli
attractive location for industries due to
Town, Tiruchirapalli Fort, Tiruchirapalli Palakkarai
excellent connectivity through road, rail and sea,
etc. and an international airport that is being
additionally availability of skilled manpower and
upgraded, the city is expected to transform itself
presence of international air transport makes it
as not only a manufacturing centre but also as a
an ideal location for exporters.
logistical trading hub.

R E P O RT
Coimbatore Karur
Coimbatore district's primary industries are Karur is an established hub for the bus body
engineering, textiles, hosiery and poultry with building industries where most of the private
the city having headquarters of corporates such buses used in south India are manufactured in
as Pricol, LMW, ELGI, Suguna and Bromark this region. The state government owned Tamil
Pioneer Poultry. It is also known as the Nadu Newsprint and Papers which is the world's
Manchester of South India due to the strong biggest bagasse based paper mills is also present
presence of textile industry especially seen in here. There are other industries such as textiles,
the town of Tiruppur - the largest garment sugar and cement that are prevalent in this
manufacturing and exporting cluster in India. The region. Although the region is centrally located
cotton fields in the district helps to keep input within the state it offers limited connectivity
Coimbatore costs low thus making it a highly competitive through rail and other means of transport thus
district's primary market. Investment from Suzlon and Hansen hampering the growth in this region.
industries are transmission could transform the area to a
engineering, textiles, The government is also concentrating on certain
major player in the alternative energy and
hosiery and poultry corridors such as the Chennai-Manali-Ennore
manufacturing components arena.
with the city having corridor and the Chengalpattu-Sriperumbudur-
headquarters of Ranipet corridor currently and at a later stage
corporates such as the Madurai-Thoothukkudi and Coimbatore -
Pricol, LMW, ELGI, Salem Corridors will also be developed.
Suguna and Bromark
Pioneer Poultry.

R E P O RT
EASTERN CORRIDOR
Eastern Corridor Some key policies and incentives offered by the

state that have helped the industrial sector are:
• Waiver in electricity duty for 5 years
• 50% refund on stamp duty and registration
• Subsidy on interest, employment generation
and investment capital
• Guidance in identification, allotment,
conversion of land and other infrastructural
facilities
West Bengal has
industrial areas in • Subsidy for quality improvement in the Small
many districts but Scale sector
the government has West Bengal government has identified four
identified four major major industrial centers namely Kolkata, Haldia,
industrial centers Automobile
Asansol-Durgapur and Kharagpur. Salt Lake is an
namely Kolkata, Machine Tools
exclusive centre for IT/ITeS. The state already
Textile
Haldia, Asansol- Drugs & Pharmaceuticals has good connectivity through the golden
Durgapur and quadrilateral and is currently the gateway to the
Source: FedEx and Cushman & Wakefield Research
Kharagpur. north eastern states. Good support
infrastructure such as power, communication,
West Bengal ports and waterways also add to the
attractiveness of the state. The east -west freight
West Bengal has traditionally been the centre
corridor is also expected to provide the
for manufacturing and trading. It continues to be
required impetus to the overall industrial growth
a leading industrial state in the eastern region
of the state.
with availability of skilled manpower which has
provided the required stimuli for growth. Kolkata
According to the CMIE -Centre for Monitoring
Indian Economy - estimates in March 2007 the The state capital is the major hub for the IT/ITeS
outstanding investments in the state was US$ 50 sector in locations of Salt Lake and Rajarhat. The
billion registering a growth in excess of 100% city was forced to expand to the peripheries due
over the year. This exceptional growth was a shortage of land and has since emerged as the
mainly driven by investments in the construction, technology centre catering to the growing
manufacturing and power sectors. Traditionally requirements of the services industry. The
the state has been the home to several adjoining districts of South and North 24
industries like tea, steel and foundry, leather, Parganas and Howrah are major manufacturing
chemicals, coal and textiles to name a few. The hubs for industries like jute, steel, leather and
state's initiative to offer a cordial environment to textiles industries.
the investors has resulted in the formation of
"Shilpa Bandhu" a single window agency for Haldia
providing investors with every possible A city on the Haldi River is the home to many
assistance in setting up industrial units within the national and international oil and petro -
state. This has resulted in greater interest from chemical companies. It is the chemical hub of the
new industries that are now planning to enter state where the existing industrial base, social
the state such as metals, ceramics, food infrastructure and transport linkages make it a
processing and automotives. favorable choice for further growth of industries

