The Economy of Mumbai – India’s Commercial Capital
Mumbai, formerly known as Bombay, is the capital city of Maharashtra.
The Greater Mumbai area occupies a long, narrow peninsula in the Arabian Sea on the west coast of India. Mumbai City is an island of 69 square kilometers and also referred to as “Old Mumbai” or “South Mumbai”.
Mumbai is the most populous city in India and in the top five in the world. While the 2011 census estimated population at 12.4 million, external estimates suggest double that.
Major industries and economy
Mumbai is the financial center, economic powerhouse, and industrial hub of India. In 2018, a report by New World Wealth ranked the city as the 12th wealthiest global city with a total private wealth of US $950 billion.
According to Maharashtra state report, the metropolitan area of Mumbai accounts for INR 368 billion (US $5.2 billion) of the state’s gross domestic product (GDP), which is approximately 87 percent share in the state’s economy.
The city is one of the world’s top centers of commerce in terms of financial flow. It is also home to important financial institutions, such as the Reserve Bank of India, the Bombay Stock Exchange, the National Stock Exchange of India, and corporate headquarters of many Indian companies and multinational corporations.
Gems and Jewelry
Mumbai is the hub of India’s jewelry industry, receiving the majority of the country’s gold and rough diamond imports (two major jewelry segments in India). It is also the largest exporter of gems and jewelry, accounting for US$ 28.32 billion or 69 percent of the total export of gems and jewelry from India.
Although most diamond processing is undertaken in Surat, Bhavnagar, Ahmadabad and Bhuj (cities in the neighboring state of Gujuarat), Mumbai has a considerable number of semi-automatic factories and laser-cutting units. Most of these are located in the city’s special economic zone, which in itself accounts for 50 percent of India’s gem and jewelry exports.
In March 2019, Maharashtra’s chief minister announced the development of a INR 14,467 crore (US $2 billion) ultra-modern and high-tech gems and jewelry park. The 21-acre complex will be set-up at Navi Mumbai on the outskirt of Mumbai. It will have manufacturing units, residences for industrial workers, commercial areas, and commercial support services.
The gem and jewelry export promotion council expects the park to generate an annual turnover of INR 41,467 crore (US$5.8 billion).
Mumbai is the base of Bollywood, the Hindi language movie industry. The city has also become one of the most vibrant creative arts centre in India and plays host to a number of national and international events, including sports, related events, conferences and seminars.
The automobile sector has played a key role in the industrialization of Mumbai. Every segment of the automobile sector (including two and three wheelers, passenger cars and commercial vehicles) is represented in the city. Many big automobile companies have corporate branches in Mumbai, including the largest vehicle manufacturer in India, Tata Motors. The city’s key competitive advantages in the automobile and auto components industries are the presence of established manufacturers, a strong engineering sector and a large skilled labor base.
Some of the other major automobile centers near Mumbai include Pune, Nashik, Aurangabad and Nagpur.
Some of the leading institutions in Mumbai include the Bhabha Atomic Resarch Center, the Tata Institute of Fundamental Research, the National Chemical Laboratory, the National Center for Cell Science, the National Institute of Virology, the National AIDS Research Institute, and the National Environmental Engineering Research Institute.
Mumbai is connected by National Highway 3, National Highway 4, National Highway 8, National Highway 17 and National Highway 222. It is also linked with Pune by an extensive road network, including a six-lane Mumbai-Pune Expressway. The Bandra-Worli Sea Link Bridge, together with Mahim Causeway, links this island city to the western suburbs.
Mumbai is the headquarters of two Indian Railway zones: the Central Railway and the Western Railway. The city’s transport consist of three separate railway networks: the Central, Western and Harbor Line. Mumbai also has a metro rail – a rapid transit system, that is being built in three phases over a 15-year period. Out of the planned eight high-capacity metro lines, spanning a total of 146 miles, one line is currently operational. Besides, the city boasts India’s first monorail system that opened its phase 1 in July, 2014.
Juhu Aerodrom was India’s first airport, yet now only functions as a heliport and hosts a flying club. The main aviation hub in Mumbai is the Chhatrapati Shivaji International Airport. An additional airport at Navi Mumbai has been proposed but further progress has been delayed due to land acquisition challenges.
Mumbai Port Trust and Jawaharlal Nehru Port Trust are the two major ports that together provide the largest port facilities in India. They handle more than a third of the country’s total foreign trade. During 2017-2018, the Mumbai Port Trust handled a record high level of cargo, amounting to 63.05 million metric tones, a 3.17 percent increase from the previous year.
Mumbai Port, a natural harbor, has extensive wet and dry dock accommodation facilities, and it is also an important base for the Indian Navy.
State-owned Mahanagar Telephone Nigam Limited (MTNL) is the largest telephone service provider in Mumbai. Cell phone coverage is extensive, and both GSM and CDMA services are available in the city. Other major service providers include Vodafone, Airtel, Loop Mobile, and Reliance Communication.
Editor’s Note: This article was first published in 2013 and is updated on March 5, 2019 to accommodate latest developments.