Vibrant Gujarat - Services Sector Profile

Services Sector Profile
Financial Services, Tourism and IT/ ITeS
SECTOR PROFILE

Table of Contents
1. India - preferred investment destination
2. Gujarat - preferred investment destination in India
3. Services in Gujarat - overview and focus sub sectors
4. Services focus sub-sectors
4.1 Financial Services
4.1.1 Overview
4.1.2 Gujarat scenario
4.1.3 Investment opportunities
4.2 Tourism
4.2.1 Overview
4.2.2 Policy initiatives and interventions planned
4.3 Information Technology (IT)/Information Technology enabled Services (ITeS)
4.3.1 Overview
4.3.3 Policy initiatives and interventions planned
5. Advantage Gujarat
6. Doing Business in Gujarat
7. Key Government Agencies

INDIA - PREFERRED INVESTMENT DESTINATION
01
1

INDIA - PREFERRED INVESTMENT DESTINATION
9th largest economy in the
world by nominal GDP and
3rd largest by purchasing
power parity (PPP)
Recorded the highest growth
rates in the mid-2000s
One of the fastest growing
economies in the world (GDP
growth rate – 8.6% in 2011)
GDP growth rate
15.0%
10.0%
5.0%
Sectors’ contribution to GDP
CAGR
Exports
14%
CAGR
Imports
14%
India is one of the
major G-20 economies:
400
350
300
250
200
150
100
50
th the 17 largest exporter and
th 11 largest importer in the world
Main Export Partners
1.73
1.6
1.52
Automobile
industry
Construction
activities
nd The 2 preferred global
investment destination
China
India
Brazil
US
10%
Growth
Decline
No Change
(World Investment Prospects Survey
2010-2012 by UNCTAD)
USD 254 billion of FDI inflows
between April 2000 and
March 2012
US
13%
UAE
12%
China
8%
Hong Kong
4%
Main Import Partners
China
12%
UAE
7%
Saudi Arabia
6%
US
6%
Australia
5%
FDI Confidence Index, 2012
A.T. Kearney Survey
FDI - Top Sectors
9.5% 9.6% 9.3%
6.8% 8.0% 8.6%
0.0%
2006 2007 2008 2009 2010 2011
1.52
1.87
0 0.5 1 1.5 2
Germany
Services
30%
Telecommunications
12%
Computer software
and hardware
11%
Real estate
11%
Power
7%
6%
Metallurgical
industries
5%
Pharmaceuticals
5%
Petroleum
and natural
gas
3%
- 200 400 600 800 1,000 1,200
Agriculture Industry Services
USD, billion
16%
17%
17%
18%
19%
20%
25%
26%
26%
26%
25%
26%
59%
58%
57%
56%
56%
2011-12
(A)
2010-11
(Q)
2009-10
2008-09
2007-08
2006-07 54%
Trade Scenario, USD billion
0
1990-91 1994-95 2000-01 2004-05 2010-11
Export Import
02

World's largest
democracy with
1.2 billion people
Land of abundant
natural resources
democr natur
and div
diverse
climatic conditions
Enabling business
environment
greater global
participation
Strong Mark
Fundamen
Market
Fundamentals
Access to
result of the
IT revolution
Impetus on
Infrastruc
De
Infrastructure
Development
Progressive
simplification and
rationalization of
direct and indirect
tax structures
Competitively
priced skilled
labour
pric
en
with gr
technology as
a r
simplific
rationaliza
ADVANTAGE INDIA
03

04
GUJARAT - PREFERRED INVESTMENT DESTINATION IN INDIA
2

GUJARAT HAS BEEN RANKED 1ST AS PER THE “ECONOMIC FREEDOM RANKINGS
05
FOR THE STATES OF INDIA, 2012” REPORT
Double digit growth rate with Gross State
Domestic Product of USD 75 billion
(2010-11) growing at a five year average of 10%
Growth in agricultural output in
the state over the last 10 years 11%
A highly industrialized state - Gross State
Domestic Product contribution from
manufacturing sector 28%
Gujarat’s Degree of Openness
(ratio of exports from state to
Gross State Domestic Product) 53%
A state with a population of 60 million and
one of the highest urbanization levels 43%
Increase in seat availability in
technical institutions over last 3 years 100%
A state with a high and
growing literacy rate 79%
26% A state with one of the highest share in
investments under implemented projects
in India

SERVICES - OVERVIEW AND FOCUS SUB SECTORS
3
06

SERVICES SECTOR : BIGGEST CONTRIBUTOR TO INDIA’S GDP
07
GDP by Economic Activity(at 2004-05 Constant prices) in %
110%
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Source: Ministry of Finance, Central Statistical Organization
Services Sector - contributed
58% to GDP in year 2010-11
Community, Social and
Personal services
Financing, Insurance, Real Estate
and Business services
Trade, Hotels and Transport
communication
Construction
Electricity, Gas and Water Supply
Manufacturing
Mining and quarrying
Agriculture and fishing

SERVICES FOCUS SUB-SECTORS
08
IT / ITES
Tourism
Financial
Services 4

FINANCIAL SERVICES – INDUSTRY STRUCTURE
11
Financial services industry mainly comprises BFSI (Banking, Financial Services
(including mutual funds) and Insurance
Estimates of the Industry
are taken at constant
prices (2004-05)
Services Sector in
India
Financial
Services
Industry
Banking Insurance Mutual
Funds
Tourism,
Hotel,
Trade
Non-Banking
Financial
Companies
(NBFC)
IT/ITeS
Real
Estate
Business
Services
Health,
education,
social
services
Infrast-ructure
Legal
Accoun-ting,
auditing
R&D
Tele
communi-cation
Contributes
around 5% of
India’s GDP
Source: Reserve bank of India, Central Statistical organization, PwC Analysis

DEMAND FOR FINANCIAL SERVICES IN INDIA
Significant potential :
• Rising incomes are driving demand for
financial services across income brackets
• The size of Indian gross national savings
stood at USD 539 billion in 2010 and is
estimated to be USD 1,455 billion by 2016.
• Over 90% household savings are invested in
bank deposits and only 10 per cent in other
financial asset classes.
• Innovative and customized products are
expected to shift money from bank deposits
to these emerging asset classes
• The large quantum of savings by Indians
presents immense opportunities for
financial intermediaries to move savings
to more productive channels
(Apr. 2000 - Dec. 2010) in USD million
Source: Ministry of Finance ,IBEF , Department of Industrial Promotion
12
Cumulative FDI Inflows
“Given India's continued economic growth, the financial sector will
provide 10 to 11 million jobs by 2020 “
– ”GIFT Corporate Presentation “
Construction Activities
(including roads and
Highways)
Housing and Real
Estates
Telecommunication
Computer Software &
Hardware
Services Sector
(Financial and Non
financial)
8964
9380
10258
10601
26454

FINANCIAL SERVICES: STRUCTURE OF INDIAN BANKING SECTOR
13
Scheduled commercial banks
Public sector banks(27)
Source: Reserve bank of India
Reserve Bank of India
Banks
Financial Institutions
Private Sector Banks(27)
Foreign banks(32)
Regional rural banks (84)
Urban Cooperative
banks(1674)
Rural cooperative credit
Institutions(96,751)
Cooperative credit
Institutions
All-institutions
India financial
State -level Institutions
Other Institutions

FINANCIAL SERVICES: BANKING
INDIAN BANKING SECTOR HAS GROWN AT A HEALTHY AND STEADY PACE
Credit
Growth:
• Credit off-take has surged at a
CAGR of about 20% in the same
period
• Demand has grown for both
corporate and retail loans
Growth drivers: Loan growth has
been driven by strong economic
growth, rising consumerism and
income levels
1400
1200
1000
800
600
400
200
Growth in deposits over past few years
14
Growth in credit off take over past few years
433
532
CAGR 20%
635
743
906
1000
900
800
700
600
500
400
300
200
100
0
2007 2008 2008 2010 2011
In USD billion
578
718
875
1,023
1,206
0
2007 2008 2008 2010 2011
In USD billion
Deposits
• Growth: Over 18% CAGR during
FY06-11
• Growth drivers: Deposit growth
has been driven by strong
growth in savings amid rising
disposable income levels
Gross National Savings expected
to touch USD 1,455 billion in 2016
CAGR 18%

FINANCIAL SERVICES : BANKING
15
of scheduled commercial banks – 2010 ( in INR lakh crore)
7.74
Bank group-wise distribution of outstanding credit
17.38
40
35
30
25
20
15
10
5
9.13%
16.71%
7.27%
1.65 0.83
5.86
33.45
0
State Bank of
India & its
Associates
Nationalised
Banks
Foreign Banks Regional rural
banks
Private Sector
Banks
All Scheduled
Commercial
banks
Share of Banks in outstanding credit:
• Scheduled Commercial banks: 50%
• Nationalized bank : 26%
• SBI and its associates : 11.5%
• Private Sector : 8.76%
• Foreign banks : 2.4%
• Rural banks : 1.2%
11.67%
40.51%
2.56%
9.13%
3.02%
Agriculture
Industry
Transport Operators
Professional and Other Services
Personal Loan
Trade
Finance
All others
Indian commercial banks have
increasing exposure to industry sector
especially power sector.
Industry wise credit given by banks -2010

