Rajasthan – Business Opportunities & Market Entry

Rajasthan, the largest state in India, offers a diverse range of business opportunities across various sectors. With leading positions in agricultural production, mineral resources, and renewable energy, the state presents a favourable environment for investment and growth. Its strategic location and well-developed transportation network enable businesses to access a significant portion of India's market. Additionally, Rajasthan's population, literacy rate, and abundant natural resources further contribute to its potential as an attractive investment destination.

Top Industries

• Renewable Energy: Rajasthan stands as a formidable force in driving India's ambitious Renewable Energy target of 450 GW by 2030. With an impressive installed solar generation capacity of over 8,000 MW, the state leads the nation's renewable energy efforts. It ranks among the top five states in India for installed wind generation capacity as well, further bolstering its position in the renewable energy sector. The state's geographical advantages make it an ideal location for solar power generation. Rajasthan receives the highest solar radiation in the country, boasting an average of 5.72 KWh/m2/day. Additionally, it enjoys more than 325 clear sunny days every year, making it a region with optimal solar energy potential. The abundance of vast, flat land available at competitive rates makes it even more suitable for establishing solar generation units. A remarkable testament to Rajasthan's commitment to renewable energy is the world's largest fully operational Solar Park, the 2245 MW Bhadla Solar Park in Jodhpur, sprawling over an expansive 5,783 hectares. This solar park serves as a shining example of the state's pioneering efforts in the green energy revolution. Notably, several key districts within Rajasthan, such as Barmer, Bikaner, Jaisalmer, and Jodhpur, are blessed with the best solar radiation levels, making them particularly favourable for solar power projects. Moreover, the state possesses two crucial resources vital to solar power production: abundant solar radiation and large tracts of government-owned lands available at competitive rates, providing ample opportunities for renewable energy projects. As of January 31, 2023, Rajasthan leads the country with an impressive installed solar generation capacity of over 16,000 MW, firmly establishing itself as the driving force in India's renewable energy sector. The state's significant contribution to renewable energy and its status as a top performer in both solar and wind capacity make it a prime destination for investments and a role model for other regions in their pursuit of sustainable energy solutions.
  
  
• Agriculture and Food Processing: Rajasthan's agricultural and allied sectors have made significant contributions to the state's GDP, accounting for close to 29% in the fiscal year 2022-23. To promote agro and food processing industries, RICO (Rajasthan Industrial Corporation) has established four Agro Food Parks in strategic locations - Boranada (Jodhpur), Kota, Alwar, and Sriganganagar. Additionally, Ajmer hosts a Mega Food Park, boosting the state's food processing capabilities. The state boasts a substantial share of the country's livestock, approximately 10.58%. In terms of dairy and wool production, Rajasthan has been a major player, contributing 14.63% of the nation's milk and 42.45% of wool in the year 2020-21. Rajasthan has earned several prestigious titles in agricultural production. It holds the first position in India for the production of mustard, medicinal and aromatic crops. The state is also a leader in the production of moth beans, nutri cereals, garlic, mustard, bajra, guar gum, coriander, and Isabgol, earning it the top rank in the country. Furthermore, it holds the second position in oilseeds, cumin, and pulses production. Moreover, Rajasthan has gained recognition as the largest milk-producing state in India, solidifying its position in the agro and food processing industries. The state's diverse agricultural output, horticulture, and animal products offer tremendous potential for processing and value addition, opening up various business opportunities in the sector. Overall, Rajasthan's strengths in agriculture, animal husbandry, and food processing, coupled with its strategic location and vast resources, present a favourable environment for entrepreneurs and investors to explore and capitalize on the growing agro and food processing market in the state. The establishment of agro food parks and the state's reputation as a leading producer further enhance its appeal for businesses seeking to tap into this dynamic and thriving sector.
  