R E P O RT
of petrochemicals products, fertilizers, oil bauxite, manganese, limestone, china clay, fire clay,
refineries, chemicals, ship building and breaking. graphite, kainite, chromite, asbestos, thorium,
A mega petro - chemical industrial estate is sillimanite and uranium. The state holds the
expected soon which will add a new dimension distinction of having the first iron and steel plant
to the up stream and down stream oil at Jamshedpur, the largest fertilizer factory at
industries. Another project for Purified Sindri and the biggest explosives factory at
Terephthalic Acid (PTA) is also on the anvil. Gomia. The industrial sector has shown
impressive growth over the years. As per the
Asansol - Durgapur Annual Survey of industries, the number of
Located in the western part of the Burdwan factories increased from 1,382 in 1999 to over
District in South Bengal, Asansol - Durgapur 1,600 in 2007.
The Jharkhand region has been a prominent industrial belt of The Jharkhand Industrial Infrastructure
Industrial the state due to the presence of major steel Development Corporation (JIIDCO) facilitates
Infrastructure plants in Burnpur and Durgapur. The coal belt in and develops infrastructure for industrial
Development the Raniganj area along with many chemical and development. Currently, the state has three
Corporation engineering industries in the vicinity have helped Industrial Area Development Authorities
(JIIDCO) facilitates the region to be established as a preferred (IADAs) headquartered at Adityapur, Bokaro and
and develops destination for industrial and mining activities. Ranchi. These authorities are responsible for
infrastructure for Biotech and automobile SEZs are planned at acquisition of land, development of support
industrial Kanksha near Panagarh and Andal which is also infrastructure facilities like road, drainage, water
development. expected to have the first Aerotropolis in the supply and public utilities within their
sate. Bankura and Purulia have also successfully jurisdiction. To provide a boost to the industrial
attracted industrialists keen on setting up steel development in the state, several initiatives of
and cement plants in the region due to the the government are listed below:
presence of cost effective land and labour. All
• Single Window Clearance for all industries
these locations have large land parcels along
with the availability of skilled work force. • Assistance in land acquisition
• Investment and Interest subsidy at growth
Kharagpur centres
Situated in the prime railway junction • Priority in power allocation in growth centre
approximately 120 kms from Kolkata, Kharagpur
The state is mainly dependent on mining and
shares the borders of Jharkhand. Several
agriculture, however industrialisation in some
engineering industries are already present and
pockets has been the key drivers of the state
are projected to be the home for steel and auto
economy. The main industrial centres in
components industry. Proposed biotech and
Jharkhand are Ranchi, Jamshedpur, Dhanbad and
iron and steel parks will add significantly to the
Bokaro. The government also plans to promote
industrial prominence of the sector.
Ranchi and Jamshedpur as key centres for
IT/ITeS sector. Steel plants, automotives, power,
Jharkhand
mining and engineering are the key industries
Jharkhand, by virtue of being in the Chhota that are already dominant in the state.
Nagpur area, is rich in natural resources. The
Strengthening of the transport infrastructure has
area was one of India's first industrial locations
become a priority for economic, industrial and
to be developed by the government. Many
social development of Jharkhand. The state is
public- private partnership endevours were set
planning to develop expressways along the main
up in Jharkhand through the first phase of
high-density corridors. It is also in the process of
industrialisation of modern India. The state has
starting inter state and intra state bus terminals.
large reserves of iron ore, coal, copper, mica,
The state has an extensive and well developed

R E P O RT
railway system providing vital links to the mining other industries. This region is home to several
industry with important cities and ports of the mines, coal washeries, engineering, fertilizer and
country. cement industries. This area is ideally suited for
coal products and small engineering industries.
Ranchi
Bokaro Steel City is located in the eastern part
The capital city of Jharkhand is also an important of the state and is home to one of the largest
industrial location housing several heavy steel plants in India, Bokaro Steel Plant, which is
engineering companies within its vicinity along a part of Steel Authority of India Limited. The
with various coal mines. Due to the rapid pace first blast furnace was started in 1972. The first
of urbanisation and the lack of space, the state methane gas well was also established here at
aims to develop a technology park in the Parwatpur. The Damodar Valley Corporation
Orissa has once suburbs to attract the growing services sector. (DVC) runs two thermal power plants in the
again started to The industrial area around the city is dotted district. There are other industries like LPG
attract attention of with companies engaged in the production of bottling plants as well as oil and gas companies in
national and heavy engineering, automobiles, steel rods, the district.
international aluminium, electric equipment, transformer oil,
investors as a paraffin and petroleum jelly. Orissa
prominent
destination for Jamshedpur Orissa is the second most mineralised states in
industrial India with vast mineral deposits of coal, iron ore,
Tata Nagar at Jamshedpur is the first iron and manganese ore, bauxite and chromites. Several
investment.
steel city in India and is located in East well known mineral-based industries have been
Singhbhum district. The city was founded by late attracted to the state. Traditionally an industrial
Jamshedji Nusserwanji Tata. The areas state, due to its proximity to the Chhota Nagpur
surrounding Jamshedpur has abundant natural area, in recent times, Orissa has once again
resources like iron ore, coal and lime, which started to attract attention of national and
form raw materials for the steel industry. international investors as a prominent
Adityapur, located in close proximity to the steel destination for industrial investment. Rourkela
plants of Jamshedpur and Bokaro, Heavy Steel Plant was a major initiative to provide the
Engineering Corporation in Ranchi, Uranium required momentum to this state. Metals and
Corporation in Ghatsila and Hindustan Copper mining has been the key industries in the state
Limited in Jadugoda are fast emerging as the along with the traditional textiles industry.
industrial centre of the east. This forms the heart
of the Chhotanagpur belt which has transformed The state government has taken several steps to
to an industrial hub. To provide the necessary improve industrial infrastructure and promote
impetus to the development of sectors like investments in the state. Significant among them
automobile and auto components. A SEZ is also are:
notified in Adityapur. These areas have the • Development of industrial and social
advantage of being in the area richest in natural infrastructure in steel and mining corridors,
resources. including setting up of railway corridors,
upgrading ports, creating expressways
Dhanbad and Bokaro
• Major expansion of Paradeep Port underway
This district sharing borders with West Bengal through public private partnership (PPP);
and Bihar is the coal capital of the nation. The • Land allocation at subsidised rates
metallurgical coal of the Jharia coalfield has given
• Exemption of electricity duty for 5 years
Dhanbad an important place in the industrial
map of the nation. Coal has attracted and The state government has reaffirmed its
brought about a concentration of numerous commitment to transform Orissa into a vibrant

