The best Indian states to invest in

The best Indian states to invest in
The best Indian states to invest in

Intense competition to rank higher on India's internal Ease of Doing Business index has led to huge improvement in the business climate in all 28 states and nine Union Territories in India but the top five positions have largely been occupied by five states - Gujarat, Maharashtra, Karnataka, Andhra Pradesh and Tamil Nadu - though not always in that order. Here's a look at what keeps them ahead of the pack.

Highlights:

  • Gujarat, Maharashtra, Andhra Pradesh, Karnataka and Tamil Nadu have consistently ranked the highest on the internal index.

  • Gujarat has consistently clocked a faster state GDP growth rate than India as a whole.

  • Maharashtra′s location, industry-friendly culture and the presence of a large educated workforce have made it India's largest state economy.

  • Karnataka besides being an IT hub is also a major centre for automobile, aerospace, pharmaceuticals production, and is a major global start-up hub.

  • Andhra Pradesh offers major opportunities for investments in the IT sector as well as in mining, fintech, infrastructure, energy.

  • Tamil Nadu is India's most urban state and ranks second among Indian states in GDP.

India has made remarkable progress in the World Bank's Ease of Doing Business (EODB) rankings, jumping an unprecedented 65 positions from 142nd in 2014, when the Narendra Modi government came to power, to 77th during the first year of its second successive term in office. Though the EODB index uses only Mumbai and New Delhi as proxies for the entire country, an internal real-time EODB index devised by the World Bank and the Government of India ranks all Indian states on the same parameters as the global rankings. This has led to quantum leaps on various parameters across several states.

The five states that have consistently ranked the highest on the internal index are Gujarat, Maharashtra, Andhra Pradesh, Karnataka and Tamil Nadu, though some states such as Haryana and Delhi have occasionally outranked them on some individual parameters.

Gujarat

Gujarat has consistently clocked a faster state GDP growth rate than India as a whole. Its main advantages are its strategic location on India's west coast, which gives it easy access to the trade routes to the Middle East, Europe, North America and Africa. Its major ports, such as Mundra, XXX and XXX are the closest to the industrial hinterland of North India. The state has also been fortunate to have a long line of proactive, business-friendly governments, such as the one headed by Narendra Modi between 2002 and 2014.

Gujarat is rich in mineral reserves and has a vibrant mining sector. It is also a major hub for the production of automobiles, petrochemicals, pharmaceuticals, chemicals and several other important industries. It offers major investment opportunities in the above sectors as well as in engineering, diamonds and jewellery, textiles, shipbuilding, infrastructure - roads, ports, energy, architecture & design services, green buildings - renewable energy, bioenergy, water treatment and water technologies and agriculture, horticulture, dairy farming and food processing and logistics, among others.

Maharashtra

Home to India's financial capital Mumbai, Maharashtra is the largest state economy in India and hosts every conceivable industry - from petroleum to cement to aerospace, international trade, fashion, steel and several others. Mumbai, the home of Bollywood, is also the Indian headquarters of several Indians and global banks, financial institutions and legacy and new-age companies. India's central bank, the Reserve Bank of India (RBI), has its headquarters in the city and its two stock exchanges, National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), are the largest in the country. Mumbai is also a major international port; this facilitates international trade both with East Asia as well as the Middle East, Europe, North America and Africa.

The state's main advantages are its location on the west coast of India, its industry-friendly culture and the presence of a large educated and trained pool of manpower for both the industrial as well the service sectors.

Karnataka

Karnataka is famous for its an information technology (IT) industry, which is present mainly in and around Bangalore, its capital city. Home to over 3,500 IT companies, about half of India's biotech companies, a host of e-commerce start-ups, as well as legacy industries, the state is recognised the world over as a major innovation hub. Every global technology company worth its name, from Intel to Google to Amazon to Oracle to Bosch have a major presence here and use these facilities to develop cutting edge technologies for the global market.

This southern India state is also a major centre for automobile, electronics, aerospace, mining, machine tools and pharmaceuticals production, and is a major global start-up hub. Its main advantages are its excellent connectivity to major domestic and international markets, its world-class fibre optic network throughout the state, the presence of notable global tech giants, a series of business-friendly state governments and a large pool of trained industry-ready manpower.

Andhra Pradesh

Another southern Indian state, Andhra Pradesh had pipped favourites Gujarat and Maharashtra to the top position in India's EODB in 2018. Like Gujarat and Maharashtra, it has been fortunate to have a long line of proactive, business-friendly governments. The state's single-window clearance system is considered a model for other states.

Its main advantages are its strategic location on India's east coast, making it a gateway for markets such as ASEAN, China, Japan, South Korea and the eastern coast of Russia. Andhra Pradesh offers major opportunities for investments in the IT sector as well as in mining, fintech, infrastructure, energy - including renewable energy - and transport and logistics.

Tamil Nadu

India's southern-most state, Tamil Nadu, is bound on three sides by the Bay of Bengal, the Indian Ocean and the Arabian Sea, making it an important gateway to Southeast and East Asia, thus, offering excellent connectivity with both East and West.

It is India's most urban state and ranks second among Indian states in GDP. Its other great advantage is its large pool of trained manpower. Often called the “Detroit of India”, its capital city Chennai is a major automobile hub and produces a range of passenger and commercial vehicles for domestic and international markets.

Besides the auto sector, the state offers massive investment opportunities in healthcare, education, IT services, mining, agriculture, food processing, paper, chemicals, fertilisers, steel and renewable energy.

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