  
• Textile and Garment: Rajasthan holds a prominent position in India's textile industry and is known as the country's largest producer of various textile products. The state's specialization includes being the top producer of polyester viscose yarn, polyester viscose suiting, synthetic suiting material, and wool. Bhilwara is renowned as a textile centre in India, and it is accompanied by other well-developed textile and apparel hubs in Jaipur, Pali, and Balotra. These regions have emerged as key players in the textile sector, contributing significantly to the state's economic growth. Rajasthan's significance in the textile market extends beyond modern textiles to traditional and ethnic textiles. The state is a significant producer and exporter of traditional textiles like Bandhani, Leheriya, and Kota Doria, which are highly sought after both domestically and internationally. In FY 2019-20, the textile and apparel exports from Rajasthan amounted to INR 61.65 billion, highlighting its global competitiveness in this sector. To support and boost the textile industry further, RIICO (Rajasthan State Industrial Development and Investment Corporation) has established Textile Parks in strategic locations like Ajmer, Kishangarh, Pali, and Jaipur, providing excellent infrastructure to manufacturers in the sector. Additionally, there are plans for a Mega Integrated Textile Park at Kakani in Jodhpur, aiming to further enhance the state's textile manufacturing capabilities. The textile sector in Rajasthan is diverse, with a leading position in the production of wool and blended fabrics. The state's strong presence in producing polyester viscose yarn and synthetic suiting materials further solidifies its stature in the textile market. Rajasthan's unique combination of modern textile manufacturing capabilities and traditional craftsmanship makes it a treasure trove for textile enthusiasts and businesses alike. The presence of famous textiles like Bandhani, Leheriya, and Kota Doriya adds to the state's cultural heritage and commercial appeal. With textile and apparel hubs, established Textile Parks, and the proposal for a Mega Integrated Textile Park, Rajasthan continues to be a significant player in the Indian textile industry and presents a wealth of opportunities for growth and investment in this thriving sector.
  
  
• Automotive and Electric Vehicles: Rajasthan has emerged as a significant player in the automotive industry, hosting more than 100 automotive and auto-component manufacturing units. The Bhiwadi-Neemrana region in Alwar district, a substantial portion of which falls within the National Capital Region (NCR), has become a focal point for automotive manufacturing due to its strategic advantages in market access and logistics infrastructure. This region has fostered a vibrant ecosystem for the automotive and ancillary industries, attracting major players such as Hero Motors, Honda Cars, Honda Two-wheelers, and Ashok Leyland. Their presence has further bolstered the state's reputation as an automotive hub. The development of the Greater Bhiwadi Industrial Township and the planned greenfield international airport and aerotropolis near Bhiwadi, in alignment with the ambitious Delhi-Mumbai Industrial Corridor, signifies the state's commitment to becoming one of India's most important auto and industrial hubs. These infrastructural projects are expected to provide a significant boost to the automotive sector in the region. The automotive industry in Rajasthan is poised to leverage its strategic location and capitalize on the growing demand for electric vehicles (EVs). Being part of the NCR, the region benefits from its proximity to major markets and access to a skilled workforce. As the automotive industry shifts towards sustainable and eco-friendly solutions, Rajasthan's automotive hub is well-positioned to become a hot spot for EV production and related technologies. Overall, Rajasthan's transformation into a thriving automotive hub is a result of its strategic investments in infrastructure, favourable business environment, and the presence of key players in the industry. The state's commitment to sustainable development and its strategic location within the NCR make it an attractive destination for automotive manufacturers and suppliers looking to capitalize on the evolving automotive landscape in India.
  