FINANCIAL SERVICES IN INDIA: STRUCTURE OF INDIAN INSURANCE INDUSTRY
Source: Reserve bank of India, IBEF
16
Ministry of
Finance
(Government of
India)
Insurance
Regulatory and
Development
Authority
(IRDA)
Life Insurance
(24 players)
Public (1)
Private (23)
Non Life
Insurance (24
players)
Public (6)
Private (18)
Re-
(1 player)
insurance
Public (1)
Registered insurers in India
(As on 30th September 2011)

FINANCIAL SERVICES IN INDIA: INSURANCE
17
4
4
3
3
2
2
1
1
0
Total Premium income of Life and Non
Life Insurers (in INR Lakh Crore)
CAGR : 21%
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Source: IRDA
Non-Life Life
0.6 0.7
0.8 1
1.2
1.8
2.3
2.5
3.0
3.3
Life Insurance
LIC
70%
Private
sector
30%
Non-Life Insurance
Public
59%
Private
41%
• Insurance industry CAGR of 21% from 2001 to 2010.
• Life insurance industry recorded a premium income of INR 2.9 lakh crore during 2010-11.
• Non-life insurance industry underwrote total premium of INR 0.4 lakh crore in 2010-11

FINANCIAL SERVICES IN INDIA: MUTUAL FUNDS
Source: IBEF
18
• Asset management industry in
India is among the fastest-growing
in the world
• Total Assets –Under-Management
(AUM) have clocked a CAGR of
28% over the period 2005 to 2010
• The global recession in 2008 led to
a dip in the total AUM. However,
the industry rebounded to 30 per
cent higher AUM than pre-recession
levels in a period of two
years from 2008 to 2010
• Corporate investors account for
nearly half of the total AUM in
India, while retail investors
account for one-fourth
• AUM in India is expected to
increase by 57% during 2010-14
42
Mutual Fund AUMs (2005-2010)
68
114
85
138
46
62%
68%
-25%
62%
-67%
80%
60%
40%
20%
0%
-20%
-40%
-60%
-80%
160
140
120
100
80
60
40
20
0
2005 2006 2007 2008 2009 2010
Investor break up, March 2010
Corporates
USD billion
Growth rate
19%
3% 1%
Retail
HNI's
Bank/Fis
FII's
51%
26%

FINANCIAL SERVICES IN INDIA: NBFCS
19
Entity Main business
1. Asset finance companies Financing of real / physical assets
2. Investment companies Acquisition of securities including primary dealers which deal in
3. Loan companies Providing loans, advances for any activity other than its own,
Source: IRDA
Non Banking Financial Companies (NBFC) in India
underwriting and market making for government securities.
excludes EL/HP/Housing Finance Companies
NBFCs are rapidly gaining prominence as intermediaries in the retail finance space
Growth so far:
• More than 80% of equipment leasing and hire purchase activity in India is financed by NBFCs
• The AUM of NBFCs in retail finance has doubled over the period 2007-10
• In terms of market share in retail finance (except housing finance) space, NBFCs have been able to improve their
market share from 26% to 38% over 2007-10
Future outlook:
• Going forward the AUM is expected to double again over the period 2010-13
• By 2013, the NBFC share of retail finance (except housing finance) is expected to rise to 47%, almost at par with
the market share of banks

FINANCIAL SERVICES IN INDIA: NOTABLE TRENDS
Source: IBEF
20
• New distribution channels like bancassurance, online distribution
and NBFCs have widened the reach and reduced the operational
costs
• The life insurance sector has witnessed the launch of innovative
products such as Unit Linked Insurance Plans (ULIPs)
Insurance
• India’s AUM has grown at 28% CAGR over 2005-2010, and the total
AUM stood at USD 146 billion as of March 31, 2011.
• The AUM of equity and balanced funds, focus segments of retail
investors, grew by 20 per cent CAGR in the same period
• In FY09, SEBI has removed entry load to bring about more
transparency in commissions – thus encouraging longer-term
investment
• NBFCs has been serving unbanked customers by pioneering
retail asset backed lending, lending against securities and
microfinance
• NBFCs are aspiring to emerge as a one-stop shop for all financial
services
Mutual Funds
NBFCs

TERTIARY/SERVICES SECTOR IS THE BIGGEST CONTRIBUTOR
TO GUJARAT ECONOMIC BASKET
GDP of Gujarat by Economic activity( at 2004-05 constant prices) in %
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Source: Socio Economic review of Gujarat 2010-2011
22
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Tertiary Sector - contributed
43% to GSDP in the
year 2010 -11
Public adminstration and other services
Banking and Insurance , real estate and
Business services
Trade, Hotels and Transport
communication
Manufacturing
Electricity,gas and water
supply, construction
Agriculture, Forestry and
logging, Mining and Quarrying

FINANCIAL SERVICES IN GUJARAT
23
The Banking industry of Gujarat has been growing at a very rapid pace
Gujarat witnessing good growth both in advances and deposits in the year 2010-2011.
Branches of scheduled commercial
6091
6433
6500
6400
6300
6200
6100
6000
5900
banks(in Nos)
2009-10 2010-11
Sector Advances have grown across sectors
Section
Source: Socio Economic review of Gujarat 2010-2011
Aggregate Deposits and Advances (in INR
2.3
Lakh Crore)
2.7
1.6
1.9
3
2.5
2
1.5
1
0.5
0
2009-10 2010-11
Deposits
Advances
61.471
24,955
19,859
9,826
71,975
31.401
24,825
11,605
in the recent years
2010
2011
• The ratio of priority sector advances to net
banking credit stood at 46% - well above
the benchmark level of 40%
• Ratio of agricultural advances to net
banking credit was also above the
benchmark level of 18% which stood at 20%
In Crore
Priority Sector
Advances
Agricultural
Advances
SSI Advances Weaker
Advances

GIFT- GUJARAT INTERNATIONAL FINANCE TECH CITY -THE CONCEPT
AND POSITIONING
Source: GIFT, Government of Gujarat
24
Project Brief and background
GIFT is conceptualized as the first Financial
Services Special Economic Zone to be developed
as a global financial hub. With its strategic
location, state of the art infrastructure, green and
intelligent buildings it is poised to become a
globally benchmarked International Finance
Centre providing exciting opportunities for
financial services and IT/ITeS sectoral companies.
Project Details
• GIFTCL – Gujarat International Finance Tec-City
Company Ltd has been incorporated in
partnership with IL&FS (Premiere institution
with proven track record and pioneer in
launching PPP projects)
• Government of Gujarat through GUDC to be
the lead agency
GIFT aspires to catalyse India’s
large financial services potential by
offering world class infrastructure
and world class talent
To target 6-8% of
financial services
potential in India
Creation of
1 million direct
and Indirect Jobs
Up to
90 million sq.ft
of real estate office
and residential
space

INVESTMENT OPPORTUNITIES
4.1.3
25

Source: GIFT, Government of Gujarat
26
Financial Service
operations
Financial Services
corporate centre
Select product
markets
Capital markets and
trading
IT Services
ITes/BPO Services
Core
Financial
Services
GIFT’s target business segments
• National Financial Services
Operation hub
• Regional/Functional head quarters for
financial service players
• National headquarters for players
• Private banking hub for NRIs/Regional
HNWs
• International Microfinance hub
• International commodity trade hub
• Participation in global capital markets
• Global hub for IT services for financial
services sector
• Global hub for BPO services for financial
services sector
Investment
opportunities
• Upto 90 million Sq. ft of
real estate office and
residential space
• Opportunities for
development of
residential spaces
• Opportunities for
development of several
urban amenities like
hotels, convention
centre, leisure
destinations like
restaurants, golf
clubs etc

TOURISM
Travel & Tourism industry holds a significant position in the global context on account of its contribution
to revenue, employment and investments
29
Revenue
Total industry revenue:
- USD 6 trillion ~ 9% of global
GDP, - will be over USD 14 trillion
by 2019. USD 1 Trillion
of overall export income
(USD 3 billion per day).
Workforce
Over 260 million people
(directly and indirectly
employed) - 7% of total
employment worldwide
- 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000
2019
2009
Personal Travel & Tourism
Business Travel
Government Expenditures
Capital Investment
Visitor Exports
Other Exports
1000
900
800
700
600
500
400
300
200
100
0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
International Tourist Arrivals (million)
International Tourist Receipts (US $ Billion)
Travel and Tourism Industry has
rebounded after recession with
strong increase in tourist arrivals
• Strong rebound in global tourism
trends in 2010 with international
tourist arrivals grown by 6.6%
• 4.7% growth in international tourism
receipts Increase from about
USD 85 billion to USD 919 billion
in 2010
Sources: World Travel and Tourism Council, Annual Review, 2011
World Tourism Organization, International Tourism Trends 2011
Capital investment
USD 650 billion investment ,
approximately - 4.5% of the
total capital investment
worldwide

