MENLO PARK, Calif. – Gujarat, India’s fastest-growing state, is poised to serve as the country’s biotechnology hub, said Dhananjay Dwivedi, secretary to the Gujarat Government, at a “Vibrant Gujarat” luncheon here Sept. 13, hosted by the U.S. India Business Council.
Approximately 160 biotech companies are already located in the state, said Dwivedi, the lead advisor to the Gujarat government in the sectors of science and technology. The state will reap $100 billion by 2025 in the biotech sector, the secretary predicted, adding that biotechnology was one of the fastest-growing industries in the state. Moreover, the majority of India’s biotech sector is headquartered in Gujarat, he said, adding that the government is now creating “corridors” to ease collaborations between universities and companies in new discoveries.
“The next five years in Gujarat belong to biotech,” stated Dwivedi, adding that the innovation coming out of universities in the state was “phenomenal.”
A delegation of top officials and business leaders from Gujarat were stopping in at various locations across the U.S. to highlight the “Vibrant Gujarat” 8th Global Summit, taking place at the Mahatma Mandir in Gandhinagar from Jan. 10-13, 2017. Dwivedi invited the group of business leaders attending the luncheon to join him in Gujarat next year.
“We are trying to position Gujarat as the gateway to India,” he said, noting that Gujarat is currently the world’s number 1 investment destination.
Gujarat’s electronics manufacturing and design sector is expected to grow to $400 billion by 2020, increasing at an annual compound annual growth rate of 66 percent, said Dwivedi. The state’s information technology sector is expected to reach $300 billion by 2020, he noted, adding that social media and online purchasing are key drivers of the state’s growth. “We want you to be part of that growth,” he told the audience of investors and businessmen, many of them Indian American.
Sudhir Vaid, chairman and managing director of Concord Biotech, based in Ahmedabad, said he started his company in 2000 with just one product and three employees. Sixteen years later, Concord has developed 24 biopharmaceuticals, which it supplies to 50 countries across the globe.
Vaid, who is from Punjab, said he chose Gujarat because of its tremendous infrastructure, talent from local universities, and a consistent supply of power, which is uninterrupted 24x7. Raw materials for his products are readily available and locally produced, said Vaid, noting that Gujarat is a hub for the chemical industry as well.
“Bharat today with biotechnology equals the Bharat of tomorrow,” said Vaid, quoting Prime Minister Narendra Modi, who was chief minister of Gujarat from 2001 to 2014.
Vinay Shah, the U.S.-based director of Hester Biosciences, headquartered near Ahmedabad, told India-West on the sidelines of the luncheon that the Gujarat state government has fostered the growth of his company, which develops and manufactures 60 percent of the animal vaccines used in India. Hester also provides its animal vaccines to other countries throughout the globe.
In its 2015 report measuring the ease of doing business in Indian states, the World Bank ranked Gujarat as number 1, with a score of 71 percent. Andhra Pradesh came in second place, with a score of 70 percent.
Gujarat contributes more than seven percent of India’s annual GDP. Ten percent of India’s factories are housed in the state, which produce 19 percent of India’s exports and a similar percentage of its industrial output. More than 41 percent of India’s port cargo is handled in Gujarat.
The state also produces 80 percent of India’s diamond exports, 66 percent of India’s salt, 65 percent of its plastics, more than half of the country’s crude oil, and two-thirds of its petrochemicals.
In response to a question from India-West, Dwivedi stated that the new Goods and Services Tax initiative was an “excellent example of reform” which would encourage foreign direct investment.
Currently, he noted, starting a company in India involves paying at least five taxes to different entities – possibly in different states – each governed by their own set of regulations and multiple individuals.
The new GST – passed in August by both houses of Parliament and ratified this month by Indian President Pranab Mukherjee – simplifies the process to only one tax rate, one tax code, one set of regulations, managed by a single entity. “This is hugely positive for everyone,” said Dwivedi, noting that the initiative would entice investors from abroad.
Jay Ruparel, co-founder and executive director of Azure Knowledge Corp., said he had picked Gujarat in 2001 because of its infrastructure, and an environment that is “very business prone.”
“There is a lot of dynamism in the state in which change is transformed into tangible metrics,” he said, noting that the state government has set up several initiatives to encourage collaboration between companies. New policies in the state are based on input from industry,” he said.
“Gujaratis are known worldwide as successful entrepreneurs,” he said.
Azure Corp., which now has 1,500 employees, is the largest knowledge-processing outsourcing company in India.
Rahul Agarwal, a leader of the Invest India initiative developed by the Modi administration, noted that India will be the world’s fifth largest economy by 2020. The country will also be the world’s largest aircraft market, and will spend $130 billion in defense, he said.
Invest India aims to handhold foreign investors in the process of investing in India. “We want to move from ‘red tapeism’ to the red carpet,” he said, noting that the Indian government recognizes the challenges of doing business in India.