Understanding India's Regional Economies

This is a very good one.

India's 26 regional states and 29 major cities form distinct units that are the most relevant targets for competitive advantage.

Regional differences in infrastructure have become critical determinants for outside investors, since the poor infrastructure in some regions forces concessions in distribution choices. Companies cannot build the necessary supporting network of bridges and roads to carry goods, nor can they supply enough power plants.

As India continues to grow in both scale and complexity, new and distinct regional economies will emerge across a broad range of industries. While a great deal of attention has focused on India's Silicon Valley in Bangalore, other important industry groupings also exist, like the base of auto-ancillary services in the Delhi region, the mining and minerals companies in Orissa, and the high-growth textiles industry in Gujarat.

This grouping of specific industries in certain areas will continue as foreign companies gain a greater appreciation of the variations in infrastructure and resources, and state and local authorities undertake programs to attract them.

Noida, a special economic zone in Northern Delhi—with favorable power and communications supply, low-cost office space, and tax breaks for start-up operations—has attracted a long list of major multinational investors. Competition for foreign investment will increase as the different states recognize the need.

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