  
• Tourism and Hospitality: Rajasthan has earned its reputation as one of the world's most sought-after tourist destinations, drawing millions of visitors from around the globe each year. The state's allure lies in its rich heritage, diverse attractions, and unique offerings, making it an enticing prospect for investments in the tourism sector. The region boasts six majestic forts listed as UNESCO World Heritage Monuments, located in Chittorgarh, Kumbhalgarh, Sawai Madhopur, Jhalawar, Jaipur, and Jaisalmer. These historical landmarks add to Rajasthan's charm and allure tourists seeking a glimpse into the region's regal past. Rajasthan's popularity among international tourists is reflected in its rank as the sixth most visited state in India in terms of foreign tourist arrivals. The iconic Palace on Wheels, a luxury train journey through the state, was recognized as the second-best luxury train in 2020, further enhancing Rajasthan's appeal as a premium tourist destination. The state offers a diverse range of tourism products, including heritage sites, serene lakes, wildlife sanctuaries, vibrant fairs, and festivals, as well as various traditional dance and art forms. Additionally, Rajasthan is known for its luxurious royal trains, providing a unique and unparalleled experience for travellers. In 2020, Ranthambore was bestowed with the title of the Best Wildlife Destination in India, while Jaipur earned recognition as the Best Heritage Destination. The state was also acknowledged as the Best Wedding Destination in the same year. Furthermore, both Jaipur and Udaipur were listed among the 20 best cities in the world in 2021, highlighting their global appeal. With over 22 million tourists, including foreign visitors, flocking to Rajasthan in 2021, the state presents promising avenues for investment in the tourism sector. Opportunities for investment include hotels and resorts, desert tourism offering camping sites and activities, conversion of heritage properties into hospitality units, wildlife and eco-tourism experiences, rural tourism experiences, wellness and medical tourism, MICE (Meetings, Incentives, Conferences, and Exhibitions) tourism, amusement/theme parks, and adventure tourism experiences. Rajasthan's captivating blend of heritage, culture, nature, and luxury makes it an irresistible destination for tourists, promising substantial returns on investment in the tourism industry. The state's commitment to preserving its cultural heritage while embracing modern offerings ensures a memorable and unique experience for every visitor, making it a prime location for investors seeking to capitalize on the thriving tourism market in Rajasthan.
  
  
• IT and ITES: Rajasthan takes pride in its abundant and skilled workforce, bolstered by a vast pool of English-speaking talent. The state is actively fostering an environment conducive to technological advancements, evident in its plans for an integrated FinTech Park spanning 37 hectares in Jaipur. Additionally, Jaipur is home to North India's largest Special Economic Zone (SEZ), the Mahindra World City, which provides excellent infrastructure and opportunities for IT companies. Moreover, Rajasthan has established four IT Parks in key cities like Jodhpur, Kota, Jaipur, and Udaipur, further bolstering its position in the technology sector. With well-developed cities offering cost-effective solutions and a large English-speaking talent pool, Rajasthan is uniquely positioned to attract investments in the upcoming wave of Web 3.0 and Deep Tech-driven economy. The state's favorable business ecosystem is poised to welcome ventures in various cutting-edge technology fields, including:
  
  a.    Cyber Security: With the ever-increasing digitalization, the demand for robust cybersecurity solutions is on the rise. Rajasthan's skilled workforce and supportive infrastructure present lucrative opportunities for investments in this critical sector.
  b.    Blockchain Applications: The state's commitment to technological advancements opens doors for investments in blockchain applications across various industries, offering decentralized and secure solutions.
  c.    FinTech: The planned FinTech Park in Jaipur, coupled with the state's pro-business environment, makes Rajasthan an attractive destination for FinTech investments, revolutionizing the financial services sector.
  d.    Big Data: Rajasthan's thriving IT infrastructure and availability of skilled professionals make it an ideal location for companies looking to capitalize on the potential of big data analytics.
  e.    Cloud Computing: The state's investment in IT Parks and infrastructure provides a solid foundation for businesses seeking to leverage cloud computing technologies.
  f.    Quantum Computing: As quantum computing emerges as the next frontier in computing technology, Rajasthan's forward-looking approach and skilled talent pool can cater to the needs of this specialized domain.
  g.    AI and ML: Rajasthan's vast talent pool and supportive environment create a fertile ground for investments in Artificial Intelligence (AI) and Machine Learning (ML) technologies, powering the growth of various industries.