R E P O RT
industrial state and has reformulated the metal based industries, power generation and
Industrial Policy in March 2007 which aims at engineering industries. These locations have
creating a more conducive business environment many small scale industries that help generate
that will raise income, employment and significant investments and employment.
economic growth. The Industrial Promotion and
Investment Corporation of Orissa Ltd (IPICOL) Cuttack
is a key promotional institution that was Famous for its the traditional textiles and
incorporated in 1973 with the main objective of handicrafts, Cuttak also houses several other
accelerating the pace of industrial development industries such as paper mills, metal work and
by promoting large and medium scale industries. food processing industries. Hosiery and knit
An efficient network of roads, railways, ports wear are the key industries that are instrumental
and aviation provide the necessary impetus for in the industrial development of the region.
the development of the industrial zones. Power
and telecom also form a part of the robust Jharsugda and Jagatsinghpur
physical infrastructure of the state and is the The districts of Jharsugda and Jagatsinghpur are
binding force for the key industrial locations of known for the manufacturing of steel and related
Angul and Bolangir, Cuttack, Jharsugda and products. Availability of the requisite talent pool
Jagatsinghpur. has helped this location to emerge as a
preferred industrial centre. Shipping and food
Angul and Bolangir processing are some new age industries that
Due to the availability of rich mineral deposits, have gained importance in the past.
this locations is dotted with several mining and

R E P O RT
NORTHERN CORRIDOR
Northern Corridor Northern Corridor - Land Value Trend

(YOY growth)
Okhla 5%
Faridabad 10%
NOIDA 10%
Kanpur 0%
Bhiwad 2%
Baddi 7%
Pantnagar-Haridwar 15%
Himachal Pradesh Emerging corridors
has witnessed
Manesar 0%
significant increase in
Greater NOIDA -10%
number of medium Rothak 0%
and large scale Balwal 0%
industries in addition Automobile Pontasahib 5%
Machine Tools
to small scale Textile
Balabgrah 8%
industries. Drugs & Pharmaceuticals Neemranah 0%
Himachal Pradesh
Himachal Pradesh has emerged as key industrial Some of the key incentives and facilities available
destinations in the northern region largely due to industrial sector in Himachal Pradesh are as
to the various initiatives of the state government follows:
for promoting industrial development in spite of • Units based on consumption of local raw
the geographical challenges in the state. materials have been categorised as
Over the last few years, Himachal Pradesh has priority sector and are provided with
witnessed significant increase in the number of interest subsidy along capital investment
medium and large scale industries in addition to subsidy.
small scale industries. State government has • Exemption from Goods and Service Tax
developed over 40 industrial parks and 15 (GST) and levy of Central Sales Tax
industrial estates with an aim to provide high (CST) at concessional rates.
quality infrastructure. Apart from existing
• Himachal Pradesh also enjoys special package
industries like pharmaceuticals, cement, agro-
of incentives from the Central Government.
forest based industry and biotechnology several
This includes:
other industries like textiles, leather and
engineering products have also set up – 100% exemption from payment of
manufacturing plants in the region. The state's Central Excise Duty for 10 years
industrial policy of 2004 aims at boosting – 100% income tax exemption for 5 years
industrial development in the state by creating – 25% and 30% exemption for the next
and upgrading existing infrastructure, providing block of 5 years, capital investment
several incentives and concessions and subsidy at 15% of investment in
streamlining rules and procedures. Plant & Machinery and central transport
subsidy.

