City Spotlight: Investing in India’s Jaipur

Posted by Reading Time: 7 minutes

By Melissa Cyrill

Jaipur is the capital and largest city of the North Indian state of Rajasthan. Known as the ‘Pink City’, Jaipur completes the ‘Golden Triangle’ tourist circuit along with India’s capital New Delhi (100 square miles) and Agra in Uttar Pradesh state (90 square miles).

The administrative district of Jaipur has a total geographical area of 5,432 square miles, which is 3.23 percent of the total area of Rajasthan. The 2011 Indian Census put its population at 3.1 million, making Jaipur the tenth most populous city in the country. The Jaipur Municipal Corporation is responsible for the city’s administration and is headed by a mayor, while the Jaipur Development Authority (JDA) is the nodal government agency responsible for the planning and development of Jaipur.

Climate wise, Jaipur is hot and semi-arid, with rainfall mostly in the monsoon months between June and September. Temperatures are relatively high during the summer months from April to early July, with average daily temperatures of around 86° F (30° C), while winter is mild and pleasant, with average temperatures ranging from 50° to 59° F (10° to 15° C) from November to February.

The city also has a number of higher educational institutions, which feed into an increasingly skilled workforce. Major institutions include the National Institute of Agricultural Management, University of Rajasthan, Indian Institute of Health Management Research, Malviya National Institute of Technology, Jaipur National University, Manipal University, and IIS University.

In terms of transport and logistics, Jaipur is extremely well-connected by road, rail, and air. It has an international airport and is the headquarters of the North Western Zone of the Indian Railways. Jaipur’s strategic location also puts it on the golden quadrilateral of the National Highway Development Project (NHDP), which connects the major industrial, agricultural, and cultural centers of Chennai, Kolkata, Delhi, and Mumbai.

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Economic Profile

Jaipur has a bright economic profile that is increasingly getting diversified. The sectoral distribution of workers is mainly divided between manufacturing (44.64 percent) and services (49.46). Its major industries cover a wide-range of sectors – tourism, luxury textiles and ready-made garments, gems and jewelry, hand-knotted rugs, rubber-based prosthetics, food and beverages, tobacco, mining and minerals production, automobiles and bicycles manufacturing, and machinery and machine tools. Consequently, Jaipur has an important micro, small, and medium enterprises cluster. More recently, the city has also become an important IT hub in the country.

Further, aside from being a premier tourism destination in India, Jaipur is also known for its arts and crafts and has a flourishing trade and commerce in antiques, jewelry, handicrafts, gems, bangles, pottery, carpets, textiles, leather, and metal products.

Given this diverse economic profile, all three major industrial lobbies, the Federation of Indian Chambers of Commerce & Industry (FICCI), the PHD Chamber of Commerce and Industry (PHDCCI), and the Confederation of Indian Industry (CII) have their regional offices in Jaipur. The city is also home to the Jaipur Stock Exchange, one of India’s regional stock exchanges, which was founded in 1989.

Leading Industries

There are six major industrial areas in the city namely Vishwakarma Industries Association (VKIA), Jhotwara, Kanakpura, and Bindayaka in the northwest; Sitapura and Sanganer industrial areas in the south of the city; and Malviya industrial area in the southeast. The unorganized industry is mainly concentrated in the Sanganer town and surroundings. A number of household industries are also present in Jaipur, mostly in the ‘walled city’ and are engaged in works such as stone cutting and polishing, blue pottery, lac work, gota sculptures etc.

The key industries in the Jaipur district are mentioned below.

Manufacturing: The growth of the manufacturing Industry is fundamental to the city’s flourishing economy. The State government promotes industrial development in Jaipur through two organizations – the Bureau of Industrial Promotion and the Rajasthan Financial Corporation. The main industrial products manufactured here are ball bearings, ceramics, pottery dyeing and printing, electronic items, engraving on brass items, ferrous and non-ferrous castings, gems and jewelry, electrical appliances, marble statues, marble tiles and slabs, PVC units, and food products, among others. The main export items are brass and lacquer work, enamel work, gems and jewelry, granite tiles, handloom, marble statues, printed cloth and textiles, ready-made garments, and woolen carpets, ball bearings, electronic energy meters, paper, cement, transmission lines and towers, synthetic and organic colors, and hot rolled steel and cold rolled strips. These are produced by both the organized and unorganized industrial areas, and the Rajasthan government has reserved one-third of its developed industrial area for small and medium enterprises to give a boost to the sector. There are 12 types of small scale industry clusters in Jaipur such as agriculture implements, blue pottery, hand block printing, handloom, marble sculpture, and painting running in 38 villages.

