Emerging Business Hubs in India: How Gujarat Increasingly Attracts International Companies

Magna International Inc. is a good example for companies that have recognized the potential of Gujarat. The global automotive supplier has expanded its presence in India by opening two new manufacturing facilities in the Sanand region around Ahmedabad. These facilities focus on producing complete seat systems and body and chassis systems. The first facility, with an area of 215,000 square feet, is estimated to have approximately 200 employees and produce around 240,000 complete seat systems annually. The second facility, spanning 356,000 square feet, has about 400 employees at full production.

Regarding Magna’s decision to expand to Gujarat, what has attracted the international supplier to this region? Firstly, compared to long established business areas, Gujarat provides more cost-effective operations due to lower expenses in real estate, labor, and resources. This is complemented by substantial investments in infrastructure, transport, digital connectivity and urban development, that all enhance the accessibility and business-friendliness of this region, providing a fertile ground for businesses and start-up ecosystems to grow.

Furthermore, numerous local educational institutions like Gujarat Technological University (GTU), National Institute of Design (NID) or the Indian Institute of Technology Gandhinagar (IITGN) ensure a steady supply of talents and skilled labor.

Gujarat’s geographical positioning along the western coast of India provides it with extensive coastline and port access. This advantage is not only important for international trade but also for internal connectivity with other major Indian cities. Ahmedabad, being well-connected by air, road, and rail, acts as a crucial hub in this network. The development of the Delhi-Mumbai Industrial Corridor (DMIC) further strengthens Gujarat’s logistical advantage.

Lastly, Gujarat’s  government is known for its business-friendly policies, offering various incentives, subsidies, and ease of regulatory procedures. The state has implemented single-window clearance systems, reducing the hurdles for setting up new businesses or expanding existing ones.

A significant development enhancing the role of Gujarat is the introduction of a high-speed train, the Mumbai-Ahmedabad High-Speed Rail (MAHSR). The corridor spans approximately 508 kilometers, connecting two major economic hubs: Mumbai, the financial capital of India, and Ahmedabad, a rapidly growing city in Gujarat. Built with support from the Japan International Cooperation Agency (JITA), the Shinkansen-based trains on this route are expected to run at a maximum speed of 320 km/h, drastically reducing the travel time between Mumbai and Ahmedabad to about 2 hours, compared to the current 6-7 hours by conventional rail. The corridor will include about 12 stations, strategically located to serve various urban and industrial areas along the route. These include Thane, Virar, Boisar, Vapi, Bilimora, Surat, Bharuch, Vadodara, Anand, and Sabarmati. The corridor will also largely be elevated, with a small portion going underground, particularly in Mumbai. The project includes the construction of tunnels, bridges, and viaducts to navigate the challenging terrain.

Enhanced Connectivity and Economic Integration: High-speed trains will integrate these emerging cities more closely with major economic centers, facilitating easier movement of goods and labor.

Boost to Tourism and Local Economies: Improved accessibility will likely boost tourism, benefiting local businesses and industries.

Increased Real Estate Development: The anticipation of high-speed rail has already spurred real estate development in and around these cities, attracting more businesses and residents.