R E P O RT
• Simplification of rules and procedures by the • Promote private sector participation in

existing state level "Single Window Clearance development of infrastructure projects.
and Monitoring Authority"
Pant Nagar and Haridwar have emerged as
The above incentives from state and central attractive industrial locations in the state.
government have attracted fruitful investments Currently 3 integrated industrial corridors have
and major industrial players (like Blue Star, TVS, been developed at Haridwar. Sitarganj and
Cadbury, Pidilite, Hindustan Unilever Limited, Siggadi are other prominent locations in
Nestle, and Mahindra & Mahindra). Locations like Uttarakhand which have witnessed major
Baddi in Salon, Sirmour, Kangra, Una and Mandi industrial development in the state.
are key industrial locations in Himachal.
Punjab
Agro food, Uttarakhand
In Punjab small scale industries dominate the
pharmaceuticals and
Uttrarakhand is one of the latest states carved industrial scene with approximately 47% of the
electronic sectors
out of Uttar Pradesh in November 2000. Since total manufacturing sector in Punjab. The other
and their allied
its inception, the state government has taken thrust sectors for the state are chemicals, metals
industries have
rapid strives in development of industrial hubs in and pharmaceuticals. The state's key industries
registered their
the state. High literacy rate of over 72%, include automotive and auto components,
presence in
availability of rich mineral deposits and bicycles and bicycle parts, food products, light
Uttarakhand.
availability of uninterrupted power are key engineering goods, paper and paper products,
advantages available to state of Uttarakhand. sports goods and textiles. The established
Agro food, pharmaceuticals and electronic industrial locations are Ludhiana, Patiala, Roop
sectors and their allied industries have Nagar, Amritsar, Bathinda and Jalandar. Industrial
registered their presence in Uttarakhand. The infrastructure, roadways as well as housing
state's share of the total investment proposals in projects and commercial complexes have seen
the country has more than doubled since its the maximum investment inflow in the recent
inception in 2000. Approximately US$ 2 billion past. The state is also focused on sector-specific
worth of investment is expected to be made in infrastructure for food, apparel, biotech, IT and
the automobile, pharmaceuticals, processed food, electronics sectors. In terms of SEZ space,
and fast moving consumer goods sectors in the Quark City, Mohali, has been granted SEZ status
near future. to promote IT/electronics industries, as well as
to the Ranbaxy SEZ at SAS Nagar, also in Mohali.
Major fiscal and non fiscal incentives being made
available by state government of Uttrakhand The Industrial Policy of Punjab is aimed at
includes: developing infrastructure and speedy clearance
• 100% relief in Excise duty for 10 years and of new projects. Key highlights of industrial
100% income tax exemption for first 5 years policy are as follows:
• Central Sales Tax levied at concessional rate • Replace Octroi and entry tax with a single
of 1%. Local Area Development Tax (LADT)
• Stamp duty concessions to be provided for • Infrastructure development though private

land in identified areas. sector participation by setting up of Special
Purpose Vehicles (SPVs)
• Capital investment subsidy of 15% and
interest subsidy of 3-5% for small scale • Freight subsidy for exports
industries. • Customised sector specific policies for
• Simplification and rationalisation of labour biotech and apparel sector and proposed
laws and single window clearance to reduce industries in border areas.
project delays.

R E P O RT
Upcoming industrial infrastructure in Punjab • Project of upto 3 crores to be cleared by the

includes: District level committee under the
Chairmanship of the District Collector
Electronics Township (ELTOP), Mohali, which also
includes a Software Technology Park, is jointly • 2% interest subsidy at documented rate of
promoted by Punjab InfoTech Corp and the interest of Financial Institutions to an SSI
Department of Information Technology. project having plant & machinery worth not
exceeding INR 100 lakhs.
Food Park Project, Sirhind spread over 25 acres,
which is a joint initiative between an Non- • 25% of the cost of DG Set limited to INR
Resident Indians group and Punjab Agro 250,000 is granted to SSI units for the
Industries Corporation. One of India's largest purchase of DG Set.
Alwar and Bharatpur and most sophisticated integrated food
• SSI units are eligible to get INR 10,000 per
are other prominent processing complex, it has an annual capacity of
product to get BIS certification mark
industrial hubs over 5,000 MT.
which have presence • To encourage cottage industries amongst
Apparel Park, Doraha, is an Integrated Textile
of major industries women entrepreneurs to motivate them to
Park, with 115 plots, jointly developed by the
like cement, opt for self employment women are being
Punjab Small Industry and Export Corporation
chemicals, dyes, provided training through DICs and NGOs.
Limited and the Association of Textile Industry.
electronics, • To promote and help in marketing the
engineering Biotech Park, Dera Bassi, a Public Private
products of Handicrafts, Handlooms and SSI
machines and food Partnership initiative between the Punjab State
Sector, Udyog Mela/ Exhibitions are
processing. Council for Science and Technology and Beckons
organised at Naitonal, State and District
Industries, it would comprise 10-15 industrial
Level.
units in agri-biotech and health care sectors.
Major existing industrial belts of Rajasthan
Rajasthan include Jaipur, Alwar, Kota, Bhilwara and Jodhpur.
Industrial performance of Rajasthan has been The proposed development of DMIC is likely to
driven largely by small scale industries further develop industrial areas in Jaipur, Dausa
dominated by key industries like food processing, and Bhilwara. Alwar and Bharatpur are other
agro industries, engineering products, cement, prominent industrial hubs which have presence
ceramic and marble and handicrafts. The state's of industries like cement, chemicals, dyes,
proactive role in developing skilled and semi- electronics, engineering machines and food
skilled work force has helped in increasing the processing. Prominent industrial hubs such as
attractiveness of this region, in establishing it as a Kota, Jaipur, Bikaner and Bhilwara have the
preferred industrial location for food processing presence of textile, leather, engineering goods,
and engineering products. State is focusing on and electronics. Bawal, located on the Haryana
developing sector specific infrastructure for border, provides a link between Jaipur and Delhi
food, apparel and electronic sector. While the thus allowing goods to move both upstream and
export promotion industrial park near Jaipur is downstream into neighbouring states.
one of the largest parks in north India, similar
The National Capital Region (NCR)
industrial parks are being developed at Alwar
and Jodhpur. Theme parks with facilities for a The National Capital Region (NCR) is the focal
particular industry and upcoming SEZs are other point for many commercial and IT/ITeS activities
major infrasture developments currently in North India and has historically been an
underway in Rajasthan. Some of the incentives attractive location for industrial activities such as
offered by the state are: automobiles, light engineering, textiles,

