Why is Gujarat Considered the Best-Industrialized State in India?

Gujarat as the Backbone of India’s Industrialization

Gujrat is a state that receives the most attention when the conversation is about commerce, business and industrialization.

According to a study by the Planning Commission, Gujrat is the second most industry-friendly state in India and is considered to have the most vibrant economy.

The state benefits tremendously due to its location on the west coast of India having a clean route to all the major cities and good transport facilities through air and water for international business and trade.

The state government has also put emphasis on housing Gujarat International Finance Tec-City, which is India’s first SEZ(Special Economic Zone) for International financial services.

Flourishing Gujarat

The sectors that favour the industrialization of Gujrat are namely – petrochemical, pharmaceutical, drugs, minerals, IT, dairy, jewellery, textile, etc.

Gujarat reckons for 11-11.5 per cent of the country’s industrial production and 40 per cent of the Gross State Domestic Product (GSDP) at present.

Agricultural offerings of Gujrat are comparatively higher than in states like Maharashtra and Tamil Nadu.

Agriculture supplies 13 per cent of Gujarat’s GDP and reinforces 53 per cent of the inhabitants. All of this has been possible due to the ascent in yield.

Also, Gujarat is renowned for its diamond production. It reckons for about 72 per cent of the world’s processed diamond share and 80 per cent of India’s diamond exports.

Major Industries in Gujarat

i) Automobile 

Gujrat has at present developed as one of the most efficient fabricators of automobiles. Various prominent automobile companies like Suzuki Motor, Ford India, Honda, and Hero MotoCorp have invested their time and capital in establishing plants around Gujarat.

Sanand is a city in the Ahmedabad district of Gujarat which is also renowned as “the automobile hub of Gujarat”.

The city receives visitors from all across the globe who want to be a part of it and are eager to invest in Gujarat’s automobile industrialization.

ii) Pharmaceuticals 

Gujrat ranks in the top 5 when the topic is about medicines and drugs. The state has authentic drug manufacturing facilities.

Gujarat represents a third of all Indian pharmaceutical production and the Gujarat FDCA is putting in work to improve the framework of its medicinal industries.

“Dahej” meaning dowry in Hindi is India’s first specialized chemical port situated in Gujrat that supplies storage for goods handling and storing liquid and gaseous chemicals, petrochemicals, and petroleum products. This facilitates and boosts drug handling and storage.

iii) Agriculture 

Gujarat is one of the biggest agricultural centres in India. The principal crops grown here are tobacco, cotton, groundnuts, rice, wheat,  maize, jawar, bajra, tur, and gram.

The state’s crop area adds up to more than one-half of the total land area. Animal husbandry and livestock rearing are also an important part of Gujarat’s agriculture and the state is one of the leading processors of milk in India.

iv) Jewellery 

Gujarat has one of the biggest diamond industries in the world. Located in Surat, the industries hold 55 per cent of the world market in terms of interest. The state is often known as the  ‘Silky City Sparkling with Diamonds’.

According to a report in 2005, Gujarat had mined diamonds worth more than 9000 million USD.

There are more than 10000 diamond units all across the state. The diamond industry is the second highest foreign exchange earner in the Indian economy.

v) IT 

The investments in the IT industry of Gujarat have changed remarkably since 2005 from Rs 700 crore to Rs 35,200 crore in 2015.

The state is rapidly developing towards becoming the most important centre of technology startups.

The state ranks second with a 16 per cent share in terms of total outstanding investments in the IT/ITeS sector countrywide.

It is estimated that the IT industry of Gujarat might attract more than Rs 2 lakh crore in 2022. Most of the IT sectors in Gujarat are located around Surat, Ahmedabad, etc.


In Ahmedabad of Gujarat, a Gujarat International Financial Tec-City (GIFT City) has been established as India’s first International Financial Services Center (IFSC) for the offshore financial market investors.

Several tax liabilities like GST, capital gains tax for entities operating, etc have been surrendered in GIFT City.

Setting up in IFSC GIFT City will provide the offshore investors with the advantage of zero tax on bond trading and zero tax on derivative trading.

Facilitated Exports

There is a big role of export in Gujarat’s economic augmentation. The state government teamS up with national and state-level export councils to ease the function of export.

Exporters are supplied with a showcase cum convention hub where they can unveil their products.

These showcases are important platforms for bodies, especially MSMEs, to interact with international buyers and suppliers.

In association with the Ahmedabad Management Association (AMA), the state government also conducts orientation workshops, allocating exporters to aggrandize and describe their products.

Industrial Ecosystem

Gujrat reinforces about 16 per cent of industrial production in India. The state has gained 22 per cent of incoming foreign investment worth US$18.59 billion between October 2019 and September 2020.

The state allocates appropriate business through a relationship manager who acts as a single point of interaction for all government-related topics.

A foundation for online permissions is being worked out, where investors only need to submit one application form for 26 state-related Assets and approvals.

Micro, small, and medium enterprises (MSMEs) are also very crucial in the industrial ecosystem. The state government has taken initiatives to ease the development and

assortment of the state’s MSME ecosystem.

This includes the foundation of MSMEs in 11 districts. At present, Gujarat’s MSME ecosystem aims to be popular at an international level by facilitating higher exports, superior capital management, global supply chain integration, and being ability to access global markets.

The expected result is supposed to be foreigners getting eager to invest directly in the state’s MSME. Hence, Gujarat flourishes the Industrial ecosystem vibrantly.

All of it allows Gujarat to claim its title as the “most industrialized state of India”.


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