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Gujrat, a coastal state in Western India is being dubbed ‘India’s Guangdong’ because of its rapid industrialisation.The state has historically produced traders, and has predominantly been known for its diamond exports, salt and petrochemical production, and onshore crude oil, but now, The Economist reports that it accounts for 16% of India’s industrial output and 22% of its exports.
Gujrat posted just under 12% growth in 2010, compared with national GDP growth that stayed just below 9%. It even posted double digit growth during the economic crisis. The region is fast becoming a refineries and ports hub and expectations are that exporters will be switching from China to India, giving Gujrat’s textile industry a huge boost. What’s more, in a country riddled with corruption, Gujrat is being flagged as a state with better bureaucracy.
The state has been drawing huge investments from some of India’s biggest companies. The Economic Times reported that Indian billionaire Anil Ambani plans to invest about $11 billion in Gujrat over the next five to seven years as he is bullish on the state’s power sector. Meanwhile, the Tata Group which began in Gujrat currently has about $7 billion in investments in the region.
Narendra Modi, the current chief minister of Gujrat has been credited for driving investments to the state. He is is expected to enter the race for national leadership in 2012. Modi however has been unable to shake off allegations brought against him in the violent Gujrat riots in 2002 in which over 1,000 people were killed and hundreds went missing, and poltical risks remain a concern for investors in the region.
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