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The state accounts for 13 per cent of the country's GDP and 22 per cent of
the Net Value Added (NVA) in the organised industrial sector. The key industries
in the state include chemicals, petrochemicals, oil & gas, engineering,
automobiles and textiles.
Source: Annual Survey of Industries 2002-03
Key industries
Chemicals, petrochemicals, oil & gasThe state has a strong presence in
the chemicals, petrochemicals and oil & gas sector. It contributes 27.4 per
cent of the country's chemicals, petrochemicals and oil & gas output. The
state also accounts for 18.2 per cent of the country's employment in the sector.
The chemicals sector in the country is expected to grow at 15 per cent per annum
till 2010 and thus, presents ample opportunities for the state. Opportunities
would primarily exist in the areas of polymers & plastics, fertilisers and
synthetic yarns.
The key competitive strength of the state in this industry is the upstream
and downstream linkages for raw materials and products. The availability of oil
& gas from Bombay High oil fields (offshore of Mumbai) has spurred the
large-scale development of chemicals and petrochemicals industry in the state.
Bombay High accounts for over 50 per cent of the country's oil & gas
production.
All major domestic and number of global chemicals & petrochemicals
players have a presence in the state. These include Hindustan Petroleum, Bharat
Petroleum, Reliance Industries, Indo-Rama Synthetics, Rohm & Haas and Dow
Corning.
In 2004, Indo-Rama Synthetics announced plans to expand the polyester
production capacity at its plant at Nagpur. The expansion will cost US$ 200
million and will double the polyester production capacity from 800 tonnes per
day to 1,600 tonnes per day. Reliance Industries is increasing the polyester
fibre and yarn production capacity at its Patalganga plant. Bharat Petroleum
Corporation proposes to invest US$ 2.7 billion at its Mumbai refinery to install
facilities for producing Euro IV compliant fuel.
PharmaceuticalsThe state accounts for 40 per cent of the country's pharmaceuticals output.
The US$ 5 billion Indian pharmaceutical industry in 2003 is expected to grow to
US$ 25 billion by 2010, representing an annual growth rate of over 25 per cent.
Post 2005 major opportunities have emerged in the pharmaceutical sector,
primarily in the areas of contract research, contract manufacturing and clinical
trials. The state's competitive strengths in the sector include low costs,
strong manufacturing base, well-developed laboratory and R&D infrastructure
and a strong resource pool. The backward linkage with the well-developed chemicals and petrochemicals sector is an added advantage. The
major players present in the state are GlaxoSmithkline, Johnson & Johnson,
Novartis, Nicholas Piramal, Cipla and Wockhardt.
Automobiles & Auto componentsThe state accounts for approximately 38 per cent of the country's output of automobiles by value.
Around 40 per cent of the workforce engaged in the automobile industry is employed in the state.
The major automobile centres in the state include Pune, Nashik, Aurangabad and Nagpur.
The key competitive strength of the state in the automobiles and auto
components industries is the presence of established manufacturers. The network
of component suppliers and vendors is a critical consideration in deciding the
location of any automobile unit. The strong presence of the engineering sector
is an additional advantage to the state, along with its large skilled labour
base. The good transport infrastructure in the state is also a positive factor
for the logistics-intensive auto industry.
Prominent automobile and auto component players present in the state are
Daimler Chrysler, Fiat, Skoda Auto, John Dierre, Tata Motors, Mahindra &
Mahindra, Bajaj Auto, Kinetic Engineering, Cummins and Bharat Forge. Fiat India
has recently set up a plant to manufacture passenger cars in Maharashtra. Tata
Motors plans to invest US$ 1.3 billion in the next five years to increase the
passenger car capacity at its Pune plant by 50 per cent. Skoda Auto had
initiated an investment plan of US$ 53 million for its Aurangabad plant in 2003.
Tyre manufacturer Michelin has decided to invest in the state for setting up its
production facility. The company intends to invest over US$ 130 million in two
phases in the state. JCB, the UK-based construction machinery major, is planning
to set up a US$ 130 million manufacturing unit near Pune.
EngineeringThe state's engineering sector contributes 23.1 per cent to the country's total engineering
output. The share in India's total employment in the sector is 20.3 per cent. The sector in the state
comprises machinery and equipments, both mechanical and electrical. Consumer durables,
comprising of consumer electronics and consumer appliances form an important segment of the
engineering sector.