R E P O RT
pharmaceuticals etc.Various companies have the investors needs depending upon the
established their corporate headquarters as well investment quantum, employment opportunity,
as production units in the NCR mainly because region and type of industry being established.
of good connectivity through land and air, its UP's thrust industries include sectors like
large existing consumer markets and robust Biotech, IT/ITeS, Food and agro-processing units,
infrastructure initiatives. The North Western and textiles. Varanasi has attracted a proposal
Freight Corridor, Golden Quadrilateral, Eastern for a Textile Park and SEZ. Integrated Logistics
and Western Peripheral Roads and the North Hubs/Free Trade Warehousing Zones have been
South Corridor have all helped increase proposed in collaboration with IL&FS, Mineral &
connectivity to this region. The proposed airport Mining Trading Corporation and Mitsui (Japan).
in Greater Noida along with the expansion of An Integrated Agro/Food Processing Zones has
Traditional industrial the cargo hub in the existing Delhi international been proposed at Hapur.
locations of Okhla, airport will be added advantages of this location.
Mohan Cooperative Ghaziabad, NOIDA & Greater NOIDA:
Traditional industrial locations of Okhla, Mohan
Area and NOIDA Cooperative Area and NOIDA have been Ghaziabad is already home to several small and
have been saturated saturated especially with the entry of IT/ITeS medium industries and with the upcoming Taj
especially with the companies which have preferred these locations and Ganga Expressway the attention is steadily
entry of IT/ITeS as they are situated in the heart of the city. moving away from the established corridors of
companies which Additionally the Delhi Government's drive to NOIDA towards Greater NOIDA. Apart from
have preferred these relocate polluting units outside of the city has IT/ITeS, there are several other industries that
locations as they are further helped peripheral locations to develop are also evaluating possible opportunities of
situated in the heart into industrial locations while maintaining the foraying into the newly planned developments of
of the city. advantage of being close to the national capital. Greater NOIDA, along with developers who
This move has increased rentals due to high have already begun developing commercial, retail
demand, forcing industrial facilities to relocate to and residential projects to cater to these
peripheral locations of NCR in U.P and Haryana industrial pockets.
such as Rohtak, Bhiwadi and Greater Noida etc.
Haryana
Uttar Pradesh (UP) Haryana is one of the leading industrialised
Uttar Pradesh offers easy availability of land in states with an inclination towards the
239 fully developed industrial areas, spread over automobile industry. The state has the presence
37,388 acres. Its industrial infrastructure also of various manufacturing corporations such as
includes several Industrial Infrastructure Maruti Udyog, Honda, Escorts, Hero Honda.
Development Centres (IIDCs) and Already existing locations of Gurgaon and
approximately eight notified SEZs. There are Faridabad constitute towards the bulk of
various prevalent industries in this state which production and revenue generation for the state.
enables it to achieve the title of the 2nd largest Industries are considering other locations in
economy in the country. Agriculture continues order to avail cheaper rentals, incentives and
to remain the most prevalent sector after this robust infrastructure that is being provided by
the cottage industries of handlooms and the government.
handicrafts would be the most prevalent in this Some incentives include:
state providing employment to the large skilled
and unskilled worker base. • Interest free loan, quantified at 50% of tax
paid on sale of goods sold and 75% for food
The UP government or the governing body (in processing units, repayable after a period of
the case of NOIDA, Greater NOIDA etc.) offer 5 years
attractive incentives which are customised to

