After Japan, Gujarat attracts FDI from China, South Korea and Taiwan
After growing by four times when compared to FY14 levels, foreign direct investment (FDI) to Gujarat continues to grow. While Japan has led the FDI growth in Gujarat in recent years, Asian countries like Taiwan, China, and South Korea are also lining up investments in the state.
According to sources in the state government, around five or six Taiwanese companies have evinced an interest in investing close to $3 billion in Mundra in refinery and petrochemical projects. "This would be the first phase of investments planned. In the second phase, around 25 Taiwanese companies have sought land for setting up a Taiwanese Industrial Park here," informed a senior official in the state government.
Land for the proposed Taiwanese park has been shortlisted near Khoraj, close to Gujarat's auto hub Sanand. These companies are interested in investing in the electric vehicles and electronics projects here, the source added.
Japanese companies have invested close to $1 billion in Gujarat so far and the same is expected to double by 2019. The Taiwanese investment plan thus assumes significance.
This apart, around six Chinese companies have sought land for an industrial cluster, informed the source. Talks are on between Chinese companies and the state government for a Rs 2,500-crore LED project. Meanwhile, China's Sunrise Group has announced an investment of Rs 6,000 crore to set up a steel plant at Mundra in Kutch. The project has an Ahmedabad-based partner, Chromeni Steels Private Ltd, which was incorporated in June 2017 as a private limited company. It is a subsidiary of the Sunrise Group and has nine directors on board from both India and China.
Around 200 hectares of land has been shortlisted for this project and some acquisition has started in the Rapadiya and Kundardi villages in Kutch. Sources said that the investment could be scaled up eventually to Rs 10,000 crore.
A delegation from South Korea, too, has met the state government officials here recently and they are looking at investment opportunities in the textiles and chemicals space.
"Gujarat not only has a stable government and is known for fast clearances, but it also has a great advantage of port connectivity. Most of these countries have a 'Look South' policy and while they would target the Indian market in the initial stages, the long-term plan is to export from here to African countries. Gujarat offers a good connectivity option for the African continent," explained a senior official here.
As such, FDI inflow to Gujarat rose from $2.24 billion in 2015-16 to $3.36 billion in 2016-17, up 50 per cent. The growth is almost four times when compared to 2013-14 levels.
Japan led the FDI growth in Gujarat in recent years. Suzuki's Rs 3,000-crore investment, along with Honda Motorcycle and Scooter India's Rs 1,100-crore one, are some of the big-ticket Japanese investments in the state in recent times. The Japanese industrial park is expected to draw investments worth around Rs 25,000 crore. The flagship project, however, is the Rs 1-lakh crore High-Speed Train project, popularly called the Bullet Train to Mumbai.
Around 80 Japanese companies now operate from Gujarat. A 1,750-acres integrated industrial township is coming up at Vithalapur, near the Suzuki Motor Gujarat and Honda Motorcycle and Scooter India sites. Around 1,200 acres have been earmarked for industries (focus industries being defence and aerospace, automotive and ancillaries, engineering, electronics, and pharmaceuticals). Industrial plots, developed according to Japanese specifications, would be up for sale for companies to start work on a plug-and-play basis. Around 550 acres are for residential, commercial, and recreational purposes.