• Electronics System Design and Manufacturing: India's consumer electronics market stands as one of the largest globally, and the country is the second-largest mobile phone manufacturer in the world. With the Indian electronics market estimated to reach USD 400 billion by 2025, it presents a lucrative opportunity for domestic and trans-national manufacturers. In this thriving landscape, Rajasthan emerges as a natural choice, offering numerous advantages to players in the Electronics System Design and Manufacturing (ESDM) sector. Rajasthan is a leader in the production of essential resources like Silver, Silica, and Copper, providing ready access to crucial raw materials for electronic manufacturing. The state already has a solid foundation in the electronics and computer software exports, amounting to INR 27.29 billion. This existing industry base fosters an environment conducive to the growth of the electronics sector in the state. Rajasthan boasts a vast pool of trained manpower, with 116 Engineering Colleges and over 1600 ITIs, ensuring a skilled workforce for electronics manufacturing companies. The Bhiwadi region, located in the National Capital Region (NCR), is rapidly developing as a major ESDM hub. Additionally, the cities of Jaipur, Bhiwadi, Neemrana, Udaipur, Ajmer, and Kota are emerging as the next brownfield electronic manufacturing clusters, indicating the state's growing importance in the sector. The Mahindra World City in Jaipur offers excellent infrastructure and world-class facilities, making it an attractive location for ESDM companies. The state has planned Electronics Manufacturing Clusters (EMCs) in Karoli, covering an area of 120 acres, and in Salarpur, further strengthening Rajasthan's position as an ESDM hub. With its leadership in the production of silver, silica, and copper, the availability of key inputs is readily assured in Rajasthan. The emerging electronics manufacturing clusters, backed by a skilled workforce and strong industry foundation, add to the state's appeal as a prime destination for investments in the ESDM sector. Moreover, the planned EMCs offer dedicated spaces for electronics manufacturing, further encouraging industry players to set up operations in Rajasthan. Overall, Rajasthan's proactive approach and conducive business environment position it as a frontrunner in the booming ESDM industry. The state's strategic advantages and potential for growth make it an attractive choice for domestic and international manufacturers seeking to capitalize on India's growing consumer electronics market and establish a strong foothold in this dynamic sector.

RAJASTHAN INVESTMENT PROMOTION SCHEME 2022

Rajasthan is rapidly emerging as an investment powerhouse, evident from the substantial number of Memoranda of Understanding (MoU) and Letters of Intent (LoI) signed during recent investment drives, totaling more than 4,000. The state's new Rajasthan Investment Promotion Scheme 2022 is designed to enhance its position as a preferred investment destination, offering competitive incentives and greater flexibility for investors. The appeal of Rajasthan as an investment destination is rooted in its abundant resources, including minerals, land, energy, and skilled manpower, which are crucial for industrial establishments. The state provides excellent economic opportunities for industrial growth through well-planned economic corridors. Notable infrastructure projects such as the Rajasthan Petroleum, Chemical, and Petrochemical Investment Region (Rajasthan-PCPIR) in Barmer, Jodhpur-Pali-Marwar Industrial Area (JPMIA), and Khuskhera-Bhiwadi-Neemrana Investment Region (KBNIR) are promising initiatives that facilitate significant investments and generate employment opportunities for the public. Mission   The new Rajasthan Investment Promotion Scheme (RIPS) 2022 is built on three pillars: Economic Growth, Employment Opportunities, and Attractive Investment Destination. It aims to foster balanced and sustainable economic growth, create significant employment opportunities, and position Rajasthan as a preferred investment choice. RIPS seeks to attract diverse businesses and industries, contributing to the state's overall development and progress. Objectives The forward-thinking investment policy for 2022-2027 aims to accelerate economic growth by targeting a 15% annual growth rate in the manufacturing and services sectors. It also seeks to promote balanced and inclusive development by uplifting underdeveloped areas and generating employment opportunities for 10 lakh individuals. The policy aims to lead in sunrise sectors like green hydrogen and alternative energy while championing climate and sustainability through eco-friendly practices and green technologies. Ultimately, the policy aims to position Rajasthan as a leader in technological advancements and contribute to the state's overall progress and prosperity.

