Ahmedabad, January 17:

Special Economic Zones (SEZs) have emerged as the single largest investment sector in the just-concluded Vibrant Gujarat Global Investors Summit, accounting for 38.1 per cent of a total investment of around Rs 4,480 billion (about $100 billion) in 308 MoUs signed with the Gujarat government.

The MoUs relating to SEZs have promised an investment of Rs.1,706 billion ($38.5 billion) with a potential to employ about 605,640 people, according to an expert analysis of investment data available here.

But power, oil and gas, ports, civil aviation and rail transport together have accounted for 45 per cent of the total investment or Rs.2,022 billion ($45 billion).

The disappointing sectors were agro food processing, which accounted for 2.57 per cent, engineering, auto, ceramics (2.84 per cent), textiles and apparels (1.82 per cent) and tourism (2.37 per cent). Education was just 0.12 per cen) and medical tourism 0.37 per cent.

The first major disappointment relates to textiles and garments. According to a quick analysis, most of the MoUs inked are for capital-intensive projects. V L Mote, a former faculty member of the Indian Institute of Management (IIM), Ahmedabad, who specialises in textiles, opined that since no details were available for investments within the SEZs, it was difficult to give a qualitative estimate of the investment pattern.

But in industries comprising textiles and garments, the investment pattern appeared to be skewed towards textiles and less towards apparels. At least an average of Rs 900,000 ($20,330) will be needed to create one job. For a labour intensive industry this was high, Mote said.

He said Gujarat has a tremendous competitive advantage in garments with the availability of raw material and a big domestic market. But the state did not have the manufacturing capacity to meet the demand.

“This is opening the way for import of garments to meet Indian demand. This means that Gujarat will be passing on its advantage to overseas competitors like China, Hong Kong and possibility South Africa,” Mote added.