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Gujarat Sees 42% Surge In FDI Inflows, Maintains Strong Investment Appeal

Updated: Sep 04, 2024 02:45:12pm
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Gujarat Sees 42% Surge In FDI Inflows, Maintains Strong Investment Appeal

Gandhinagar, Sep 4 (KNN) Gujarat continues to solidify its position as a preferred destination for foreign direct investment (FDI) in India, according to the latest report from the Department for Promotion of Industry and Internal Trade (DPIIT).

The state recorded FDI inflows of Rs 8,508 crore in the first quarter of fiscal year 2025, marking a significant 42 per cent year-on-year increase from the Rs 5,993 crore reported in Q1 FY 2024.

Despite this growth, Gujarat's ranking in absolute FDI inflows has shifted to fifth place nationally. The state now trails Maharashtra, Karnataka, Delhi and Telangana in Q1 FY 2025 FDI figures.

However, Gujarat's cumulative FDI inflows since October 2019 remain impressive, totalling Rs 3.08 lakh crore. This places the state third in India, behind Maharashtra and Karnataka.

The state has shown consistent growth, with FDI inflows increasing by 25 per cent from June 30, 2023, to June 30, 2024, and by 35 per cent over a two-year period.

Industry experts attribute Gujarat's investment attractiveness to several factors. The state has adopted a policy-driven approach with clear incentives for new investments, which has been instrumental in attracting foreign capital.

Additionally, Gujarat has focused on improving its social infrastructure, making it an attractive destination for both businesses and workers.

A key strategy that has paid dividends is Gujarat's cluster-based development approach. This has allowed for the creation of specialised industrial zones that cater to specific sectors, fostering an ecosystem of primary manufacturers and ancillary industries.

The state's strong connectivity to ports has also played a crucial role in its appeal to investors, facilitating easier import and export operations.

Pathik Patwari, Chairman ICC Gujarat council, highlighted the success of Gujarat's cluster-based approach, citing the growth of the automobile industry following Tata Motors' significant investment.

He noted that this strategy has also attracted foreign companies in sectors such as semiconductors, logistics, and green energy.

Patwari further emphasised the state's advantages, including ready plug-and-play infrastructure in various industrial clusters.

He also pointed out the importance of Gujarat's peaceful industrial relations and the availability of labour, which have contributed to creating a stable and attractive environment for foreign investors.

The combination of these factors - policy support, infrastructure development, strategic industrial planning, and a favourable business climate - has enabled Gujarat to maintain its strong position in attracting foreign direct investment.

As Gujarat continues to evolve its investment landscape, the state's ability to maintain and potentially improve its position in India's FDI rankings will be closely watched by economists and industry observers alike.

(KNN Bureau)

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