The consumer goods market in India recorded double-digit growth rates in
2004. With low penetration levels for consumer goods in the country, the growth
momentum is likely to continue. For example, penetration levels of televisions
in India is 24 per cent as compared with 98 per cent in China, 1 1 per cent in
Brazil, 235 per cent in France, 250 per cent in Japan and 333 per cent in US.
The increasing income levels and the growing strength of the middle class is
expected to give a boost to the consumer durables and home appliances
industries. This will also provide a fillip to the engineering sector. Major
players present in the state are National Panasonic, Whirlpool, LG, Electrolux,
Bajaj Electricals, Videocon, Onida and Samsonite. Recently, LG Electronics has
decided to invest US$ 1 10 million for setting up a manufacturing unit at Pune.
The unit will cater to both domestic and export markets.
Financial servicesMumbai is the principal financial services centre of the country. The apex
financial institution, the Reserve Bank of India (RBI), is located at Mumbai.
The city houses the two largest stock exchanges, the Bombay Stock Exchange (BSE)
and the National Stock Exchange (NSE), controlling over 95 per cent of the
volume in the Indian equities market. Mumbai also has a major presence of
domestic and foreign banks operating in the country. Mumbai's status as the
principal financial centre has enabled Maharashtra to attract a large number of foreign banks and other financial institutions.
A recent spin-off from the strong presence of global financial services firms
in Mumbai is the establishment of their global research and back office base in
and around Mumbai. Morgan Stanley, HSBC and JP Morgan have set up such
operations in Mumbai.
IT/ITESThe state contributes 30 per cent of the country's software exports. It
houses 25 per cent of the top 500 Indian software companies. By 2008, Indian IT
software and services sector is projected to grow to US$ 77 billion,
employing 4 million individuals, accounting for 7 per cent of India's GDP and 30
per cent of the foreign exchange inflows.
Maharashtra possesses distinct competitive advantages that facilitate further
development of the IT/ITES sector in the state. These include:
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40 per cent of India's Internet users
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35 per cent of PC penetration in the country
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169,000 trained technical personnel added to the manpower pool each year
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Development of a large number of IT parks in both the public and private sector
Prominent IT players present in the state include Tata Consultancy Services,
Infosys Technologies, Wipro, Patni Computers, i-Flex Technologies, Veritas. BPO centres of large national
and international players have also come up in a big way in the state. These
include LG, HSBC, Aviva, vCustomer, Xansa, EDS and e-Gain, among others.
The Government has undertaken a number of initiatives to promote further
development of IT/ITES sector in the state. The steps include formulation of a
progressive sector-specific policy, development of IT parks and the knowledge
corridor.
Mumbai-Pune Knowledge Corridor:
Unique Features
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A six lane, dual carriage expressway between the two cities
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Optical-fibre cable link provided between the two cities
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Six major IT parks set-up in the two cities, three each in Mumbai and Pune, providing world-class
IT infrastructure
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Mumbai and Pune provide the best infrastructure in terms of housing,
education, transport and electricity
Infosys Technologies Ltd has taken 1 10 acres of land at the Pune Infotech
Park. Wipro has acquired 50 acres at the Rajiv Gandhi Infotech Park at Hinjawadi.
Patni Computer System is also setting up a 17,000-seat software development park
in Navi Mumbai. A number of BPO units are planning entry/expansion in the state including:
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Xansa is planning to double its headcount to 4000 by 2005. The company has Pune as one of its
three centres
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HSBC plans to double the Indian software staff to 1,000 in Pune
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Convergys is planning to set up a 1,000 seat centre in Pune
TextilesThe state contributes 10.4 per cent to the country's textile and apparels
output. Also, the state accounts for 10.2 per cent of the country's employment
in the sector. It produces nearly 272 million kg of cotton yarn or 12 per cent
of India's total production. It has an installed capacity of 1.66 million
spindles, equivalent to 17 per cent of the country's capacity.
The phasing out of the export quota is expected to provide a fillip to the
textile industry in the country. With the global trade in textile and clothing
expected to grow from US$ 356 billion at present to US$ 600 billion by 2010, the
state has an opportunity to leverage its existing strengths to capture a larger
share of the textile market.
