Double-digit growth in Gujarat's FY18 SEZ exports, GIFT City's IFSC to lead

After falling by 20% in previous years, SEZ exports from the state grew 4% in FY17

After a dull period, SEZ exports from Gujarat are back on track. They rose four per cent in financial year (FY) 17, after falling 20 per cent in FY'16 and FY'15, respectively. SEZ exports from the state, however, are likely to post double-digit growth in FY18, on the back of the finance SEZ at GIFT City and the Zydus Pharma SEZ, which are clocking robust growth numbers. 

The state, which accounts for nearly 30 per cent of national SEZ exports, witnessed a fall in value thanks to the crude oil price decline dragging the export value from Reliance SEZ at Jamnagar. However, volume wise, exports from Reliance had not dipped at all. An emailed query to Reliance Industries Limited (RIL) did not elicit any response.

According to Upendra Vasishth, zonal development commissioner, Gujarat (SEZ & EOUs), Gujarat has 29 notified SEZs, of which 19 are operational and at best three more are likely to become operational in the near future. 

"For three years including 2013-14, 2014-15, and 2015-16, we had seen a fall in exports from SEZs in Gujarat. However, last year, there was a turnaround with exports growing at four per cent. GIFT City's IFSC (International Financial Services Centre) will contribute further to exports growth and this is just the beginning. Last year, exports from GIFT's IFSC were Rs 270 crore and this year they could go beyond Rs 1,000 crore," said Vasishth.

Pipping RIL as the lead contributor to growth in exports from Gujarat, Gujarat International Finance Tec-City's (GIFT City's) IFSC has clocked exports growth of a whopping 3,923 per cent in FY 2016-17 at Rs 283.68 crore over the previous year's Rs 7.05 crore.

IFSC transactions at GIFT City – covering banking, insurance, and capital market services – have increased 400 per cent from $1 billion to $4 billion in the past six months. While IFSC units (IBUs) of various banks have done business worth $3 billion, insurance companies have clocked in $1 billion worth of transactions. BSE's International stock exchange within GIFT IFSC has seen single day trading of around $100 million. In addition, 13 new units have recently received approval to set up their base within GIFT IFSC. With this, a total of 100 units now have a presence in GIFT IFSC. 

IBUs of around 13 broking, information technology, reinsurance, and banking firms, including HDFC Bank Limited, Karvy Broking Ltd, Pabhudas Lilladher IFSC Pvt Ltd, JM Global Wealth IFSC Pvt Ltd, Softpulse Technology, Airan Global Pvt Ltd, Lucent Innovation, and JB Boda Reinsurance Brokers Pvt Ltd, among others, have been approved. 

Among other SEZs, Zydus' Pharmez clocked 35.8 per cent growth in terms of the value of exports. In fact, from FY'15 to FY'17, the Zydus SEZ has literally doubled its exports in value terms; from Rs 1,103.27 crore in FY'15 to Rs 2,048.40 crore in FY'17. The Surat SEZ clocked a 32 per cent growth (Rs 20,478.73 crore) in FY'17, Dahej grew 20 per cent, GIDC Apparel Park grew 41 per cent. The TCS SEZ at Gandhinagar did well too, growing 17 per cent year on year (yoy), while the Sterling SEZ of Sandesara Group posted robust numbers at Rs 816 crore in FY'17 from Rs 364.96 crore in FY'16, up 124 per cent. 

On the other hand, Adani Ports and SEZ (APSEZ) clocked a six per cent growth rate as well, after falling by 17.5 per cent in FY'16 over the previous year. APSEZ had received a blow from the Gujarat High Court in the beginning of 2014 when the HC had ordered a shutdown of 12 units at the SEZ located in Mundra, Kutch district, with immediate effect. The court ordered a closure of the 12 units in the premises of the SEZ, as these had violated its earlier order of May 2012.

APSEZ's problems began in December 2011, when people of Navinal village in Mundra had filed a PIL against it and other companies operating within the SEZ, after which, in May 2012, the Gujarat HC had stayed further construction and development activities by all units. 

Sources say that, at present, 30-32 units are operational at the SEZ and chances of exports growing from there are dim. Mails sent to the Adani Group remained unanswered.

Meanwhile, according to Vasishth, the next level of growth in exports from SEZs in Gujarat is set to come from GIFT City's IFSC, Dahej SEZ and Zydus SEZ, apart from a couple of new SEZs which are likely to be operational in a year or so.

"Exports from Dahej SEZ, GIFT and Zydus SEZ are set to grow in a big way for the next five years continuously. Reliance SEZ, which is the largest exporting SEZ in Gujarat, might also be back on track, given the rise in the price of petroleum products," said Vasishth.