Key industries
West Bengal has a strong competitive position in petroleum and
petrochemicals, iron and steel, leather, textiles and agro-based industries.
Petroleum & petrochemicalsThe state accounts for 4 per cent of India's
total petroleum products production and 13 per cent of India's total polymer
production. The production of petroleum products in West Bengal has increased
from 2.9 million tonnes in 1993-94 to over 4 million tonnes in 2002-03.The
increase in polymer production has been even more significant, with production
exceeding 500,000 tonnes in 2002-03.
The main reason for the growth of petroleum and petrochemicals industry in
West Bengal is the upstream and downstream linkages developed by the oil
refining and petrochemical units located in the state.
The petrochemical industry in West Bengal shall get a further fillip with the
announcement of a US$ 1 billion gas pipeline project to bring natural gas to
West Bengal.
Prominent players in petroleum and petrochemicals industry are Mitsubishi
Chemicals Corporation, Indian Oil Corporation, Haldia Petrochemicals Ltd and
South Asian Petrochem Ltd. Among the major projects been planned in the state
are the Gas Authority of India's (GAIL) 100,000 MTPA Styrene Butadiene Rubber (SBR)
plant at Haldia.The plant is to be set up with an investment of US$ 120 million.
Iron and steelWest Bengal accounts for around 10 per cent of India's steel production capacity. Between 1995-96
and 2001-02, the production of steel through the integrated steel plants located in West Bengal grew from around 1.4 million
tonnes to around 1.9 million tonnes. With India's steel consumption projected to
double by 201 1-12 to over 60 million tonnes per annum, further expansion of
steel production is expected.
The state's key advantage is its proximity to key raw materials (iron ore and
coal). The Haldia port ensures availability of imported inputs for steel making
and export of steel products to China and south-east Asia.
Prominent steel producers in West Bengal are SAIL (India's largest steel
producer), Bhushan Steel and Stolhberg (of Germany). A total of 40 steel
projects worth US$ 620 million are in different stages of implementation in West
Bengal.
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Select steel projects under implementation |
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Company/Location
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Investment (US$ million)
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Shri Ramrupai Balaji/Durgapur
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39 |
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Hindustan Seals/Haldia
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70 |
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Mark Steel/Purulia
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44 |
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Shri MP Ispat and Power/Bankura
|
47 |
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Jindal India Ltd/Howrah
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54 |
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Govinda Impex/Bankura
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30 |
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Utkarsha Galva/Hooghly
|
22 |
Source: Report on West Bengal Economy, 2003
Agro-basedFood processing
West Bengal is the largest producer of vegetables in India and a major producer of fruits. In 2003, the
production of vegetables and fruits in West Bengal stood at 10.6 and 1.8 million tonnes respectively.
The state also accounts for around 10 per cent of the country's edible oil
production. This abundant
availability of vegetables and fruits provides the state a competitive edge in the food processing industry.
The State Government has taken steps to facilitate the development of the
food processing industry, which includes setting up "Food Parks" with
private investment. At present, six food parks are under implementation in
various parts of the state with an investment of over US$ 20 million.
To promote exports of processed vegetables and fruits, the state has set up
eight Agri-Export Zones (AEZs). Another AEZ for Darjeeling tea is planned. The
project will involve an investment of US$ 47 million. Of the total investment,
72 per cent will be developed through private sector participation.
The Government is establishing cold chain infrastructure in the state by
constructing 16 cold storages across the state. It is also setting up a
perishable food product cargo complex at Kolkata airport at a cost of US$ 5.6
million.
Prominent investors in West Bengal's food processing industry include Pepsico
(through Frito-Lay India). Del Monte Pacific Ltd is setting up a pineapple and
mango processing plant with an investment of US$ 1 1 million while companies
like Unilever and Nestle have expressed interest in setting up food processing
units in the state.
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Select food processing projects under implementation |
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Company / Location
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Investment (US$ million)
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MP Glychem Industries Ltd (Haldia)
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33
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Haldia Vegetable Oil and Foods (Haldia)
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29
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Hooghly Mills Project (Durgapur)
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13
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Kanchan Oil Industries
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10
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Tea
West Bengal is the second largest tea growing state in India after Assam and home to the world renowned
Darjeeling tea. The state contributes more than 20 per cent to India's total tea production. It has
343 tea gardens covering 103,950 hectares of planted area. West Bengal's tea
production has increased from 168 million kg in 1994 to 181 million kg in 2001,
an increase of 7.7 per cent
Prominent players in the tea industry in West Bengal are Tata Tea, Williamson
Magor Group, Goodricke Group and Duncans Group. The Williamson Magor Group has
recently invested US$ 20 million on its facilities to increase its packaged tea
business.
