Eastern India's largest auto cluster seeks to emerge from Tata shadow

On the banks of Kharkai river, Adityapur, once boasting India’s largest industrial area, now finds itself wrestling with the Herculean task of emerging from the towering shadow of the Tata group. This corner of Jamshedpur is in search of a new identity.

Off the beaten path, down a dusty and broken street, lies Khetan Udyog, which represents the area’s both industrial past and potential future. This unassuming establishment, tucked away in Phase 2 of the industrial area, is the base of operations for Santosh Khetan, the director of Adityapur Auto Cluster, the first of its kind and the largest in Eastern India.
 

Khetan, owner of Khetan Udyog, believes in the untapped potential of local businesses to manufacture auto parts and more. But the automotive industry in the region is dominated by a single behemoth — Tata Motors. “In the Adityapur Industrial Hub, approximately 1,500 industries exist, with 85 per cent of them engaged in auto parts manufacturing. We need another automobile giant and we have written to the government about it. Tata Motors, the region’s major employer, experiences a recession every two to three years, leading to layoffs and highlighting the need for another major player in the automobile industry,” he argues.
 

Jamshedpur has 600-700 ancillary units in its industrial areas that solely depend on Tata Motors and Tata Steel, Khetan says.

Manufacturers in Adityapur assert their capacity to manufacture railway parts, but lament that railway manufacturing has not been allocated to Jharkhand. “We had written to the PM earlier but nothing materialised,” Khetan said.
 

As the Lok Sabha polling approaches (Jamshedpur votes on May 25), welfare appears to be on everyone’s mind, but there are issues that are more important to businesses in the city.

 

Abhishek Agarwal, vice-president of the Singhbhum Chamber of Commerce and Industry (SCCI), who also owns a sweet shop at Sakchi in the heart of the city, believes the elections this time are not about local issues, but “nation-building”. The pressing issue, he says, is the government’s staggered allotment of land for industries, forcing industrialists to look elsewhere.

“We need a dedicated land bank for small and medium business owners too,” Agarwal insists. “Land here is given at Rs 1,400 per square ft, which is much more expensive than other states. The government should establish a land bank so that small businessmen do not have to compete in bidding.”
 

 Sandeep Murarka, a former member of SCCI, chimes in on the issue of untimely disbursement of capital subsidies. “The biggest problem is the government's apathy towards people who come to set up industries. Subsidies are not given on time,” he said.
 

Power rates pose a significant challenge, too. “We have Tata Power, Jharkhand Bijli Vitran Nigam Limited, and state-run power utility Damodar Valley Corporation (DVC), which operates in parts of West Bengal and Jharkhand. Power from DVC is not available in Jamshedpur but is available in Ramgarh (another town in Jharkhand). DVC charges Rs 3.50 per unit to industries; we pay Rs 5.50 per unit to Tata. For power via JBNL, we pay Rs 6.50 per unit. Electricity is essential to steel industries, but power rates are high. So why would such industries come here?" he asks.
 

Taking a moment, he asks again, “Forget about other industries, why has Tata itself not opened any new factories here?”

The Jamshedpur Lok Sabha constituency, one of the 14 Lok Sabha constituencies in Jharkhand, is seeing a battle between two-time BJP MP Bidyut Baran Mahato and the JMM’s Samir Kumar Mohanty. 

In the Lok Sabha elections of 2019, Mahato emerged victorious by a margin of 302,090 votes.