GLOBAL TOURISM OVERVIEW
Leisure and recreation are the most
popular purpose of travel
7% 51%
10.00%
9.00%
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
Average Annual Growth rate from 2000-2010
Sources: World Tourism Organization, International Tourism Trends 2011 edition
30
Asia and Pacific regions have emerged
as key drivers of Travel and Tourism
Industry growth
Break up by purpose of travel
15%
27%
0.00%
World Europe Asia and
Pacific
Americas Africa
Middle East
World Europe Asia and Pacific
Americas Africa Middle East
Leisure , Recreation and Holiday
VFR, Health, Religion, Other
Not Specified
Business and Professional
Present contribution of different regions to
total Travel & Tourism industry revenue
1.90%
North East Asia
South East Asia
Oceania
South Asia
6.70%
6.80%
6.20%

INDIA-TOURISM SECTOR OVERVIEW
Travel and Tourism
sector’s contribution
2011 2021 (estimated)
Total employment 7.5% 8.1%
Total exports 3.8% 11.4%
Total investment 4.7% 8.7%
Employment generated by Travel and Tourism Total Tourist Arrivals in India and Globally
20.0%
15.0%
10.0%
5.0%
0.0%
- 5.0%
31
Travel and Tourism Industry in India has grown, in terms of tourist arrivals, contribution to
country’s GDP and employment generated
Total contribution of Travel and Tourism Industry to GDP is expected to grow by 9% from current INR 3,680 billion
(4.5% of GDP) in 2011 to INR 8,523 billion (4.9% of GDP) by 2021
Revenues generated by Travel and Tourism (INR billion)
India Travel and Tourism: Key facts
-10.0%
800
700
600
500
400
300
200
100
0
2005 2006 2007 2008 2009 2010
Total Tourist Arrivals in India (mn) YoY India Growth
YoY World Growth
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2020
2011
2021
Direct Indirect Induced
50000
45000
40000
35000
25000
20000
15000
10000
5000
0
2011 2021
Direct Indirect Induced
Sources: World Travel and Tourism Council, T&T
Economic Impact, India 2011
Sources: Indian Tourism Statistics, Ministry of
Tourism , Government of India

INDIA TOURISM SECTOR OVERVIEW
Sources: World Travel and Tourism Council, T&T E
conomic Impact, India 2011
32
Foreign tourists arrivals and contribution to
earnings has been increasing significantly
• Tourism in India is mostly domestic in nature with
foreign tourists comprising less than 1% of total
tourists (6.3 million in 2011 and 5.8 million in 2010
compared to 740 million total tourists in 2010.
• While total tourists witnessed a 8.7% CAGR in India
during 2005-10, foreign tourist arrivals grew 8.2%
in the same period
• Foreign Exchange Earnings (FEE) from tourism in
India reached almost INR 776 billion in 2011 –
nearly five times of that in 2000 (INR 156 billion)
• While total foreign tourist arrivals to India grew at
about 8.2% between 2005-10, FEE grew at a higher
rate of about 17% in the same period – indicating
that the average spending per foreign tourist has
been increasing year on year
The nature of travel spending is skewed
towards Leisure spending which
contributed INR 3,003 billion in 2011 and
is expected to more than double by 2021
India Foreign Tourist Arrivals and Growth Rate
12.5%
10.0%
7.5%
5.0%
2.5%
0.0%
-2.5%
-5.0%
7
6
5
4
3
2
1
0
2005 2006 2007 2008 2009 2010 2011
Foreign Tourist Arrivals (mn) YoY Growth Rate
28.50%
71.50%
Contribution
to T&T GDP
Business vs Leisure
Business Spending Leisure Spending
Sources: Indian Tourism Statistics, Ministry of
Tourism , Government of India

INDIA-TOURISM SECTOR OVERVIEW
33
Hotel Industry in India is an undersupplied market and witnessing strong growth
• India currently has approximately 6 lakh hotel rooms only. As of 2008, the number of approved hotels by
ministry of tourism, government of India stood at 1,593.
• After the impact of global recession, 2010 witnessed overall growth in occupancies from 59% to over 62% and
average hotel rates increased by 10% led by increase in international leisure demand, strong growth in
domestic leisure demand and growth emanating from Meetings, Incentives , Conventions and Events market
(MICE). F&B has been steady in terms of contribution to revenue which is led by room rentals
70%
68%
66%
64%
62%
60%
58%
56%
Sources of Revenue Average Room Rates and Occupancy
5000
4500
4000
3500
3000
2500
2000
1500
1000
500
0
2006-07 2007-08 2008-09 2009-10 2010-11
Presence of global and national brands
2010-11
2009-10
2008-09
2007-08
2006-07
0.00% 20.00% 40.00% 60.00% 80.00% 100.00%
Rooms F&B and Banquets Others

HOTEL INDUSTRY: FUTURE OUTLOOK
Hotel Industry is being driven by growth of the travel and tourism industry, domestic tourism and a demand for
budget hotels. Over 100,000 new hotel rooms are estimated to enter Indian market by 2015. Around 60% of these are
estimated to be under active development.
34
Intercontinental
Hotels Group
Starwood
Hotels & Resorts Hilton Hotels
Intercontinental Hotels Group, the
world’s largest hotel group by
number of rooms plans to launch
19 holiday express hotels in India
by 2016. IHG currently runs 7 out of
the 12 hotels in India in the luxury
segment.
Starwood hotels and resorts
worldwide which owns brands
like Le Meridien and Sheraton
intends to set up 100 hotels in
India by 2015. It currently has 32
hotels but its focus might now be
on the mid market segment.
Hilton Worldwide plans to develop
around 50 more hotels in India.
The 19 hotels over the next 4-5
years will have approximately
3000 rooms covering luxury, full
and focussed service offerings
with brands like Doubletree, &
Hilton Garden Inn
Marriott International
Marriott International plans to open
around a 100 properties in India by 2015,
which will increase its presence by a
whopping 1000% in the country bringing
brands like Ritz Carlton , Fairfield and
others
Accor Hotels
Accor, another international hotel chain
with nine hotels in India under brands like
Mercure, Ibis and Novotel plans to raise the
number to 90 by 2015 . It also has set up an
investment fund to further its programme
Factors driving the hotel industry in India
• Supportive policies and initiatives: 100% FDI allowed in the hotel industry, Dedicated Hospitality
Development and Promotion Board (HDPB) for fast approvals & clearances to hotel projects
• Increase in business traffic due to rising GDP and India’s emergence as an outsourcing hub
• Strong domestic demand due to rise of middle class and change in cultural attitude of citizens
Source: Secondary Research

35
Brand India: Getting Global Recognition
World’s Leading Destination & World’s Leading Tourist Board
• World Travel Mart 2011 Awards for India Tourism
Leading Tourism Destination Award to India
• at the Asia World Travel Awards 2008 -“Asia and Indian Ocean” Ceremony,
in Shanghai - China
India amongst top 2 most favored countries for tourists
world-wide
• as ranked by Conde Nast Traveller, UK in its Readers Travel Awards 2008 -
consecutively for the second year
India bagged the World Travel Award 2008
• for its role in developing and promotion of "Responsible Tourism” at
14th World Travel Market (WTM) - London

GUJARAT TOURISM SECTOR OVERVIEW
37
Tourist arrivals in the state experiencing strong growth – better than the country’s average
• Total tourist arrivals to Gujarat in 2010-11 stood at approximately 19 million as compared to around 10 million
in 2005, thus witnessing a 85% growth in tourist arrivals.
• International tourist arrivals grew at CAGR of 15% since 2005. This can be attributed to growing
prominence of the State as a major business hub and it being one of the choicest destinations for foreign direct
investments in India. Robust infrastructure, a very high rate of urbanization and supportive policies for
tourism promotion have been the other contributors.
• The overall year on year growth rate of total tourist arrivals in Gujarat has been higher than that of India as a
whole, indicating a better performance by the state on the tourism map.
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
25000000
20000000
15000000
10000000
5000000
0
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Total Tourist Arrivals YoY Growth Rate of Total Tourist Arrivals
YoY Growth Rate of International Tourists YoY Growth Rate of Tourist Arrivals in India
Major tourism circuits are spread out across
state, though Ahmedabad, Ambaji and Dwarka
continue to be the major tourist destinations
the
North Gujarat
Circuit comprising
of Himatnagar
& Palanpur
Ahmedabad Circuit, consisting
of Ahmedabad, Gandhinagar,
Modhera and Surendranagar
Kutch Circuit
Saurashtra Circuit comprising
of Rajkot, Junagadh, Veraval,
Somnath,Dwaraka &
Porbandhar South
Gujarat
Circuit
Consisting of
Saputara, Navsari
Surat and Baroda