LeatherWest Bengal is India's second largest producer and exporter of leather and leather goods. Its share
in India's tanning capacity and production stands at around 22 per cent. India annually produces around
1,800 million sq ft of leather, representing 1 1 per cent of global production.
In 2002-03, exports of leather and leather products from India were over US$
1.9 billion. West Bengal had the largest share in these exports among the Indian
states.
Cheap raw material, abundant water supply, skilled labour and low cost of
operations are the important factors that make the state an attractive
destination for leather based industries. West Bengal has over 500 tanneries and
a large number of leather goods manufacturing units, most of which are small
enterprises.
Current investment in this sector is the world's largest integrated leather
complex being set up at the outskirts of Kolkata on a Build-Operate-Transfer (BOT)
basis. The project costing US$ 78 million is being set up in a joint venture
between the ML Dalmiya & Company and the West Bengal Government. The complex
is spread over an area of 440 hectares and is designed to house all activities
related with the leather industry. It will have a capacity to process 1,000
tonnes of rawhide per day. When fully functional, the park will generate
approximately US$ 1 1 1 million worth of exports and employment for 10,000
people.
Exports
Between 1998 and 2001, exports from West Bengal increased from US$ 1,840
million to over US$ 2,800 million.
Source: Commerce and Industries Department, Government of West Bengal
Exports from the state mainly comprises of manufactured goods, engineering
goods, textiles and agricultural products and leather products.
Source: Commerce and Industries Department, Government of West Bengal
Investment
Between 1991 and 2002, 658 industrial units with an aggregate investment of
US$ 5 billion were set up in West Bengal. By 2003, this number increased to 795
with the total realised investment of over US$ 5.4 billion.
West Bengal has attracted industrial investment in sectors such as steel and
coke, agro-based industries, leather, textiles and chemicals. The steel and coke
sector represents approximately half the industrial investment in West Bengal.
Source: Annual Survey of Industries, 2002-03
In 2003, there were 55 projects with a total investment of over US$ 840
million at various stages of implementation in West Bengal. A sector-wise
breakdown of these projects indicates a wide distribution of investment across
oil, petrochemicals and iron & steel.
Source: Report on Economy, 2003
Foreign Direct InvestmentBetween 1996 and 2003,West Bengal attracted over US$ 1,346 million of Foreign Direct Investment
(FDI).
Source: Secretariat for Industrial Assistance reports
The key sectors attracting FDI in the state are fuel, chemicals other than
fertilisers, electrical equipment including software, hotels & tourism, and
telecommunications.
Source: Secretariat for Industrial Assistance newsletter, Annual Issue
2002
Potential hubs for investment
As India's third largest economy, West Bengal offers significant potential for
future development. The state's emphasis in the past has been on rural
development, to promote equitable economic and social development. Of late, the
state has recognised the need for rapid economic development and has taken a
number of steps to aggressively promote development of industries and services.
The State Government has identified few key areas for future growth.
IT and IT Enabled ServicesWest Bengal is among the fastest growing states in the IT sector. Currently, over 180 IT/ITES companies
are operating in the state and these employ more than 15,000 IT professionals. Software exports from West
Bengal have grown to US$ 370 million in 2003-04, as against US$ 260 million in 2002-03.
By 2010, the projected contribution of IT and ITES sector to the state's economy is expected to be 15-20 per cent, compared to
the current 3 per cent.
The state offers a large talent pool, low cost of operations, uninterrupted
power supply and healthy infrastructure. It has taken steps to provide a
favourable policy and regulatory framework for development of the IT and ITES
sector.
Prominent IT and ITES companies present in West Bengal include IBM, Wipro,
Cognizant Technologies and Siemens Information Systems.
In October 2004, two Software Technology Parks (STPs) became operational in
Durgapur and Kharagpur. Preliminary work to set up two more STPs in Haldia and
Siliguri is underway.The DLF Group is also setting up a 1.3 million sq feet IT
Park with an investment of over US$ 60 million.
TourismThe foreign and domestic inflow of tourists to West Bengal has been increasing over the past few
years. The state attracted 8.8 million domestic tourists and 530,000 foreign tourists in 2002.
West Bengal's share in domestic and international tourists stands at 2.9 per cent and 11 per cent
respectively. The number of foreign tourists visiting West Bengal increased from 193,000 in 1997
to 530,000 in 2002, representing a growth of over 175 per cent.
West Bengal with its heritage and geographical diversity offers significant
potential for the tourism industry. The state's Tourism policy offers incentives
to construct and operate new hotels in the state.
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