Tourism: Jaipur has flourishing hospitality (tour operators, restaurants and bars, guest houses and hotels) and retail sectors, primarily due to its famous cultural and natural heritage. The city boasts of a rich preserve of historical architecture as well as the intangible heritage of its artifacts, handicrafts, folklore, music, and literature. These collectively offer unique experiences that consistently attract a large tourist footfall of about 40 million each year, both foreign and domestic. Almost 60 percent of the international tourists to India visit Delhi, Jaipur, and Agra, which is why they are called the ‘golden triangle’. Jaipur also acts as a gateway to other major tourist destinations in Rajasthan such as Udaipur, Jodhpur, Bikaner, and Jaisalmer.

Some of the major tourist attractions in the Walled City of Jaipur are City Palace, Maharaja Sawai Man Singh (II) Museum, Hawa Mahal, Jantar Mantar, and the Bazaars. Tourist sites outside the Walled City include forts (Amber, Jaigarh, Nahargarh, Moti Doongri), palaces (Jal Mahal, Rambagh), sacred shrines (Ganesh Mandir, Birla Mandir, Jagat Shrimon Temple, Shila Mata Temple, and Galtaji), parks and gardens (Ghat ki Ghuni, Kanak Vrindavan, and Ram Niwas Garden), and the Albert Hall Museum.

IT: In 2008, Jaipur was ranked 31 among the 50 Emerging Global Outsourcing cities. MNCs such as the Deutsche Bank Group, Genpact, Infosys Ltd, Metlife, Nucleus Software, EXL, Systweak Software, and The Phone Support, among others have established their offices, BPOs and software development centers here. IT/ITeS companies in Jaipur are mostly located in the Mahindra World City. Spread over 750 acres, it is one of the largest IT Special Economic Zones (SEZ) in India. Mahindra World City is a joint venture of the Rajasthan State Industrial Development & Investment Corporation Limited (RIICO) and the Mahindra group, and will likely become the largest job provider for Jaipur once fully developed.

Minerals: Rajasthan is known for its mineral production, having 79 varieties of minerals and in significant deposits. The State exports several minerals in raw form as well as after value addition. A variety of mineral deposits are found in the district of Jaipur such as China clay, copper, dolomite, iron, limestone, silica sand, soap stone, feldspar, quartz, mica, pyroplite and some other minor minerals, all of which contribute substantially to the State revenue.

The heaviest mineral concentration is in seven villages in the district of Jaipur, namely, Baskhoh, Shyampura, Lalgarh, Marwa, Nimodiya, Sankotra, and Adarwa. In addition, there are 70 villages where minerals are found.

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Future Smart City

In last year’s Ernst&Young India Attractiveness Survey, Jaipur emerged as second among the preferred destination among investors who are not yet established in India. In January 2016, Jaipur was chosen in the first round of cities selected for development under the Smart Cities Mission. Jaipur already has a good reputation globally with its thriving industrial and tourism sectors, and was recently labelled the first “Lighthouse City of South Asia”. The Lighthouse City initiative is in partnership with CISCO and places Jaipur in an elite club of other cities such as Hamburg, Barcelona, and Adelaide. CISCO will establish IT-enabled services, Wi-Fi hotspots, video surveillance, interactive kiosks, remote e-governance solutions, and parking management systems in Jaipur city. Further, CISCO will collaborate with other technology leaders such as Qualcomm Technologies Inc., General Electrical, and 3M India Ltd to launch an Innovation Center in Jaipur.

The Rajasthan Enterprises Single Window Enabling and Clearance Act, 2011 enables a single point digital interface, reducing the time and effort involved in seeking clearances and approvals investors submitted by investors. The State has a network of investment incentives include subsidies, power concessions, land and building tax exemption, and special land package for IT industries.

Observations: India’s FDI landscape is rapidly evolving, with growth rates in Tier II cities like Jaipur, exceeding that of major cities like Mumbai and Kolkata. In recent years, Jaipur has become a highly attractive investment destination owing to business friendly policies, especially in the IT-enabled services and telecom sectors, its proximity to Delhi, and well-established industrial and service sectors. Having also qualified as a future smart city, Jaipur’s investment outlook continues to be upbeat.

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