• A high percentage of tourist arrivals from within the State indicates a stable growth of tourism in future
• Domestic tourism primarily led by tourists from within the State is gradually giving way to t
other Indian states which stands at almost 22% has increased from 19% in 2007. This can be attributed to
growing awareness of the state’s tourism assets and a booming economy.
International Tourism is increasingly growing in Gujarat and the total international tourist arrivals to Gujarat is almost 2% -
which is higher than the 1% figure for India
2010-11
2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
38
ourist arrivals from
France, 10%
United Kingdom, 22
Sources: Tourism Corporation of Gujarat Ltd, Department
of Tourism, Government of Gujarat
76.03%
Within
21.98%
1.99%
Other
Indian
States
Foreigner/
NRIs
Maharashtra
Madhya Pradesh
Rajasthan
Uttar Pradesh
Bihar
West Bengal
Other North Indian States
Others
Break up of domestic tourist arrivals to Gujarat
State wise Break up of tourist arrivals
from Other Indian States
State is also experiencing steady growth in international tourism
0.00 0.10 0.20 0.30 0.40 0.50
2003-04
Others, 30%
China, 4%
Singapore, 6
Canada, 3%
Germany, 4 Italy, 8%
Australia, 4%
USA, 9%

39
RELIGIOUS & SPIRITUAL
• Popular religious destinations like
Dwarka and Somnath
• Akshardham Temple at Gandhinagar
• Famous sites of Jainism – Palitana and
Girnar
• Islamic Dargahs at Sarkhej and Unjha
• Parsee pilgrimages – three of the
most important four
WILDLIFE TOURISM
• 4 National Parks and 21 Sanctuaries
• One of the only abode of of Asiatic
lions at GIR Sanctuary
• Popular Bird Sanctuary at Nalsarovar ,
Thol Lake and Khijadiya
• India’s first Marine national park at
Gulf of Kutch
• Desert Wildlife at Kutch
WELLNESS & MEDICAL
• World class hospitals at Ahmedabad,
Surat, Vadodara, Karamsad, Nadiad
offering high quality treatments at
affordable rates
• Home of Ayurveda for centuries –
Jamnagar one of the most important
place for ayurvedic studies
• Medical spas and cosmetic treatments
NATURE & BEACH
•
One of the longest coastlines dotted
with numerous pristine beaches at
Ahmedpur Mandvi, Chorwad , Golden
Sand at Surat and many others
• Hill Stations like Saputara and
Pavagadh
• Desert tourism at the Rann of Kutch
including the popular Black Hill
HERITAGE TOURISM
•
Popular archaeological sites including
ancient Harappan civilization sites at
Lothal , Dholavira at Kutch
• World Heritage Site at Champaner
• Several popular monuments like
Shaking Minarets and Adalaj Step well
• Historical forts at Diu, Junagadh
• Several Heritage hotels and resorts –
Kutch, Palanpur, Wankaner, Gondal &
other places
RURAL AND CULTURAL
•
Rural Tourism site at Hodka Village
Kutch – Winner of PATA Grand Award
2010 for rural tourism
• Rich handicrafts of Kutch
• Tribals and ethnic communities of
Dangs and Chotta Udaipur
• Various festivals and events like the
Modhera dance festival, longest
dance festival in the World – Navratri
celebrations

40
Tourism Sector Drivers : innovative campaigns, festivals and events
Modhera
Dance Festival
Khushboo Gujarat Ki – Brand Campaign with Indian cinema star
Amitabh Bachhan - Several campaigns featuring the star shot
International
at multiple locations across the state to increase
Kite Flying Festival
awareness of state’s diverse tourism assets
Navratri – 9 Nights
Dance festival
Rann Utsav -
Kutch Desert

41
Tourism Sector Drivers : Robust Infrastructure
Airport
Infrastructure
Road, Rail
Network & Port
Infrastructure
Educational
Infrastructure
Power Urban
nfrastructure
12 Domestic
Airports (highest
in any Indian
State)
and 1
International
Airport
Over 74,000 km
of road network
and 5,000 km of
rail network
connecting all
parts of the State.
Well developed
Ports -
opportunities
for Sea
Cruises & ferries
Well established
institutes of
Hospitality and
Hotel Management
which provide a
ready talent pool
for the tourism
industry
A power surplus
State with
excellent
availability of
electricity for
hospitality and
other industries
Several urban
infrastructure
initiatives
including
development
of urban
transport
like BRTS,
Metro

POLICY INITIATIVES AND INTERVENTIONS PLANNED
4.2.3
42

43
Tourism Sector Drivers : Government Supporting Agencies & Policies
Tourism Corporation of Gujarat Limited (TCGL)
Setup in 1975 – has been responsible for promoting tourism related commercial projects.
It has a special cell for mobilizing investment in the tourism sector.
Two SPVs have been set up for tourism development in Gujarat:
Guj-Tour Development Company Ltd (GUJTOUR)
• Being set up with a corpus of INR 1 billion to
develop, create and market tourism-related
infrastructure, products & projects
• Process for selecting the financial partner of GTDC
is currently underway
Gujarat Tourism Opportunities Ltd (GUJTOP)
• Setup in 2007 to identify tourist sites
for development and to set up project
development fund
• Responsible for conducting feasibility studies
for several locations across Gujarat and
spotting tourism opportunities
Marketing & Promotion
• FAM tours organised for tour operators, column writers of travel magazine and photographers
• Tourism Information Bureau (TIB) opened at Jaipur and 14 new Tourist Reception Centers (TRCs)
opened at ST bus stations
• Websites started in 7 different languages
• Road shows on regular basis all over India
• Gujarat Tourism Guide published as PPP initiative
• MOU signed with West Bengal, Tamil Nadu, Rajasthan, Kerala, Uttar Pradesh and Himachal Pradesh

44
Tourism Sector Drivers: Supportive Policies
Highlights of the Tourism Policy 2010
• Industry Status to the Tourism sector - this will enable investors to avail benefits which are extended to
other industries through Industrial Policy 2009
• Land Acquisition & Allotment
• Concession in Electricity Duty / tariff
• Tax holidays (as and when proposed)
• Tourism Incentive Package Scheme (TIPS): 2010-2015 is being proposed by the Government, which shall
offer special incentives
• Tax holidays on Luxury Tax, VAT on food and beverages, Entertainment Tax
• Concessions such as interest subsidy, reduction of Electricity duty and VAT on natural gas
• Modifications in the lending criteria to cover wider tourism related projects like amusement parks, wayside
facilities , service oriented projects like travel agencies, tour operators etc
Increased Budgetary Allocations
to promote tourism sector
35
100
164
183
200
250
200
150
100
50
0
2005-06 2006-07 2009-10 2010-11 2011-12
INR CRORE
Other Policies
• Entertainment tax reduced to 25% as
compared to the earlier rate of 50%
• No luxury tax on rooms up to tariff of INR 500
- from INR 501 to INR 2,000 - 4%
- above INR 2,000 per room - 6%
• Electricity duty reduced to 25% from
earlier 35%
• VAT on food reduced to 4% as against about
12% in most other states
These incentives make investments in hotels,
restaurants & entertainment facilities very attractive

4.2.4
45

OPPORTUNITIES IN GUJARAT TOURISM
Suggested Indicative Public Private
Current Locations - 13 Nos.
25000000
20000000
15000000
10000000
5000000
Chotila, Bhachau, Vataman Chokdi (Ahmedabad), Siddhpur, Lunavada, Vasda,
Unjha, Viramgam, Piplod Santalpur, Maitral,Dhari
70000
60000
50000
40000
30000
20000
10000
46
Augmentation of accommodation facilities and wayside amenities
0
0
2004 2011
Hotel Rooms
Total Tourist Arrivals
Linear (Hotel Rooms)
Linear (Total Tourist
Arrivals)
Gujarat’s popular religious and spiritual
destinations witness long queues and
heavy rush especially during festivals.
Budget hotels and accommodation
facilities provide a potential investment
opportunity . State government also
envisages development of Wayside
amenities centres .
Envisaged accommodation type in Dakor-Utkantheshwar
Fagvel – Champaner – Pavagadh Circuit alone locations cost funds investment
(INR million) (INR (INR
million) million)
Star rated (3/4) leisure, adventure and entertainment
park cum resort Utkantheshwar 2000 500 1500
Star rated (3/4) leisure, adventure, ecotourism resort Balasinor 150 37 113
Economic accommodation facilities Balasinor 5 1 4
Development of star rated (3/4) leisure resort / hotel Dakor , Champaner Each 600 Each 150 Each 450
Economic accommodation facilities Champaner 25 6 19
Way Side Amenities
• Rest rooms /Budget Hotels / Motels
• Restaurant / Food / Refreshment facilities
• Tourist information centre, Internet Cafes / kiosks, Telephone booths,
ATMs / FOREX providers
• First aid
• Petrol pumps, Car-wash, Auto-parts shops, repair Shops, Parking Lots
• Highway Facility Centre separate for Truckers/Passenger cars and buses
Estimated investment:
INR 50 million per location

