The Government of Rajasthan is conducting roadshows across the country to draw investment in its components manufacturing and ancillary ecosystem. Prateek Pardeshi draws the attention of tier suppliers and investors to the largest state of the country.
Rajasthan is the largest state and seventh-largest economy, in India! There are already more than 100 automotive and auto-component manufacturing plants in the state of Rajasthan. Deemed as a developed ecosystem for tier suppliers and ancillaries looking to expand their manufacturing footprint or geographical reach, those willing to turn to the Northern state can take confidence from the presence of auto majors like Hero Motors, Honda Cars, Honda Two-Wheelers, and Ashok Leyland. The State Government of Rajasthan nevertheless is taking this proposition to prospective investors from India and the world over. To make a strong case for investing in the state, through initiatives like the ‘Invest Rajasthan Roadshow’, Rajasthan’s Chief Minister, Ashok Gehlot is doling out incentives and drawing attention to the strategic and distinctive advantages that elevate the status of the state as a strategic investment haven.
For example, investors turning to the state can look forward to attractive financial incentives, access to India’s largest industrial land bank, unparalleled market access and an emerging industrial powerhouse. “Rajasthan is the manifestation of our commitment to building enduring partnerships with private enterprise for the development of the state and prosperity of our people. It is an important milestone towards delivering on the commitments made by us to investors,” read a statement from Gehlot. “I invite you to experience and benefit from the bouquet of exciting opportunities Rajasthan has to offer, and to join us in building a promising future for all of us,” a pre-recorded Audio Visual (AV) echoed at the road show’s leg.
Investors Connect
The Rajasthan Government had organised the ‘Investors Connect Programme’ a part of the Invest Rajasthan Roadshow, in SoBo. Held in collaboration with National Partner CII, to attract investments in the automotive sector among other key sectors in the State, this was well represented on the ground by the participation of representatives from across sectors like automotive manufacturing, MSMEs, Startups and Energy and Petroleum. Shakuntla Rawat, Minister of Industries, Government of Rajasthan in her keynote positioned Rajasthan as a haven to potential investors. “Rajasthan has abundant natural resource reserves. It offers adequate infrastructure including power supply, water resources, roads and other necessary infrastructure that connects it to neighbouring states,” she averred while also drawing the proximity to the country’s capital.
The Chief Minister assured investors of a reformist approach to maintaining law and order in the State. With this prelude of a state-level investors summit, the state, in Mumbai alone, successfully secured a Memorandum of Understanding (MoU) worth Rs.1,27,459 crore and Letters of Intents (LoIs) worth Rs.67,379 crore amounting to an over Rs.1,94,800 crore of total investment commitments. The State has attracted investments of over Rs.162.5 billion in two-wheeler, car, truck, bus-body building and off-road vehicle manufacturing from companies such as Honda, JCB, Ashok Leyland, Hero MotoCorp, etc. Rajasthan produces almost everything that goes into making an automobile. With investment commitments across the board and 40 proposed projects, it is estimated that approximately 1,44,000 new private-sector job opportunities will be directly created, further boosting the state’s economy.
Plug and play
For every manufacturing business to be successful with a quick turnaround time, a plug and play set-up in a state is preferred over having to build a ground-up ecosystem. It is crucial to realise Returns on Investment (RoI) quicker. In the case of Rajasthan, natural resource availability, a skilled pool of labour and a developed infrastructure look promising. With 3.42 lakh sq. km. land expanse, the Rajasthan State Industrial Development and Investment Corporation Ltd. (RIICO) account for an industrial area of ~ 48,399 acres which is claimed to be a developed industrial land parcel. Investors who want to build a facility from the ground up too, have abundant options to choose from a land bank of 20,000+ acres. Additionally, natural resource availability is abundant in the state, reiterated on multiple instances, which is an assurance for crucial raw material availability made available to the automotive sector including the auto-components sector as an important sub-segment.
Ashok Gehlot, Chief Minister, Rajasthan
Shakuntala Rawat,
Minister of Industries,
Government of Rajasthhan
Rajasthanis also boasts of 82+ universities and the state has gained National recognition for its skilling initiatives. Additionally, supply chain and transportation plays a vital role for those operating businesses out of the state. As far as supply chain and logistics are concerned, the state boasts eight inland container depots and one air cargo complex. The multi-modal connectivity is enhanced with Rajasthan as the second-largest National Highway (NH) network. About 60 per cent of the Delhi Mumbai Industrial Corridor (DMIC) influence zone at 38 per cent of Dedicated Freight Corridor (DFC) is known to pass from the state. The location is also a major advantage, in terms of around 40 per cent of the country’s market accessible from within the state.