R E P O RT
• Subsidy up to 1% of FOB of export units impetus to transform the area into industrial
subject to a maximum of INR 1 Million P.A. zones. Haryana State Industrial Development
• Exemption from electricity duty for 5 years Corporation (HSIDC) has successfully
developed an Industrial Model Township in
Manesar, Dharuhera & Rewari: Manesar and is planning to develop an additional
2 IMT's. Companies like Hero Honda and Maruti
Located in Haryana (along NH 8) and in close Udyog are some of the major automobile giants
proximity to Delhi and Gurgaon, these regions already present here, along with several auto
have availability of large land parcels and lower ancillary units in the pipeline.
cost of labour which has provided the necessary
The focus of
development is
gradually shifting
from the peripheries
of major
metropolitan
centres to the
emerging locations
along highways,
railway corridors
and Tier II and III
cities, which are fast
emerging as the
future growth
centres.

R E P O RT
OUTLOOK
To maintain an accelerated growth of the eager to set up such units. The western and
economy, which is triggered mainly by the southern states of Maharashtra and Tamil Nadu
booming services sector, the government has have successfully attracted various domestic and
taken a keener interest in the country's global automobile manufacturers and numerous
industrial sector.Various state governments have auto ancillary units. In the north, the automobile
also taken major initiatives to attract industries sector is limited to NCR, while the eastern
and generate revenue as well as employment in states have a major focus on steel and heavy
their respective states by promoting existing or engineering.
new industrial sectors. It is observed that certain
State governments have also geared up in their
industries prefer certain specific geographical
own ways to develop themselves as facilitators.
locations due to their inherent attributes and
They have proactively announced many
classical factors of economies of scale and
incentives and are developing areas to cater to
benefit from the synergies due to the presence
the growing demand from the industrial sectors.
of other industries in the vicinity. However, this
The Central Government has in turn eased
scenario is rapidly undergoing a transformation
certain regulatory requirements to further the
and industrialists are now willing to explore
cause pioneered by the state government. States
newer horizons and leverage incentives offered
such as Himachal Pradesh, Jharkhand and Andhra
by the various state governments and ease of
Pradesh have initiated single window clearance
operations. The state governments have been
in an attempt to accelerate and ease the
conscious in assessing their states both in terms
processes. Similarly the eastern states of
of the traditional benefits enjoyed states enjoy as
Jharkhand and Orissa have assured assistance
well as evaluating their regions for setting up of
and subsidy in land acquisition. Uttaranchal,
new age industrial activities which would
Gujarat, Jharkhand and Tamil Nadu have provided
enhance their state's revenue flows and
tax holidays and concessions on investments
economic growth.
industrial development. There are also special
New age sectors like food processing, subsidies for employment generation in West
pharmaceuticals and biotechnology, along with Bengal and capital investment and fixed assets in
IT/ITeS are some of the industries are being Uttaranchal and Maharashtra.
preferred for promotion by most state
Our studies have revealed that various industrial
governments due to their non-polluting and high
growth centres have been developed across the
return nature. However, the western and
country, covering a total development of
southern zones have been the principal hubs,
approximately 363,263 acres. The southern zone
where most of the major players of the new age
being the frontrunner, has the largest share
sectors are already present. Whilst there is not
amounting to approximately 236,656 acres
exactly an equitable distribution of industries
spread across the three major states of Tamil
across the country with clear pockets of
Nadu, Karnataka and Andhra Pradesh, followed
development of a certain kind of industry in
by the west. The government acknowledges the
certain specific states, however, most states are
role of SMEs and their growth has been
trying to attract more and more industries from
exemplary, particularly of industries like
different sectors.
automobile, steel products, machine tools,
The northern states of Himachal Pradesh and textiles and apparels, chemical and
Uttaranchal have been promoting their industrial pharmaceuticals.
locations to attract industries like food
Several international corporations continue to
processing and pharmaceutical units. Similarly,
exhibit their confidence in India for outsourcing
the textiles and apparel industry is also spread
their manufacturing facilities and backend
across the country, with most state governments

R E P O RT
activities. Industrial segments like retail, telecom, There is a definite movement of industrial
banking, logistics and IT are expected to sustain clusters from peripheries of major Tier I cities to
their performance, leading to increased demand locations along highways, railway corridors and
for land in and around key growth centres. The other means of connectivity there by promoting
clustering of industries will continue to take tier II and III locations.
place resulting in greater efficiency and lower
costs for manufactures. Encouraging the growth
of sector-specific industries in suitable locations.
This in turn will add to the unique dynamics
prevalent in the distribution of land holdings,
town planning and developments in each
location.
Corridor Analysis
North* East** West*** South****