Rajasthan MSME Policy 2022

The Rajasthan MSME Policy for 2022 aims to boost the contribution of Micro, Small, and Medium Enterprises (MSMEs) to the state's GDP and exports by creating a conducive ecosystem. The policy focuses on regulatory ease, financial assistance, technological upgradation, entrepreneurship development, export linkages, and social cohesion to empower and support MSMEs. By providing financial and technical assistance, along with a favourable regulatory environment, the policy envisions establishing new MSME units, generating employment opportunities, and facilitating exports, thereby contributing to the state's overall economic growth and development.

Rajasthan Handicraft Policy 2022

The Handicraft Policy 2022 in Rajasthan aims to promote the state's rich cultural heritage and traditional arts and crafts by boosting investments, strengthening infrastructure, and enhancing livelihood opportunities. The policy seeks to make handcrafted products exportable and strategically market them to elevate their global reputation. It offers various facilities and support to artisans, including organizing a national-level handcraft week, providing e-marketing, social security, credit facilities, and showcasing events. The policy aims to generate employment for over 50,000 people in the next five years and empower Rajasthan's artisans, preserving their age-old handicraft traditions and positioning the state as a prominent hub for handcrafted excellence worldwide.

Rajasthan Start-Up Policy 2022

The Rajasthan Start-up Policy 2022 aims to position the state as a leading entrepreneurship and innovation centre in India by fostering a vibrant start-up ecosystem. It seeks to create a conducive environment for start-ups to thrive, promoting innovation, generating employment, and driving economic growth. The policy sets clear objectives, including job creation, innovation leadership, inclusive entrepreneurship, and support for product-based start-ups. It also encourages start-ups to address governance issues and contribute to government reforms. By nurturing start-ups and supporting their journey from ideation to market success, Rajasthan aims to become a dynamic hub for entrepreneurship and innovation, driving societal progress and economic prosperity in the state.

Rajasthan Rural Tourism Scheme 2022

The Rajasthan Rural Tourism Scheme aims to promote tourism in rural areas by establishing tourism units that showcase the life, art, culture, and heritage of villages. The scheme focuses on preserving local folk art and handicrafts while providing employment opportunities to locals. Guest houses, camping sites, and caravan parks will be set up on agricultural land, offering rural experiences to tourists through activities like agriculture, horticulture, and handicrafts. Homeowners in rural areas can also participate by providing accommodation facilities through the home stay scheme. The government aims to highlight the rich cultural heritage and natural beauty of rural Rajasthan, attracting tourists to experience and appreciate the authentic traditions and lifestyle of rural communities.

Rajasthan Electric Vehicle Policy 2022

The Rajasthan Electric Vehicle Policy 2022 (REVP 2022) aims to promote the adoption of electric vehicles (EVs) in the state by providing incentives and reimbursement of State Goods and Services Tax (SGST) on EV purchases. With an allocated budget of Rs 40 crore, the policy offers incentives based on battery capacity for two-wheelers and three-wheelers. It also focuses on developing charging infrastructure, encouraging research and skill development, and boosting EV manufacturing under the Rajasthan Investment Promotion Scheme 2019 (RIPS-2019). The government envisions creating a sustainable and eco-friendly transportation ecosystem, reducing carbon emissions, and contributing to a cleaner and greener environment for Rajasthan.

Best Locations to Set Up Business in Rajasthan   

Rajasthan offers several attractive locations for setting up a business due to its strategic geographical location, infrastructure development, abundant resources, and favorable investment policies.