47
Film-citie Film-studios
Media and entertainment project investments
Amusement
Parks
Digital Gaming
Zones
Multiplexes Sound &
Light Shows
Sports
Complex Water-parks
Special Entertainment Zones (SEnZs)
• Identification of specific zones to promote leisure and MICE Tourism
• ISEnZ’s expected to consist of quality hotels, resorts and restaurants
• IAdditionally upcoming Industrial clusters to identify and reserve land plots for tourism clusters
• IGrant of Long term lease of land for setting up of tourism infrastructure projects related to tourism
Special Project at Aliya Bet
• Proposed Components of Development:
• Entertainment Zone and Film City
• Amusement Parks, Resorts, Golf Course and Other Eco – Tourism Facilities
• Aquaculture Zone with Aqua Ponds and Aqua Marine Zones
• Cruise Ship Circuit
• Water Sports and other Recreational facilities like Boating, Sky trains
• Proposed Development is in 169 sq km out of which:
• Entertainment Zone - 36 sq km of area
• Aqua Culture Zone – 62 sq km
• Forest Zone 47 sq km
• Proposed Investment Size - INR 5,300 crore
Special Project at Dholera Special Investment Region
• Proposed Components of Development:
• Film City and Theme Parks over 1,350 hectares
• Resorts and Hotels over 3,600 hectares
• Adventure Sports Facilities
Total Area under Tourism Development: 6,320 hectares

48
Other Entertainment and Leisure Project Investments
Special project by Saputara Destination Department
• Components of Development
•
Hotels and Resorts
• Adventure Sports Park and Mini Golf Course
• Commercial centers
• Entertainment zones
• Training Institutes
• Lake Development
• Health and wellness facility
• Total area of Development across 91 Ha.
Special project at Marina
• State-Of-The-Art Marina to be developed at Umbargaon, Suvali, Miyani , Odedar, Porbandar
• Development and operation of the marina with construction of jetty, Berthing facilities, Lay By,
Anchorage, amenities required for small craft, yacht and speed boats
• Associated facilities like rest room, restaurant, Club House, etc. for vessel/ yacht crews
• Indicative Investment at each location estimated at INR 120 crore.

49
Restaurants &
Floating Hotels Drive-in resorts
Cruise and
Ferry Services
Water sports Maritime
museums
Sea Park /
Aquarium
Development of Beach Tourism Projects
Typical Project Components
Leisure & Amusement
• Hotels, Resorts, Spa, Clubs
• Beach sports & amenities
• Golf Courses
• Theatre & Cultural Events
Touring & Adventure
• Canoeing, Kayaking & Sailing
• Para-Gliding
• Scuba, Diving, Snorkeling
• Nature Trail Hike
• Ferry services
Locations
Nalia Mandvi, Suvali, Nargol, Beyt Dwarka, Okhamadhi,
Gopnath Relia, Somnath
Typical area of project: 5 – 10 hectares,
Estimated investment INR 100 crore
SR. No Location District Total Area
1 Naliya Mandvi Una, Junagadh 25 Ha.
2 Suvali Surat --
3 Bet Dwarka Jamnagar 87.38 ha
4 Okha Madhi Jamnagar 250.2 Ha.
5 Nargol Umbargaon, Valsad 24.9 ha
6 Gopnath Reliya Talaja, Bhavnagar 19.23 Ha.
7 Somnath Junagadh 91.65 Ha.

50
Promotion of Religious and Spiritual Tourism Locations
Upgrading of basic infrastructural facilities like
connectivity, water supply, drainage and health care
already being undertaken by the Government for most
religious destinations across the State like Dwarka, Ambaji,
Dakor, Palitana, Somnath , Girnar and other places to
promote development and private sector interest.
Restaurants Hotels & Resorts Dharamshalas
Local public
transport Renovation
Recreation
facilities
Integrated Plan for Holistic Development of Somnath : Project Rs 200 Crore
• Provision of Basic Infrastructure: Road, internal road work, electricity, water, solid waste management,
sewerage systems
• Site Specific tourist facilities -
- Somnath Lake , Bhalka Pond and Garden area , Bhidbhanian Mahadev, Golakhdham, Sun Temple
Integrated Development of Dakor: Project Cost Rs 50 Crore
• Provision of Basic Infrastructure: Internal road widening, electricity, water supply, solid waste management &
sewerage systems etc
• Site Specific Tourist facilities-
- Padukali bridge , Gomti Ghaat, Parking at 3 entry points, Jetty for boating, Temple arrival plaza
development, Lighting and decoration
Tourism Circuit: Dwarka-Bet Dwarka-Nageshwar-Gopi Talaav : Project Cost Rs 85 Crore
• Traffic and crowd management systems
• Site Specific activities like -
- Parikrama path , New Gomti Ghat
- Restoration of old Gomti Ghat
- Temple and Beach Developments

51
Heritage Tourism Projects
Factor’s that make Gujarat a potent heritage
tourism destination:
• State once had a concentration of more than 200
princely states
• Has diverse architecture styles and cultural
significance to showcase
• Cultural fairs and festivals add to the unique
experience for tourists
Key Project Categories :
• Star Category Heritage Hotel with Exhibition Cum
Convention Centre
• Creating unique tourism experience by clubbing
Heritage Tourism with Eco-Tourism and with Rural
and Craft Tourism
Locations
Poshina, Danta, Vijaynagar, Ahmedabad,
Patan, Modhera, Wadhvan, Wankaner,
Gondal, Palitana, Balasinor, Vadodara,
Jambooghoda, Chota Udaipur,
Rajpipla, Sayla

52
Airports and Airstrips Projects
GUJSAIL – Gujarat State Aviation Infrastructure Limited has been set up under the aegis of tourism development
department by Government of Gujarat for building infrastructure and training human resources for the aviation
sector of Gujarat.
GUJSAIL plans development of airports, air-strips and helicopter services at several locations, likely to be in PPP
mode – this opens up plentiful opportunity for private sector participation. Process for four airstrips at – Ambaji,
Dwarka, Ankleshwar and Palitana has begun
Airports Airstrips Helicopter services
• Bhavnagar
• Bhuj
• Gandhidham
• Mundra
• Porbandar
• Keshod
Amreli
• Mandvi (Kutch)
• Ankleshwar
• Palitana
• Ambaji
• Dwarka
• Girnar
•
• Somnath
• Dwarka
• Bet Dwarka
• Ambaji
• Palitana
The State Government is also planning to
establish a regional airline on PPP
mode – State might look into assuring the
private operator a guaranteed minimum
seat utility

53
World’s Tallest Statue Proposed as the Symbol of Unity
Sardar Patel – One of the tallest leaders and
respected freedom fighters of the Indian freedom
struggle.
The Government of Gujarat plans to immortalize the
Iron Man of India by building the world’s tallest statue
which will stand 182 metres tall. The Statue of Unity
which will come up at Sadhu Island, 3.5 km south of
Sardar Sarovar Dam is planned to be developed as a
major tourism epicentre. The Statue would have lifts
to ferry tourists to the top of the Statue where
restaurants and other facilities are planned as an
additional crowd puller.
The iconic tourism destination is also expected to
provide a big fillip to the overall tourism footfalls in
the State and catapult the State as a major player in
the national as well as global tourism landscape
Opportunities to Invest
Development of the structure
Tourism projects and services around the structure
Hotel, Convention Centre, Memorial Garden and
Visitor Centre Building

80
70
60
50
40
30
20
10
56
INDIA – IT/ITES SCENARIO
LARGE INDUSTRY
The Indian IT industry is a USD 88 billion industry with 80% of the
revenues coming from exports. It has been growing at a CAGR of
about 17% in last 5 years (FY07-FY11).
The Indian IT & ITeS sector employs over 2.5 million skilled people.
Employment has been growing at a CAGR of about 20% in during
FY07-FY11.
The per capita GDP contribution of IT-BPO employees is about 80
times that of a person employed in the agriculture sector
The IT-BPO industry currently contributes 14% to India‘s total exports
Between 2000 and 2011, the IT/ITeS sector received cumulative FDI
of USD 107 billion
India is referred to as the back office of the world, with its strong cost
advantages and skilled work force in providing ITeS.
GROWING INDUSTRY
IT / ITeS industry is expected to be USD
320 billion by 2020. The CAGR for the
decade (2011-2020) is pegged at 15%
Domestic BPO market would increase to
USD 2.5 billion by 2014
The Indian electronics turnover is
expected to be USD 400 billion by 2020.
TRAI is targeting a 10-fold increase in
broadband subscribers to 100 million by
2014 from existing 10.3 million
Industry has also started to impact rural
areas – rural BPO organizations employed
more than 5,000 people in FY2009
31
40
46 50
59
70
0
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 (e)
Revenue share by main components
IT
ITeS
Software Products and
Engineering services
Hardware
IT/ITeS exports in USD billion
50%
17%
13%
20%

