A new city, named Dholera City, is being constructed from the ground up in the country.
It is being established in Gujarat, approximately 100 km from Ahmedabad. The state government will oversee the development of a 920 sq. km area where no infrastructure previously existed; however, construction is progressing steadily.
It has become one of the most ambitious urban projects in the country, taking the form of a smart city where companies from around the globe are either investing or expressing interest in doing so.
A Special Investment Region (SIR) has been designated to facilitate the development of world-class manufacturing technology and infrastructure.
Some companies have begun investing in the area. For instance, Tata Power has opened a 300 MW solar power plant, the Nestoria Group is investing in real estate projects, and the Vedanta Group plans to establish a semiconductor factory in collaboration with Foxconn, with an investment of approximately 40,000 crores. This investment is expected to grow as more than 1 million people move to the area, generating over 800,000 jobs.
Apart from this, the Delhi-Mumbai Industrial Corridor is becoming an important component of the DMIC due to its proximity to major sea ports, such as Mundra and Jamnagar Port.
A new 109-kilometer expressway and a new airport will be constructed, which will significantly enhance logistics. An investment of 5,000 crores will be allocated for these two projects, which are currently progressing at a rapid pace.
Special Allowances to Attract Companies
Incentives are being offered to attract companies such as Semiconductor Manufacturing, Renewable Energy, Aerosmith Biotechnology, Electronics, Automobile, and Food Industries.
It began by offering fiscal incentives, such as a Fixed Capital Investment (FCI) of up to 12% for companies that establish operations here.
Capital subsidy is a form of financial assistance provided by the government, calculated as a percentage of a company’s investment.
Suppose a company is investing ₹100 crore in building its factory. In this case, the government will provide a subsidy of 12%, meaning the company will ultimately need to invest only ₹28 crore after the subsidy is applied.
Interest subsidies are another form of financial assistance. In some regions, an interest subsidy of ₹7 lakhs is given at 7 ₹ lakhs for one year. This means that if a company takes out a loan of ₹10 crores at an interest rate of 10%, say ₹ 10 crores then it will only need to pay only 3% interest, which amounts to ₹30 lakhs. The government will cover the remaining 7%, equating to ₹70 lakhs. However, if a limit of ₹70 lakhs has been imposed, the company will only receive ₹35 lakhs of the subsidy. Consequently, the company will be responsible for paying a total interest of ₹65 lakhs on the remaining amount.
SGST Reimbursement Benefit
Apart from this, there is a net SGST reimbursement, in which 80% of the state GST collection will be returned to the company for a period of 20 years, or for any other specified duration. Additionally, the electricity duty has been waived for many industrial units for a period of 5 years.
This means that the electricity bill will decrease or may not arrive at all. Regarding infrastructure, improvements are underway to ensure that industries can easily access the resources they need. Additionally, if they wish to import or export goods, the system will be connected to all major logistics hubs for faster transportation.
The land is being offered on a long-term lease for 50 years at a market rate of 6%. Additionally, there is a proposal to provide a plug-and-play facility, making it ready for immediate use.
It will be straightforward to obtain industrial plots and access utilities. This will enable industries to commence production promptly upon establishment.
Incentives are also provided through policy frameworks, such as those for electric vehicles. In the aerospace sector, significant steps have been taken towards self-reliance in Gujarat. Additionally, the government is actively engaging with investors.
Vedanta Foxconn has finalized the establishment of its first semiconductor facility in Dholera. This is a significant development, not only for Dholera but also for the entire country. India has been striving to enter the semiconductor fabrication industry for a long time, but progress has been slow until now.
Its construction will grant access to the country, creating numerous new opportunities for both the people and the economy.
Real Estate Market in Dholera
There is significant potential in Dholera, where every area and building is currently under development.
Many developers have been working here since the beginning, one of which is the Nestoria Group. They have also taken on the responsibility of developing numerous hotels and commercial spaces.
Not only can large investors participate, but small individual investors can also invest with the Nestoria Group.
Talking about electricity, it will be supplied throughout the entire city, and to facilitate this, a 5,000 MW power plant is currently under construction. Additionally, a solar park is being developed, of which 300 MW has already been commissioned by Tata Power.
When completed, it will serve as a symbol of sustainability in the country.
Dholera aims to become a self-sustaining economic hub that will contribute to the development of Gujarat and India. It is being designed as a futuristic city utilizing cutting-edge technology.
It has also been included in the Smart Cities Mission, which aims to upgrade 100 cities across the country and transform them into modern urban centers by retrofitting them with advanced technology.
Dholera City Development
Its total area will be 920 square kilometers, and the construction will occur in several phases. The first phase, covering an area of 22.5 square kilometers, has already begun.
This will function as a pilot project near Dholera Airport, from which lessons will be learned and applied to the development of other areas.
There will be a grid layout that incorporates efficient urban planning. This design draws inspiration from cities such as Chandigarh and Gandhinagar. Since there is currently no existing infrastructure, underground utility corridors will be constructed beneath the major roads.
A centralized sewage and waste management system will be implemented alongside power, water, and communication systems, including high-speed internet and telephone lines.