• Food Processing • Steel and Engineering • Automobile and Auto • Automobile and Auto
• Pharmaceutical and • Food Processing and Components Components
Biotechnology Agro Based industries • Pharmaceutical and • Food Processing
• Textiles and Garments • Chemicals and Biotechnology • Pharmaceutical and
Industries
• Gems and Jewellery Pharmaceuticals • Textiles chemicals
• Automobiles and White • Food Processing and • Textiles/ Apparel
goods Agro Based industries • Engineering
• Mining and Minerals
• Textiles and Hosiery
• Single window • Waiver on electricity • 100% exemption of • Simplified procedures &

clearance duty for electricity duty in group single window
• Subsidy on capital 5 years C category and beyond clearance
investment • 50% reduction on for 15 years • Develop and modernise
• Exemption on excise stamp duty and • 100% exemption of sea ports
Advantages duty and income tax registration stamp duty • Foreign Investment
• Priority of land • Assistance in land • Refund of octroi promotion Board for
allotment on industrial acquisition and subsidy • Special Capital speedy clearance
areas in allocation Incentives (SCI) to all • Investment subsidy on
• Octroi exemption • Priority in power SSI units on fixed assets for
allocation in growth • Assistance for Research industries in backward
centers and Development and area
• Subsidy on interest, Patent registration • Sales tax concessions
employment generation, • Interest subsidy to new • Sales tax deferment for
use of piped gas and textile, hosiery, and 10 years
investment capital knitwear SSI units • Incentives to
rehabilitate sick
industries
SEZs 21 11 42 107
Industrial
Growth 11,009.57 64,793
50,804.42 236,656
centers
(Acres)
* Haryana, Uttaranchal, Himachal Pradesh, Punjab, Uttar Pradesh and Rajasthan

** West Bengal, Jharkhand and Orissa
*** Maharashtra and Gujrat
**** Karnataka, Andhra Pradesh and Tamil Nadu

R E P O RT
CONCLUSION
India Inc has already started to look beyond Although India has a large domestic aspirant
Tier I and II and established industrial hubs for consumer base which will eventually help
more cost effective/improved solutions in the mitigate the ripples of this global meltdown,
wake of rising values and the increasing space going forward India will not remain completely
crunch in established business districts, especially insulated from the global occurrences. It is
in order to attain first - mover advantage in anticipated past this period of economic
these maiden locations. In the same way, the slowdown, India will be one of the stronger
industrial locations too are undergoing economies to be able to recover faster than
transformation as new locations are being others and continue its growth story to
explored by aspiring industrialists, eager to reinforce the possibility of an undisputed
accrue the benefits offered by emerging increase in GDP growth rate in the future. This
corridors through improved and innovative will potentially rejuvenate the urban markets
infrastructure. It is also witnessed that major which is evident from the diverse availability of
industrial players are also considering these indigenous products and increasing middle class
upcoming locations for their expansion plans, consumables, which will lead to the generation
resulting in rapidly changing topography of many of a stronger consumer base, entrepreneurs and
exurbs along strategic locations such as freight businesses. The economic growth will be
corridors and highways. sustained by increased capital expenditures and
infrastructure initiatives undertaken by the
As India moves towards becoming more and government to boost various sectors within the
more industrialised, in the long run there would nation leading to the emergence of a new
be growth of several other regions which are generation of Indian entrepreneurs.
currently under-utilised from an industrial stand
point, leading to a strengthening of their base A Cautious Note
and to a healthy, more competitive relationship
with other traditionally strong industrial states Observations Impact
and clusters. This process would inevitably lead
Industrial production Dropped from 12% in
to enhanced local employment opportunities October 2007 to 5.45%
coupled with a more equitable spread of wealth in September 2008
within India.
Economic 9% in the last 4 years to
However, India has not escaped unscathed from 6.9% in 2008
the global financial meltdown. The fall in GDP Exports 15% fall in exports in
growth from 9.0% in the previous years to an October 2008
estimated 6.5-7.0% for 2009 is likely to impact all compared to same time
last year
sectors of the economy. Slump in exports,
coupled with high interest rates has reduced High Interest Rates Reserve bank of India
consumption in domestic market. This has led to PLR between 12.75% to
13.25%
a steep deceleration in industrial production
growth which dropped from 12% in October Source: Ministry of Commerce,World Bank and
2007 to 5.45% in September 2008. Cushman & Wakefield Research

