The year 2024 is big for Gujarat as it is set for the 10th edition of the biennial Vibrant Gujarat Global Summit (VGGS), the first in five years since 2019. Touted as the Davos of the East, the three-day summit will be held between January 10 and 12 in Gandhinagar and will be inaugurated by Prime Minister Narendra Modi.
With the ambition to become a $1 trillion economy by 2030, Gujarat is all decked up for world to arrive on its doorstep this month with investments worth billions of dollars at the Vibrant Gujarat Summit. Businesses and foreign governments alike are captivated by the state’s phenomenal industrial growth and mega projects such as the GIFT city, DREAM city, Dholera SIR and the world’s largest hybrid renewable energy park, and are bullish on the state’s future prospects.
With political winds blowing favourably for Prime Minister Narendra Modi ahead of the 2024 general elections, the investment climate in the country and particularly in his home state Gujarat remains attractive as a financially secure economic hub for businesses owing to political continuity and stability.
Enthusiasm Palpable for Vibrant Gujarat
The enthusiasm is palpable already, as weeks ahead of the summit, companies across many sectors have already signed initial investment pacts totalling $18.75 billion worth of projects they intend to build in Gujarat.
Organised by the state government, the Vibrant Gujarat Summit functions as a forum where business leaders, investors, policymakers, and thought leaders convene to forge new business prospects, focused primarily on the Western Indian state.
As many as 28 countries and 14 organisations including Australia, the UAE and the UK, have so far confirmed to be partners at the summit. Others include Bangladesh, Czech Republic, Egypt, Estonia, Finland, Germany, Indonesia, Japan, Kenya, Malaysia, Malta, Morocco, Mozambique, Nepal, Netherlands, Norway, Poland, Republic of Korea, Rwanda, Singapore, Tanzania, Thailand, Uruguay, Ghana, and Vietnam. Partner countries come with ministerial delegations and will be given the opportunity to seek investments in their own economies from a vast pool of Indian and international business delegations arriving from around the world.
Expanding beyond traditionally targeted sectors, the government is directing substantial attention this year towards emerging industries, including semiconductors, electric vehicles, aircraft and space technology manufacturing, green hydrogen and other renewable energy-related manufacturing.
The Gujarat Model
Serving as a pioneering ace card, the Vibrant Gujarat Summit is a key reason for the success of the often-exalted Gujarat model, which rose to fame during then Chief Minister Modi’s tenure between 2001 and 2014.
With an estimated population over 70 million people, Gujarat is a significant player in India’s economic landscape as the third-largest and one of the fastest growing economies in the country. According to Chief Minister Bhupendra Patel, the summit’s success has driven Gujarat’s Gross State Domestic Product (GSDP) from Rs 1.42 lakh crore in 2003, when the first summit took place, to Rs 22.61 lakh crore in 2023, marking a cumulative annual growth rate of 15%, surpassing the national average.
Today, Gujarat stands as one of the premier investment destinations in the country, attracting Foreign Direct Investment (FDI) amounting to Rs 2.39 lakh crore ($31 billion) from October 2019 to March 2023. The state witnessed a remarkable surge of nearly 84 percent in FDI during the fiscal year 2022-23, marking the highest growth among all states and Union Territories, according to the VGGS website.
Mega Projects
Gujarat’s mega projects have a magnetic allure to them, bolstered by the vision and ambitions of the state government and Prime Minister Narendra Modi himself, which has led to greater interest from investors world over.
Among these is GIFT or the Gujarat International Finance Tec-City (GIFT), a dream project of PM Modi, which is the country’s first smart city and it is coming up fast. The vast infrastructure project is set to expand to more than twice its size from the current 1,065 acres to nearly 3,365 acres. The city was also recently exempted from the state’s liquor ban to enhance its allure for global investors.
Envisioned in 2007, and launched in 2011, the stated goal of the city is to become the premier financial capital of the country, rubbing shoulders with the likes of international financial hubs such as New York City and London. It offers a specialised economic zone with infrastructure and services tailored for financial institutions and companies involved in banking, insurance, capital markets, and asset management.
The city stands as a vibrant centre, primarily accommodating banks, capital market entities, insurance firms, and in-house manufacturing units. At present, it accommodates a workforce of over 20,000 individuals from 400-plus companies, including prominent names such as Oracle, Bank of America, Cyril Amarchand Mangaldas law firm, Citibank, State Bank of India, Bombay Stock Exchange, and the National Stock Exchange. GIFT City also houses a commodity bourse and a bullion exchange, boasting an impressive average daily turnover of $4 billion.
Last year, PM Modi highlighted certain enduring areas of focus for GIFT City, envisioning it as a hub for climate financing, aircraft and ship leasing, and a leading fin-tech laboratory.
Another mega project is the DREAM city short for the Diamond Research and Mercantile City, an up and coming business hub in Surat focused on the gleaming behemoth that is the Indian diamond industry. It is home to the spectacular Surat Diamond Bourse— the world’s largest office building with 4500 offices.
The Dholera SIR mega project is another enormous undertaking of the Gujarat government. This special investment region is a greenfield industrial planned city in Ahmedabad with airport and port connectivity along with impeccable metro and road access, and is taking shape fast.
Further, India is undertaking the construction of a mammoth hybrid renewable energy project in Gujarat, called the Khavda Renewable Energy Park, at an estimated cost of $2.26 billion. Three years from now, the inhospitable desert in the Rann of Kutch will host the largest operational renewable energy park in the world, almost the size of Singapore with a whopping power generation capacity of 30 gigawatts.
Enhanced Connectivity & Ease of Doing Business
In the last 20 years, Gujarat has witnessed an epic turnaround in its fortunes. Battered by natural disasters, droughts and sectarian violence, the state’s leadership under Narendra Modi pushed for enhanced ease of doing business to boost the investment climate in Gujarat. Today, the state ranks at the top in the centre’s ease of doing business rankings. Land acquisition and infamous clearance delays were done away with in a revolutionary manner. Power deficits were addressed with a turnaround in the power industry. Water scarcity was addressed with massive canal and dam projects like the Narmada Main Canal, the Sujalam Sufalam Yojana, Sauni Yojana and the Sardar Sarovar Dam.
The state is also well connected through airports, ports, road and rail with more mega projects in this realm, particularly the high-speed bullet train project between Mumbai and Ahmedabad.
The evolution of business conditions in Gujarat, coupled with cutting-edge infrastructure and government backing, has guaranteed a sustained positive outlook for the state. The Vibrant Gujarat Summit is poised to cash in on this track record of the Gujarat story, and forge a promising path ahead for the state.
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