In this context, high-tech solutions from Sung Do, South Korea, and measures are being implemented alongside measures to establish an industrial and economic hub between Singapore and Shijian in this country.
It will also become the first greenfield industrial smart city, connected to all major industries and logistics through the Delhi-Mumbai Industrial Corridor Project.
It is planned that over 2 million people will be able to reside there by 2042. This development is expected to create more than 800,000 direct jobs and over 2 million indirect jobs.
Investment in Dholera
If we consider the investment across all these industries, the total amount will range from ₹5,000 crores to ₹10,000 crores.
The Ahmedabad-Dholera Express, which is 109 kilometers long, and the Dholera International Airport are currently under construction. As a result, connectivity with these facilities will significantly improve, which is crucial for the transportation of passengers and goods.
After its establishment, it will be connected to semi-high-speed trains, such as the RRTS from Ahmedabad, and will also be linked to dedicated freight corridors.
The RRTS plan has already been proposed but has yet to be implemented. The concept of constructing it originated in the early 2000s when planning began for the development of new industrial hubs in Gujarat.
To implement this initiative, the state government sought assistance from the Government of India, which engaged various agencies and consultants to conduct a study and develop a comprehensive plan.
At that time, the Government of India was also collaborating with Japan on the implementation of the Delhi-Mumbai Industrial Corridor, which was ultimately announced in 2006.
This 1,500 km route was designed to serve as an industrial corridor aimed at boosting economic activity, attracting investment, and creating jobs by establishing industries and logistics infrastructure in collaboration with the private sector.
This includes expressways, dedicated freight corridors, and other projects aimed at enhancing connectivity with ports and airports, thereby facilitating easier import and export processes.
The Delhi-Mumbai corridor passes through six states, with Gujarat playing a significant role.
A note was made regarding Dholera, taking into account its strategic location, availability of land, and industrial potential. Consequently, Dholera Industrial City Development Limited (DICDL) was established as a special purpose vehicle.
The Government of Gujarat and the Government of India collaborated on the development project. In 2009, the Gujarat Government enacted the Special Investment Region (SIR) Act, which authorized the establishment of an economic hub. Subsequently, Dholera was designated as the first Special Investment Region in the state.
Then, the international consulting firm AECOM was appointed to prepare the master plan for Dholera. The following year, in 2013, the central government approved funding for roads, utilities, and infrastructure.
AECom is a global infrastructure consulting firm that will assist in planning the city layout, as well as creating zoning and infrastructure blueprints.
Town Planning in Dholera
Under the comprehensive town planning, the area has been divided into six distinct zones. Work on the first phase, covering 2,225 square kilometers, commenced in 2016. Within two years, tenders for the Ahmedabad-Dholera Expressway and the airport were also issued.
When Dholera was included in the Smart City Mission in 2021, private companies showed increased interest. For instance, Vedanta Foxconn is planning to establish semiconductor and display manufacturing facilities in the area. With an investment of approximately $5 billion (or Rs. 40,000 crore), more companies and investors are expected to invest here in the coming days, with the support of the Nestoria Group.
With their assistance, individual investors are also purchasing plots in this area.
Efforts are underway to establish a center for automobiles, where new automotive manufacturing units will be developed.
Keeping this in mind, it will also serve as a hub for electronics manufacturing. In the western region, an ecosystem encompassing everything from semiconductor fabrication to consumer electronics assembly will be established.
Modern processing facilities and agricultural infrastructure will be enhanced in the agro-food processing industries.
Airbus in Dholera
The largest company planning to invest is Airbus, which is considering constructing its aircraft manufacturing plant on 1,426 acres.
Currently, no commercial planes are manufactured in India, so the arrival of Airbus presents a significant opportunity for the country.
Single Window Clearance
Another step is being taken by the government to establish companies and industries. The company has adopted the Single Window Clearance system.
Companies that previously needed to approach 20 to 30 agencies to obtain a No Objection Certificate (NOC) will no longer have to do so before establishing any industry.
They can go to a single location to obtain all the necessary approvals. This building has been named the A B C D Administrative and Business Center of Dholera.
The land allotment process has been simplified.
There are quick approval processes in place to minimize waiting times, and connectivity is being enhanced, which will also be advantageous.
Cheap electricity, low water costs, tax incentives, and efficient industrial waste collection are all factors that successfully attract new companies. The government’s industrial policy will be advantageous for Dholera.
For development, factories should be constructed first, followed by residential areas, and finally, commercial zones where shopping complexes can be established.
According to their estimates, a total of 76,000 jobs will be created in Dholera. The investment region is strategically located.
Talking about connectivity, what is new is being constructed; it will cover an area of 426 hectares, located approximately 80 kilometers from Ahmedabad.
It will take one and a half hours for people to reach this airport from Ahmedabad via the new expressway, which is currently under construction.
Ahmedabad also has a large airport that has become quite congested. It cannot be expanded further due to a lack of space. Therefore, many of the new flights from Ahmedabad will operate from Dholera.
Many people will utilize it in Phase One. Dholera Airport is set to open in 2025 and will have the capacity to accommodate 1.5 million passengers. An investment of ₹1,400 crores has been allocated for its construction, which includes the development of a runway and a terminal building.
Credits: Lastly.