The state's key competitive advantage in the textile industry is the abundant
availability of raw material (cotton) and large base of a skilled workforce. The
State Government is also taking steps to strengthen the textile industry in the
state by establishing textile parks at Nagpur, Dhule and Ambernath. The key
players in the state include Bombay Dyeing, Century Textiles and Raymond.
Raymond plans to expand its denim manufacturing capacity at Yavatmal from 20
million meters per annum to 30 million meters per annum at a total project cost
of US$ 28 million. Carrera Holding Inc proposes to set up a green-field textile
project in the country with an estimated investment of US$ 130 million at
Kolhapur. The company has identified two locations in India, one of which is the
SEZ near JNPT port near Mumbai.
Exports
Source: MIDC
During 1996 and 2002, exports from the state more than doubled from US$ 5.9
billion to US$ 14.9 billion. During the same period, the state's share in
India's exports increased from 25 per cent to 40 per cent.
Source: MIDC, 2002
Investment
Maharashtra is the leading state in India in respect to investment
attraction. The total investment in the state during 1991 and 2004 stood
at US$ 52.8 billion.
Source: Department of Industrial Policy and Promotion, Government of
India Manufacturing
It has attracted large investment in the chemicals, automobiles and
engineering sectors.
Source: Annual Survey of Industries 2000-01
In 2004, investment projects totalling over US$ 25 billion were in
various stages of implementation.
Source: Projects Today, Data as on July 31, 2004
The key sectors in manufacturing include automobiles, petroleum products,
synthetic textiles, chemicals, steel and electrical & electronic
equipments.
Foreign Direct Investment performanceDuring 1991 and 2004, the state approved over US$ 1 1.4 billion of foreign direct investment.
Source: MIDC
Based on the FDI approvals during 1991-2002 the key sectors attracting FDI
in the state can be identified as energy, transportation, services,
telecommunications and electrical equipment.
Source: Secretariat for Industrial Assistance Newsletter, Annual
Issue 2002
Potential hubs for investment
In addition to its present areas of strength, a number of sectors are
emerging with substantial potential for private investment. The most prominent
among these are leisure & tourism, biotechnology and food processing.
TourismThe Indian travel and tourism industry is expected to grow by 8.8 per cent
per annum (in real terms) to generate US$ 90.4 billion by 2014. The total
capital investment will increase from US$ 10.2 billion in 2004 to US$ 21.4
billion in 2014. In 2002, The state attracted 8.5 million domestic and 0.9
million foreign tourists.
The state has a large untapped tourism potential, with diverse offerings
including beaches, forts, hill stations, heritage and sanctuaries. The notable
attractions include Mahabaleshwar, Ajanta, Ellora, Elephanta and Murud-Janjira,
among others. Maharashtra's key advantage is the fact that Mumbai serves as
the entry point for 40 per cent of the international tourists arriving in
India. Mumbai's connectivity to key tourist destinations in the state and availability of
adequate tourist accommodation are other factors that favour development of
tourism in the state.
The state has come up with a progressive tourism policy to foster the
development of the sector. It has decided to develop a hill station near Pune
by 2010 with an investment of over US$ 400 million. In 2004, Maharashtra
Tourism Development Corporation (MTDC) introduced a special luxury train named
'Deccan Odyssey' with an investment of over US$ 8 million.
Leisure & EntertainmentWith one of the highest per capita incomes in the country, the state offers
excellent opportunities for development of leisure and entertainment avenues.
Mumbai and Pune are the key centres for the entertainment industry in the
country. Mumbai is the base for the world's largest film industry.
BiotechnologyWith a rich bio-diversity and a strong presence of the pharmaceuticals
sector, the state has a large potential in biotechnology. The Indian
biotechnology sector is poised for exponential growth with the consumption of
biotech products estimated to increase ten-fold.
The state has strong research capabilities and accounts for over 30 per
cent of country's patents. Presence of several specialised research
institutions in the state is a crucial advantage. It has a presence of reputed
companies focusing on the biotech sector including Wockhardt, Nicholas Piramal,
Cipla and Lupin, among others. In order to give a boost to the sector, the
state is setting up biotech parks, first of which is coming up at Hingewadi,
near Pune.
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