R E P O RT
ABOUT THE INDUSTRIAL SERVICES GROUP
Our industrial services team works closely with Our services are applicable to any of the diverse
clients to understand and evaluate their overall product types categorised as industrial buildings,
business and growth strategies and provides from manufacturing plants and traditional
solutions in sourcing, developing or disposing warehouse/ distribution facilities to more
industrial properties across India. Our specialised research and development facilities,
professionals offer a comprehensive range of warehouse/ showroom (flex) space and high-
services, including facility, site and land tech laboratories. Our diverse portfolio is
acquisition and disposition; lease/ sale spread across sectors that include telecom,
negotiations based on market knowledge and ceramic, food processing, automobile &
current trends; project management as well as automotive components and electrical industry
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TO DISCUSS YOUR IMMEDIATE NEEDS PLEASE CONTACT:
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Industrial Services, India
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Project Management, India
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R E P O RT
Bibliography:
Brochures / Information booklets
• World Economic Outlook, October 2008 – International Monetary Fund.
• The Global Competitiveness Reports 2008-09, October 2008 – World Economic Forum.
• “Made in India”, September 2005 - McKINSEY and Confederation of Indian Industries (CII).
• Industrial, Investment and Infrastructural Policy of Maharashtra – 2006,
Government of Maharashtra.
• Gujarat Industrial Policy – 2003, Government of Gujarat.
• Website: www.sezindia.nic.in
About Research & Business Analytics Group Cushman & Wakefield is the world's largest For more information on
Cushman & Wakefield is committed to collation of high privately held commercial real estate services firm. Cushman & Wakefield, contact :
quality base data and assembling detailed statistics for Founded in 1917, it has 221 offices in 58 countries Anurag Mathur
the major India markets on a regular basis. This and more than 15,000 employees. The firm Managing Director, India
commitment to quality research provides a strong represents a diverse customer base ranging from Tel: +91 80 4046 5555
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analytical reports are also developed to meet the
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Services, including business and real estate
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For more information:
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+(91 124) 469 5555
tanuja.pradhan@ap.cushwake.com
Author of the report:
Ashim Bhanja Chowdhury
Senior Manager
ashim.chowdhury@ap.cushwake.com
Ray Kallimel
Manager
ray.kallimel@ap.cushwake.com
Satish Tiwari
Manager
satish.tiwari@ap.cushwake.com
Disclaimer
This report has been prepared solely for information purposes. It does not purport to be a complete description of the markets or developments contained in this material. The
information on which this report is based has been obtained from sources we believe to be reliable, but we have not independently verified such information and we do not
guarantee that the information is accurate or complete.

www.cushmanwakefield.com
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R E S E A R C H A N D B U S I N E S S A N A LY T I C S G R O U P | M a r c h 2 0 0 9

1 Executive Summary 10 Southern Corridor:

6 Major Manufacturing Clusters 24 Outlook

7 Western Corridor: 26 Conclusion

INDIA REPORT | MARCH 2009 1

MAJOR GROWTH DRIVERS FOR MANUFACTURING IN INDIA

INDIA REPORT | MARCH 2009 2

INDIA REPORT | MARCH 2009 3

INDUSTRIAL SECTOR - THE REAL ESTATE PERSPECTIVE

Real estate is a major cost component for most

cumbersome therefore each manufacturing set up has to

SOME OF THE MAJOR ISSUES AND CONCERNS IN LAND ACQUISITION

INDIA REPORT | MARCH 2009 4

INDIA REPORT | MARCH 2009 5

MAJOR MANUFACTURING CLUSTERS

INDIA REPORT | MARCH 2009 6

Western Corridor Western Corridor - Land Value Trend

Existing Corridors Land Values Outlook

Automobile Trans-Thane Creek -30%

INDIA REPORT | MARCH 2009 7

INDIA REPORT | MARCH 2009 8

INDIA REPORT | MARCH 2009 9

Southern Corridor Southern Corridor - Land Value Trend

INDIA REPORT | MARCH 2009 10

INDIA REPORT | MARCH 2009 11

machine tools, steel, cement, pharmaceuticals, Mangalore

INDIA REPORT | MARCH 2009 12

commencement and expansion and Tamil Nadu Sriperumbudur

INDIA REPORT | MARCH 2009 13

INDIA REPORT | MARCH 2009 14

Eastern Corridor Some key policies and incentives offered by the

INDIA REPORT | MARCH 2009 15

INDIA REPORT | MARCH 2009 16

INDIA REPORT | MARCH 2009 17

INDIA REPORT | MARCH 2009 18

Northern Corridor Northern Corridor - Land Value Trend

Existing Corridors Land Values Outlook

INDIA REPORT | MARCH 2009 19

• Simplification of rules and procedures by the • Promote private sector participation in

• Stamp duty concessions to be provided for • Infrastructure development though private

INDIA REPORT | MARCH 2009 20

Upcoming industrial infrastructure in Punjab • Project of upto 3 crores to be cleared by the

INDIA REPORT | MARCH 2009 21

INDIA REPORT | MARCH 2009 22

INDIA REPORT | MARCH 2009 23

INDIA REPORT | MARCH 2009 24

North* East** West*** South****

• Single window • Waiver on electricity • 100% exemption of • Simplified procedures &

* Haryana, Uttaranchal, Himachal Pradesh, Punjab, Uttar Pradesh and Rajasthan

INDIA REPORT | MARCH 2009 25

INDIA REPORT | MARCH 2009 26

ABOUT THE INDUSTRIAL SERVICES GROUP

TO DISCUSS YOUR IMMEDIATE NEEDS PLEASE CONTACT:

INDIA REPORT | MARCH 2009 27

INDIA REPORT | MARCH 2009 28

©2009 Cushman & Wakefield

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C&W Industrial Sector in India

C&W Industrial Sector in India

North* East West* South****