INDIA – IT/ITES SCENARIO
57
Industry characteristics
• Major segments: 1. IT Services, 2. ITeS – BPO, 3.
Software products and Engineering Services,
4. Hardware
- Segment-size: IT services is the biggest in
size (the revenue from IT services
constitutes about 50% of the total industry
revenues)
- Segment growth: Software products &
Engineering services are fastest growing
(CAGR – 27.5%) and slowest growing
segment is Hardware (CAGR – 17%)
• Larger companies depend more on export
and smaller ones more on domestic market –
hence, larger companies would prefer an SEZ
over other IT space (such as an IT Park)
because of export incentives provided in
SEZs.
• In the future, domestic market would be the
growth driver for the IT industry – even the top
10 companies’ revenue dependency on
domestic market would increase.
Source: NASSCOM
Revenues of different components
of IT/ITeS Industry. CAGR for FY05 to FY 10.
CAGR 10.5% CAGR 21.8%
IT
Services
50%
Hardware
13%
Software
Products &
Engineering
Services
17%
ITeS -
BPO. 20%
CAGR 23.1%
CAGR 27.5%
Export and domestic % aggregate revenue of
top 100 software vendors (FY10)
67.20%
40.80%
25.20%
32.80%
59.20%
74.80%
100%
80%
60%
40%
20%
0%
Top 1-10 Top 11-50 Top 51-100
Export Domestic
IT services
form the
largest
portion of
IT/ITeS
revenues

BPO
Packaged software
58
INDIA – INTERNATIONAL FOCUS
Global sourcing from India of IT/ITeS accounts for 55% of the global market in
offshore IT services and garnering 35% of the ITeS/BPO market
A majority of the Fortune 500 and Global 2000 corporations
are sourcing IT/ITeS from India
India accounts for around 28 per cent of IT and BPO talent
among 28 low-cost countries.
90-95% of Indian hardware production market is presently
benefitting foreign players
Bilateral development cooperation
• Focused on over 25 priority countries in Middle East regions,
Africa, Asia, Latin America, Europe, North America, etc.
• Given due recognition to India’s strength in IT sector, several
countries in South America, Caribbean region, Africa and CIS
regions are approaching Indian government for seeking
technical assistance in the area of IT infrastructure,
networking, capacity building, HRD and e-government etc.
• Countries with whom we have bi-lateral understanding
- Africa – Ghana, Mauritius, Tanzania, Madagascar, Namibia,
Zambia, Uganda, Seychelles, Lesotho, Tunisia
- Asia – Myanmar, Vietnam, Thailand, Brunei, Lao PDR,
Mongolia, Malaysia, Saudi Arabia, South Korea, Egypt, Israel,
Sri Lanka, Japan
- CIS Countries – Uzbekistan, Tajikistan, Armenia, Belarus,
Turkmenistan, Russia, Kazakhstan
- Europe - Republic of Bulgaria, France, EU
- Oceanic Countries – Australia and Fiji
- USA
1125
599
293
147
1150
645
309
153
2011
2010
0 200 400 600 800 1000 1200 1400
Hardware
Engineering and R&D
USD billion
Global
spending of
USD 1.7
billion
Rest of the world
including Asia:
9%
Americas 60%
Europe 31%
Importers of Indian IT/
services
ITeS
Source: Department of Electronics and Information Technology, GoI

FUTURE OUTLOOK
59
The total IT / ITeS industry in India should be USD 230 billion to USD 320 billion
300
250
200
150
100
2007
2008
2009
2010
2011
2012
2013
Source: PwC analysis
compared to about USD 90 billion today
We have projected the Indian IT sector demand for four different scenarios as tabulated below.
Scenario Description Projected
Projected
CAGR CAGR
(Exports) (Domestic)
Scenario 1 If assumed that future growth will be same as
last 5 years' CAGR (FY07-FY11) 17% 15%
Scenario 2 (Base case) If NASSCOM projections are used 13% 14%
Scenario 3 (Optimistic) If CAGR is 2% more than NASSCOM projection 15% 16%
Scenario 4 (Pessimistic) If CAGR is 2% less than NASSCOM projection 11% 12%
50
Export Revenue Projections in billion USD
120
100
80
60
40
20
-
Domestic Revenue Projections in billion USD
-
2014
2015
2016
2017
2018
2019
2020
Scenario 2 Scenario 1 Scenario 3 Scenario 4
2008
2007
2010
2009
2011
2012
2013
2014
2016
2017
2015
2019
2018
2020

• Considering all the scenarios, the total employment in IT / ITeS industry in India should reach 6.5 million to 9.5 million people compared to about
3 million people currently
• A large portion of this employment is expected to occur in the ITeS (BPO/KPO) exports sector, followed by IT exports and then in the domestic
market.
Expected changes in educational profile of the workforce - A large portion of the workforce are currently engineers and MCAs – over 80%. The
proportion of graduates of science and other streams engaged in software development is expected to show significant increase from about 5% to
10% currently to about 15% to 20%. This would be driven by the following factors:
• Demonstrated willingness by firms to train graduates and employ them in software development and functionality
testing.
• Increasing desire by graduates from such stream to enter into attractive IT industry.
• Pricing pressure and the need to remain cost competitive which would drive IT companies to develop a relatively low cost talent pool.
60
FUTURE OUTLOOK
The total employment in IT / ITeS industry should reach 6.5 million to 9.5 million
people compared to about 3 million people currently
We have projected the Indian IT sector employment figures for four different scenarios as tabulated below.
Scenario Description Projected
Projected
YoY growth YoY growth
rate (Exports) rate (Domestic)
Scenario 1 If assumed that growth CAGR will be same as
past few years 28% 9%
Scenario 2 (Base case) If NASSCOM projections are used 12% 11%
Scenario 3 (Optimistic) If CAGR is 2% more than NASSCOM projection 14% 13%
Scenario 4 (Pessimistic) If CAGR is 2% less than NASSCOM projection 10% 9%
300
250
200
150
100
50
-
Employment projections in IT exports
2008
2010
2016
2017
2019
Employment projections in domestic IT market
2,500,000
2,000,000
1,500,000
1,000,000
500,000
-
No of people (in lakh)
2004
2005
2006
2007
2009
2011
2012
2013
2014
2015
2018
2020
No of people
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020

61
GROWTH DRIVERS AND GROWTH AREAS
1) Increase in Global IT Services spending:
The IT spending is expected to grow at 6.3% globally in the next 5-6 years. Given the growth in
the spending base, as well as India being poised to increase its share from current levels of
about 7% in the IT Services space, it is well poised to tap into the global IT spending. The market
is expected to triple from US $ 500 billion today to US $ 1.5 to 1.7 trillion by 2022.
2) Growth in domestic spending:
As per the BRIC Report of Goldman Sachs, India is likely to be the only country among BRICs to
clock GDP growth between 5% and 6% across all years till 2050. This would fuel growth in a host
of downstream industries where IT adoption would be high, such as BFSI. Other areas which
will drive domestic demand are increasing government spend on IT and e-governance.
Industry adoption will be spearheaded in BFSI, telecom, retail, and healthcare.
3) The Indian domestic market is fast emerging as a globally significant market for services.
Critical areas like Aerospace, Defence and e-Governance beckon Indian IT vendors and
global giants eager to participate in the Indian growth story driven by domestic consumption
and demand for services.
Areas driving demand
By 2020 new verticals (Public sector
and Defence, Healthcare, Utilities,
Printing and Publishing) and new
geographies (BRIC) will account for 50-
55% growth in the addressable market.
Post 2020, growth drivers in addition
to traditional IT and BPO services for
large companies (in the Fortune 500) in
US and EU will arise from Small and
Medium Businesses (SMBs), public
sector, healthcare, media, and utilities.
A significant portion of the growth
would be driven by markets in BRIC
countries, APAC, Japan, and Rest of the
world.
1) Expansion of Indian operations of
global companies
Companies are increasingly investing in
developing their Indian operations as
think-tanks to their global operations.
Companies like GE have already been
successful in developing rule changing
healthcare solutions through their Indian
R&D set up. This is enabling them to establish
a presence in the cost conscious SE Asian
market in the short run and remain globally
relevant in the long run.
2) Policy incentives by states
The increasing participation of various
states in India to tap into India’s IT/ITeS
growth story has opened up entirely new
possibilities for both, companies as well
as the people at large. An attractive
business centric taxation and benefits
regime has seen a greater interest
amongst the IT/ ITeS provider community
as well as a more widespread distribution
of wealth across the country. We expect
this trend to continue in the near future.
Markets beyond US and EU, especially
BRIC and APAC will be major growth
areas in the future. These markets are
expected to witness growth much
more than the US and EU.
Expansion of IT and ITeS Industry to tier-
2 and tier-3 cities is critical for achieving
cost competitiveness and inclusive
growth. And this expansion is expected
looking at markets opening up further
and supported by large investments in
innovation, skill building, IP creation,
and development of IT infrastructure in
tier-2 and tier-3 cities.
Key reasons for growth in demand
Key reasons why India will be able to capture the above demand Areas that will capture demand
Source: PwC analysiss

63
IT/ITES – GUJARAT SCENARIO
IT exports from Gujarat in Rs. crore
564
681
1,268
1,035
1150
1400
1200
1000
800
600
400
200
0
2006-07 2007-08 2008-09 2009-10 2010-11
The stretch between Ahmedabad and
Gandhinagar is now being developed as
a knowledge corridor. Land has been
allotted and several IT parks and centres
of excellence are taking shape here.
More than 1,000 ICT & BPO companies are
operational in Gujarat.
127 new companies are registered with the
Commissionerate of Information Technology.
More than 1,250 companies are registered with
Gujarat Electronics & Software Industries
Association (GESIA)
IT units in Gujarat are spreading their markets
from the US to other regions like Europe, Middle
East and Africa
I nfrastruc ture available at I n fo c i t y -
Gandhinagar, GNFC Infotower - Ahmedabad,
Astron IT Tech Park - Ahmedabad and another one
is coming in Baroda
Ahmedabad
14 Special Economic Zones have been
planned specifically for IT/ITeS – 7 are
notified and 7 have secured
formal approval
Source: http://www.gnr.stpi.in, GIL; Gujarat Electronics & Software Industries Association (GESIA),
Commissionerate of Information Technology
Vadodara
Valsad
Gandhinagar