• Jaipur: Capital city, well-developed infrastructure, textiles, gems & jewellery, IT, and tourism industries.
• Udaipur: "City of Lakes," tourism, hospitality, handicrafts, and marble processing industries.
• Jodhpur: Textiles, handicrafts, growing automobile, and agro-processing sectors.
• Kota: Educational hub, engineering, and manufacturing industry.
• Bhiwadi & Neemrana: Rapid industrialization, manufacturing, and export-oriented businesses.
• Ajmer: Religious & historical destination, manufacturing, and IT sectors.
• Alwar: Diverse industrial base, proximity to NCR, automobile, textiles, and chemicals.
• Bhilwara: Major textile hub, garment manufacturing.
• Sikar: Agro-processing and dairy industries.
• Pali: Textile & garment manufacturing, dyes & chemicals.
• Barmer: Rich oil and gas resources, energy exploration & production.
• Chittorgarh: Cement & limestone industries, construction materials sector.
• Jaisalmer: Tourism & hospitality, desert tourism.
• Nagaur: Cattle fair, livestock & dairy industries, agro-processing.
• Banswara: Forest-based industries, timber & wood products, woodworking & furniture sectors.
• Hanumangarh: Strategic location, logistics & transportation businesses.
• Bundi: Historical & cultural significance, heritage & cultural tourism.
• Sawai Madhopur: Ranthambore National Park, wildlife & ecotourism.
• Dungarpur: Mining & mineral industries, marble & granite, stone processing.
• Rajsamand: Marble industry, stone & marble processing.

Business Clusters in Rajasthan

• Textile Cluster - Bhilwara
• Handicraft Cluster - Jaipur
• Agro-Processing Cluster - Kota
• Marble and Stone Cluster - Kishangarh
• IT Cluster - Jaipur
• Tourism Cluster - Jaipur
• Jewellery and Gemstone Cluster - Jaipur
• Agri-Business Cluster - Kota
• Handloom Cluster - Sanganer
• Education Cluster - Kota
• Auto Component Cluster - Bhiwadi-Neemrana
• Pharmaceutical Cluster - Udaipur
• Solar Power Cluster - Bhadla
• Food Processing Cluster - Alwar
• Renewable Energy Cluster - Jaisalmer
• Leather Cluster - Jaipur
• Mining Cluster - Jodhpur
• Ceramic and Pottery Cluster - Jaipur
• Agri-Tourism Cluster - Pushkar (near Ajmer)

Tax Benefits, Incentives and Subsidies

Rajasthan offers various tax benefits, incentives, and subsidies to promote industrial growth and attract investments in the state. Some of the key benefits include:

• Industrial Promotion Scheme (IPS): Financial incentives, subsidies, and tax benefits are provided to eligible industries based on their category and location.
• GST Reimbursement: Reimbursement of SGST on certain goods, like electric vehicles, to promote clean mobility and sustainability.
• Electricity Duty Exemption: Eligible industries may receive exemptions or reduced rates on electricity duty to lower operational costs.
• Stamp Duty Exemption: Eligible industries may get a stamp duty exemption or reduction on specific documents for ease of doing business.
• Interest Subsidy: Interest subsidies are provided to support MSMEs and encourage investment in sectors like textiles, agro-processing, and renewable energy.
• Capital Subsidy: Certain industries may be eligible for capital subsidies to support investment in plant and machinery.
• Export Promotion Subsidy: Financial assistance or subsidies offered to exporters to encourage exports.
• Infrastructure Development Subsidy: Subsidies for infrastructure development for industries setting up in backward or underdeveloped areas.
• VAT/CST/CST Benefits: Tax exemptions, deferments, or reductions on VAT, CST, and CST depending on industry and location.
• Customs Duty Exemption: Rajasthan may offer customs duty exemptions or concessions on imported raw materials or machinery for eligible industries.
• Single Window Clearance: A streamlined system for easy and swift approvals for setting up industries and obtaining permits and licenses.

Rajasthan offers diverse opportunities for investment across sectors, with a strong economy in agriculture, manufacturing, and services. Its cultural heritage attracts tourists, benefiting the hospitality industry. Strategic location, infrastructure, and transportation network make it attractive for businesses targeting North India. The state leads in renewable energy, providing scope for investments in the clean energy sector. Supportive government policies and incentives promote business growth and innovation. Market entrants should research and understand local regulations, and partnerships with stakeholders are vital. Rajasthan's vibrant culture, growing economy, and ample opportunities make it an appealing destination for business expansion and growth in India.


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