Helping attain SDGs
Rajasthan is deemed as a state with the potential to help investors attain their Sustainable Development Goals (SDGs). For example, the State wants to lead in the Electric Vehicles (EVs) space. In a written reply in the Rajya Sabha, Union Minister for Road Transport and Highways, Nitin Gadkari shared information of total number of EVs in the country accounting 870,141, as of December 2021. EVs have gained attention from the State like its peers with 46,862 already plying on road. Rajasthan ranks in top five states, in EV adoption which hints at a scope of the EV component suppliers and ancillaries opting to set up base here. Admitting the initial high cost of acquisition being a big deterrent for consumers, the state, pitched the CM, can help lower costs of acquisition for customers through supply-side benefits it can provide. With batteries accounting for 40-50 per cent of the total cost of EVs, Rajasthan has well-stocked reserves of lead and zinc as crucial input materials for the manufacture of Lead-acid batteries. These could open the doors for manufacturers looking to lower the acquisition costs of e-bikes and e-rickshaws, for example, as a suitable import substitute. To boost the ecosystem and create a level playing field for charging solutions providers, the state, as per the Investor pitch, can offer leverage to companies looking at setting up a solar-powered charging ecosystem. Rajasthan, for the record, contributes the highest solar energy in the country with a current installed capacity of 2.2 GW.
K Nandakumar, Member of the CII National Council and Chairman and Managing Director of Chemtrols Industries Pvt. Ltd., drew from his 15-year relationship with the State of Rajasthan. The development of the first waste energy plant for the Jaipur Municipal Corporation ten years ago was a remarkable achievement, he shared. Chemtrols has automated three major petroleum terminals in Jaipur, Jodhpur, and Chittorgarh as a testimony to the scope of advancement. Arun Nanda, currently the Chairman of Mahindra Lifespace Developers and Mahindra Holidays & Resorts (I) Ltd., shared his 25-30 years of experience working with the State Government. He cited Mahindra Group’s presence in the state across four large segments including spare parts and logistics. Nanda also emphasised the state’s literacy rate is impressive. He stated one-third, or approximately 36 per cent, of the country’s accountants, are graduates from the state. While establishing the Mahindra spare parts facility, in a case study presented by Nanda, he used the palm to emphasise the tactical location of the state. All fingers represent the gateway to the country’s northern states, he quipped before hailing the state’s infrastructure. Be it the DMIC or proximity to ports crucial to logistics.
The success rate
With a focus on numbers and the Invest Rajasthan Roadshow around the world, Ashutosh Pednekar, Secretary Industries and Managing Director, RIICO, Government of Rajasthan, stated that a parallel show was taking place in Ahmedabad, Gujarat giving a glimpse of the push from the state. In Ahmedabad, MoUs worth 39,000 crore were signed. In the National capital, MoUs worth 79,000 crore are known to have been signed. MoUs worth Rs.45,000 crore is said to have been signed in Dubai. He also associated the number of investments with the Rajasthan Investment Promotion Scheme for 2019. Building on the 2019 draft of the policy, Rajasthan as a one-stop shop, offers investors access to 14 departments under one roof. A testimony to ensuring a seamless tendering process, digitalisation has paved the way for investors to submit their investment proposals.
In agreement with Ashutosh, Subodh further cited the MSME act. The investors in the state, it is claimed, require no permission under any state law, in effect. The act is known to be in place since May 2019. The Act also states that no inspector from any state government department may visit, check, or inspect investors setting up business in the state for three years. “You have three years of freedom. If the business is successful, take all of the permissions, if not, feel free to opt-out,” he claimed. Following this move, nearly 12 states are said to have turned to the Rajasthan model to adopt the mechanism in their respective states. Like any other state, there could be teething issues to address and improve the success rate with investors. The Government of Rajasthan claims to have the solution. It is ready to handhold investors who turn to it with an assurance that the state will not disappoint them. Regions like Barmer, Alwar, Chittorgarh, Bhilwara, Udaipur, Jodhpur, Jaipur, and Banswara are some of the promising investment hubs to consider. ACI
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