Accede Learning and
Information P. Ltd
Arth Infosoft Vavni Services Pvt. Ltd. Nusun Genetics Research ltd You TELCOM
Echelon BPO private Ltd. Tata Communication Outsourcing Services P. Ltd Maxim India
Effective Tele Services Tata Consultancy Services BlazeNet Ltd. Navinya CADsoft Pvt. Ltd.
iServe Systems Pvt. Ltd. Cybage BSNL Vyapar Capital Market
Smruti Compubits C-Metric Solutions P. Ltd E Fact Geo global Private Ltd
Perfect IT Solutions Futures First E-Voice Teleservices Varologic Pvt. Ltd
64
EXISTING IT INFRASTRUCTURE
Infocity in Gandhinagar
Gandhinagar
Ahmedabad
STPI Gandhinagar has its jurisdiction over
entire Gujarat Province, and Union Territories
of Daman, Diu and Dadra-Nagar Haveli.
• Gujarat International Finance Tec-City (GIFT) -
A one stop destination for global financial
services industry spread over 500 acres
between Gandinagar & Ahmedabad
• The Infocity is a global ITeS Outsourcing hub developed over
150 acres in Gandhinagar, provides world class infrastructure
to BPO, KPO, Software development & other ITeS outsourcing
companies.
• It has received an award for best conceptualized IT Park in
India
• It acquires all benefits of STPI
• Companies present in Infocity are listed below
Built space
Multi-services Domestic
EZS tariff area
250 acre 250 acre 7.5 mn. sq. m.
FSI/FAR Green belt Building
height
3.6 50.59 mn. sq. m. 400 m.
Apcons Infotech, Stay In Front GIPL
Source: GIL; Gujarat Urban Development Corporation (GUDC); http://www.theinfocity.net

65
IT/ITES – GUJARAT SCENARIO
About 50% of the IT/ITeS service providers are
looking to move or expand to tier 2 cities for
perceived benefits like availability of low-cost
skilled resources, lower real estate cost and lower
attrition.
Potential benefits of moving or expanding to Tier 2 cities from
Tier 1 cities (among IT/ITeS service providers)
CSR initiatives -like Rural BPO
Regional language capabilities
Presence of SEZs
Lower attrition
Lower real estate costs
Source: NASSCOM; Director of Technical Education, Gujarat State
71%
57%
50%
36%
29%
21%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Availability
skilled resources
of low-cost
Even with labour and real
estate costs on the rise, the
locations in Gujarat (Ahmedabad,
Gandhinagar, Vadodara
and Surat) offers cost
benefits relative to
urrent hubs

66
KEY ENABLERS FOR SECTOR IN GUJARAT
Gujarat is fast emerging as an
ideal destination for IT, ITeS
business to scale new heights
Today 90% of IT services works in India take
place from major six destinations – Delhi,
Mumbai, Chennai, Bangalore, Hyderabad,
Pune, In the coming year I clearly envision
40% of IT services work happening outside
of these six cities. This gives Ahmedabad a
major opportunity to be become a major
IT destination in the future in the ICT space.
With an integrated IT Policy, initiatives like
GSWAN, e-governance and GIFT, Gujarat
has immense potential to become the
next IT hub
– Mr. Som Mittal, President, NASSCOM
Business
friendly
governance and
investor friendly IT
Policy &
initiatives
Gujarat
evolving as
an ideal destination
for IT / ITeS
Robust
Physical,
Social and
industrial
infrastructure
Land Bank
availability
and relatively
lower real
estate
Skilled human
resource
advantage and lower
cost of manpower.
Lowest BPO
attrition rate
Growing IT
SEZs and
peripheral
industries of
IT
Lowest
start -up and
operational
costs
Growth in IT space in Gujarat is expected at CAGR of 15% over the next 10 years – Mr. Som Mittal

67
60,000
40,000
No. of seats available in engineering
colleges in Gujarat during 2010-11
Source: The Times of India
GUJARAT – IT EDUCATION
-
20,000
Diploma Bachelors
degree
Masters
degree
Self Finance
Grant in aid
Government
Zone Colleges IT seats
Ahmedabad 8 600
Gandhinagar 16 1,080
Rajkot 12 660
Surat 4 225
V.V. Nagar 11 840
Total 51 3,405
The All India Council of Technical Education (AICTE) has
given approval to 9,600 additional seats in the
engineering colleges in Gujarat from 2012
• Gujarat has 82 MCA colleges with 6,670 seats
(2012). There is an increase of nearly 1000 seats
in intake capacity from 5,716 seats in 2011

POLICY INITIATIVES AND INTERVENTIONS PLANNED
4.3.3
68

• Software Technology Parks of India (STPIs) was set up as an Autonomous Society in 1991 for the promotion
of software exports from the country. There are currently 51 STPI centres where apart from exemption from
customs duty available for capital goods, there are also exemptions from service tax, excise duty, and rebate for
payment of Central Sales Tax.
• Enacted comprehensive legislation (IT Act 2000) which covers copyright protection and cyber laws
Copyright and Intellectual Property Rights (IPR) of computer software covered under the Copyright Law.
• Special Economic Zones (2005) offer a wide range of duty concessions and exemptions for IT exports
• National eGovernance Programmes (NeGP) approved in 2006, comprising of 27 Mission Mode Projects
(MMPs) and 8 components
• Policy formulated for Information Technology Investment Regions (ITIRs) in 2007. These would be
endowed with excellent infrastructure to reap the benefits of co-siting, networking and greater efficiency
through use of common infrastructure and support services.
• Task Force to Stimulate Growth was set up in 2009
• Constitution of the Technical Advisory Group for Unique Projects (TAGUP) in 2010, under the
chairmanship of Nandan Nilekani, to develop IT infrastructure
• National Policy on Electronics was released in 2011 aiming at achieving a turnover of USD 400 Billion by
2020 involving investment of about USD 100 billion and employment to around 28 million by 2020 and to set
up over 200 Electronic Manufacturing clusters.
• National Policy on IT 2011 was drafted in 2011 for encouraging development of IT/ITeS sector in the country.
• National Telecom Policy 2011 – to provide affordable and reliable broadband on demand by the year 2015, to
provide high speed and quality broadband access to all village panchayats by 2014 and to achieve 175 million
broadband connections by 2017 and 600 million by 2020.
69
GROWTH DRIVERS
POLICY SUPPORT BY GOVERNMENT OF INDIA
Continuous liberalization and reform policies for export promotion and Tax/duty incentives
Source: Department of Electronics and Information Technology, MoC&IT, GoI

70
GROWTH DRIVERS-NATIONAL POLICY ON IT 2011
AIMs at MARKING A CHANGE
•
To increase revenues of IT and ITeS
Industry from USD 88 Billion at present
to USD 300 Billion by 2020
• To expand exports from USD 59 Billion
at present to USD 200 Billion by 2020.
• To create a pool of 10 million
additional skilled manpower in ICT.
• To make at least one individual in every
household e-literate.
• To provide fiscal benefits to SMEs and
start-up ventures in key industrial
verticals
• To gain big global mkt share in
cloud-based services & mobile-based
value-added services
• To leverage ICT for key Social Sector
initiatives
• To strengthen the Regulatory and
Security Framework for ensuring a
Secure Cyberspace ecosystem
• To attract investments in IT in Tier-II & III
cities
Domestic Exports
• Strategies formulated in the Policy to achieve targets
• Creating ecosystem for a globally competitive IT/ITeS Industry
• Human Resource Development
• Promotion of Innovation and R&D in IT Sector
• Enhancing productivity and competitiveness in key sectors
through ICT
• Creating an ecosystem for Internet and mobile driven Service
Industry
• Enabling Service Delivery through e-Governance
• Mobile based Value added Services
• Development of Language Technologies
• GIS based IT Services
• Security of Cyber Space
100
200
Targeted
revenue in
USD billion
by 2020
59
Current
revenue in
USD billion
in 2011
29
Enabling IT
Policy 2011

