Paul, who has served as Chancellor of Wolverhampton University since 1999, was conferred the "Wolverhampton's Famous Sons & Daughters" award by Wolverhampton Partners in Progress at an awards ceremony earlier this week.
"I am deeply honoured to receive this wonderful recognition from the Wolverhampton Partners in Progress and to join the distinguished ranks of Wolverhampton's famous sons and daughters," Paul said in a video message played at the ceremony.
"Though not from Wolverhampton by birth, I enjoy close links with this vibrant city, principally through my chancellorship of the university - a position I have held since 1999 - and through my association with industry in this area. Over the last 17 years, it has been a pleasure to see this city and the university go from strength to strength.
His award was collected on his behalf by the university's vice-chancellor, Geoff Layer, who spoke of the Caparo Group chairman's "enormous generosity".
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"The time that he gives to us and the city is phenomenal. Swraj is always opening doors, always helping us. He is so proud of his connections with Wolverhampton," Layer said.
Among the other winners this year included Lord Mervyn King, the former governor of the Bank of England, and former England cricketer Vikram Solanki, who played at junior and senior level for Wolverhampton Cricket Club and praised the "warmth, consideration and understanding" of its members.
Graham Evans, of Wolverhampton Partners in Progress and the driving force behind the awards, said they were launched to celebrate Wolverhampton and its people.