IT Policy of Gujarat – key features
• To attract investments in IT sector so as to achieve a turnover of Rs.5000 crore.
• To promote and develop employment opportunities in the IT sector and provide direct employment to 200,000
persons
• Identify suitable government land and reserve those for IT industry / IT Parks.
• Assist IT industry/infrastructure units in acquiring land under the Land Acquisition Act
• Advise the UDAs/ Municipal Corporations to develop town planning schemes in such a manner that land parcels
are made available for development of IT Industry / IT parks.
• State shall facilitate grant of SEZ status to IT Industry / IT Parks subject to the provision of SEZ Act/rules.
71
Source: The Times of India
FOSTERING GROWTH OF IT/ITES
POLICY SUPPORT BY GOVERNMENT OF GUJARAT
Active promotion and strengthening of educational infrastructure in the state to supply skilled
manpower
•
companies
• Set up a certification mechanism which will prescribe certain tests to ascertain candidates’ skills in different
areas suitable for employment in IT sector.
GoG promotes training institutes which provide specialized training in domain specific skills required by ITeS
Promotion of KPO based industries
Incentives
• On case to case basis, a special package of incentives will be offered for mega IT projects
• Financial Assistance to high-tech park will be administered
The State Government has constituted an IT Task Force for the development IT Sector in Gujarat
Gujarat has crossed many milestones in its e-Governance endeavors

72
IT/ITES INITIATIVES IN GUJARAT
The Gujarat State Wide Area
Network (GSWAN) connects
the State capital with all its
25 districts and 225 block
headquarters. It is Asia’s
largest Internet
Protocol-based network.
The National Association of
Software and Service Companies
or Nasscom has formed Regional
Council for Gujarat with a view to
develop the information and
communication technology
sector in the state
The total investment planned in the shelf of projects in IT sector is Rs. 4,289 crore by 2020
There is a steep rise in the
number of technical institutions,
larger number of technical
graduates than 10 years ago.
There are more than 100
engineering colleges
GESIA and GIL have jointly
initiated the development of
the comprehensive Directory of
Gujarat’s ICT Industry. The
Gujarat IT Directory would
serve as the SINGLE WINDOW
reference point to anyone
requiring information
regarding ICT sector of
Gujarat.
GIFT is conceptualized as the
first Financial Services SEZ to
be developed as a global
financial hub. With its strategic
location, state of the art
infrastructure, green and
intelligent buildings it is poised
to become a globally
benchmarked International
Finance Centre providing
exciting opportunities for
financial services and IT/ITeS
sectoral companies.
• GoG rolled out at least 50
citizen-centric services for
online interactions with
people,.
• Started a special incentive
package for semiconductor
industry which is unique in
India in terms of incentives.
• Formed a IT Programme
Implementation Committee in
Department of Science and
Technology

73
IT/ITES INITIATIVES IN GUJARAT
After E-Gram project for
providing basic IT connectivity
to all the district, taluka and
village panchayats, the GoG
is now all set to launch a
comprehensive e-panchayat
project in order to create
a complete database and
monitor all the activities
taken up in the rural areas.
Gujarat has received the
United Nations Public
Service Award (UNPSA),
2010, for its State Wide
Attention on Grievances with
Application of Technology
(SWAGAT), in the category
'Improving Transparency,
Accountability and
Responsiveness
in Public Service'.
The Government of Gujarat
has been triple awarded
in the National e-governance
awards this year given by the
Government of India.
The official portal of Hon'ble
CM of Gujarat
(www.narendramodi.in) got the
prestigious eGov 2.0 award for t
he 'Most innovative use of
social Media'. State Portal
(www.gujaratindia.com)
too won an award for the
'Most user friendly portal
Taluka level SWAGAT was launched 2 years ago. GoG has initiated rural
edition of SWAGAT, called 'Gram SWAGAT' in villages from 01 February 2011.

4.3.4
74

75
• During the Vibrant Gujarat Investment
Summit 2011, 115 MoUs were signed for the
IT/ITeS sector as against 20 MoUs in the 2009
Summit.
• The proposed investment amounted to Rs.
68,565 crore and could provide employment
to 320,000 people.
• Foreign Investments proposed in the sector by
USA were about Rs. 5300 crore employing
14000 people.
46507
142992
68,565
320,000
350000
300000
250000
200000
150000
100000
50000
0
Investment in Rs. crore Employment
2009 VG Summit 2011 VG Summit
Emergency services
Cloud based services and solutions
SEZs
Hardware manufacturing
Urban and rural planning – using GIS, remote sensing
Knowledge Process Outsourcing
Data / Computer Centres
Execution of E-Governance initiatives
IT based education and trainings

76
GUJARAT – IT GIANTS KEEN TO INVEST IN GUJARAT
Patni Computer System Ltd. (was India's
sixth-largest software exporter before the
acquisition) now iGate Patni, has been
present in the state for many years. It
now provides effective solutions to over
350 Fortune 1000 clients globally across
verticals, clocking a revenue of USD1
billion.. It started with a strength of
400 people and now has a diversified,
well-trained and motivated talent pool
of 26000 people which works cohesively
to deliver solutions to clients across the
Americas, EMEA and Asia-Pacific.
Source: Department of Science & Technology (DST)
Gujarat serves as an inspiration for the entire country.
One of India’s most industrialized states, Gujarat’s per
capita GDP is almost twice the national average. The
time is now ripe for the state to emerge as the
country’s most vibrant ICT Hub
Mr. Kishore Chitale,
Head-India Domestic Business,
Capgemini India
HCL Infosystems in
0 500 1000 1500 2000 2500
2013 (e)
2010
No: of employees of
Gujarat - CEO, Mr, Harsh Chitale
Focus growth areas for Gujarat
will be semiconductors/IT
Hardware, BPO/KPO, IT/
ITeS services
Infosys and Mahindra Satyam
expressed interested in setting
up facilities in Gujarat. Infosys
BPO is also considering
coming into Gujarat

78
GUJARAT – THE STATE WITH STRATEGIC LOCATION

79
GUJARAT – INDIA’S ECONOMIC POWERHOUSE

80
GUJARAT – ROBUST INFRASTRUCTURE

81
GUJARAT – STRONG URBAN, SOCIAL AND EDUCATIONAL INFRASTRUCTURE

82
GUJARAT – LAND OF INNOVATIVE HUMAN CAPITAL

GUJARAT – NEW PARADIGM FOR INDUSTRIAL GROWTH
The current phase – involving Integrated development of large areas like SIRs,
PCPIR and DMIC – is poised to transform the industrial scenario in the state
Phase of industrial development
Level of Integration
202 Industrial
Estates
83 product
clusters
SEZs
• Multi product
• Chemical
• Textile
• Pharma
• IT / ITeS
• Electronics
• Engineering
• Biotech
• Gems &
Jewellery
Integrated large area
developments
• Special Investment Regions
(>100 sq. km.) and Industrial Areas
(50-100 sq. km.)
• Delhi Mumbai Industrial Corridor
• GIDC Industrial Estates
• Petroleum, Chemicals and
Petrochemicals Investment Region
• Knowledge corridor
• Logistics parks
• Theme towns
Phase I Phase II Phase III Phase IV
83

84
GUJARAT - PROACTIVE GOVERNANCE
Source: Socio-Economic Review Gujarat, 2011-12, Department of Economic affairs, March 2009

85
OPPORTUNITIES TO INVEST IN GUJARAT

86
OVERALL FRAMEWORK FOR DOING BUSINESS

Source: TERI, GEDA
DOING BUSINESS IN GUJARAT
87
6

90
FRAMEWORK FOR SETTING UP INDUSTRY IN GUJARAT

91
KEY GOVERNMENT AGENCIES
7

92
INDUSTRIAL PROMOTION FACILITATORS

93
KEY CONTACT PERSONS
Department of Science & Technology
Shri Ravi Saxena, IAS,
Additional Chief Secretary
Phone: 91-79-23259999
E-mail: secdst@gujarat.gov.in
Gujarat Informatics Limited
Shri Neeta Shah - Director (e-Governance and
Center of Excellence)
Phone: 91-79-23256022 Fax: 91-79-23238925
Email: info@gujaratinformatics.com
Mr. Vipul Mitra
Principal Secretary (Tourism, Pilgrimage and
Devasthan Management)
Industries and Mines Department
Phone: +91 79 23250583, Fax: +91 79 23250587
www.gujarattourism.com
Mr. Ramakant Jha
Director,
Gujarat International Finance Tec City Co. Ltd.
Phone: +91 79-30018300/27912511
Fax: +91 79-27912516
www.giftgujarat.in
Mr. Sanjay Kaul, IAS
Managing Director,
Tourism Corporation of Gujarat Ltd
Phone/Fax: +91 79 66701001
sanjay@gujarattourism.com
www.gujarattourism.com
Mr. Jagdish Shah
Assistant General Manager
Industrial Extension Bureau
Phone: +91 79 23250400
jsshah@indextb.com
www.indextb.com

National Partner Knowledge Partner Exhibition Partner
Relationship Partner Airline Partners
nd Head Office: Block No. 18, 2 Floor, Udyog Bhavan, GH-4, Sector 11, Gandhinagar 382 010 Gujarat, INDIA
Phone: +91-79-23250492/93 Fax: +91-79-23250490
www.indextb.com, www.ic.gujarat.gov.in E-mail: indextb@indextb.com
Regional Office: A-6, State Emporia Building, Baba Kharak Singh Marg, New Delhi 110 001, INDIA
Telefax: 011-23747002, 23360049 E-mail: indextbnd@indextb.com
For more details and online registration, log on to www.vibrantgujarat.com

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