ગુજરાતી
English
Gujarat’s development slows due to a severe recession.
Dilip Patel
Gandhinagar, February 26, 2026
The national economic growth rate is 6.5 percent, while an information department of Gujarat has claimed by press realised Gujarat’s economic growth rate to be 7.4 percent.
In the 13-year period from 2012-13 to 2024-25, Gujarat’s average economic growth rate was 8.3 percent. This has decreased by 1.1 percent in one year. This indicates that Gujarat is going through a severe recession.
The Gujarat government’s debt ratio will be 14.65 percent in 2026-27.
In the 2026-27 budget of ₹4 lakh crore, ₹2.65 lakh crore has been allocated for development, which is 65 percent.
Over the past five years, the central government has allocated a total of ₹8,151 crore (approximately $1.5 billion) to the state under various funds for natural disasters. Of this, the Modi government has allocated ₹5,852 crore (approximately $1.8 billion) to the State Disaster Response Fund, ₹1,141 crore (approximately $1.4 billion) to the State Disaster Mitigation Fund, ₹1,076 crore (approximately $1.8 billion) to the National Disaster Response Fund, and ₹81 crore (approximately $1.8 billion) to the National Disaster Mitigation Fund. Compared to this, Gujarat’s farmers have suffered significant losses.
There are many reports that Bhupendra Patel’s policies have failed.
It is estimated that at least 1 million workers in Gujarat have become unemployed due to the slowdown in small industries in diamond, steel, and textiles. It is believed that 500,000 people lost their jobs in diamond factories alone after Diwali.
Diamond Industry
Due to the recession in the diamond industry in Surat and Navsari, more than 10 jewelers have committed suicide in the last six months due to the difficulty in supporting their families. In 2025, there was a recession. Artisans who used to earn 25,000 to 30,000 rupees per month were now unable to earn even half that amount.
In Navsari, approximately 25,000 to 30,000 artisans were polishing diamonds. Previously, Chinese diamonds had caused a global recession. Chinese diamonds, which were considered inferior to real diamonds, were available for 6,000 to 7,000 rupees. Real diamonds were priced at 15,000 to 2,000 rupees.
On December 4, 2024, 15,000 employees lost their jobs at Maruti Impact, a diamond manufacturing company in Surat. Suresh Bhojpara, owner of Maruti Impact, suffered a brain stroke.
In October 2023, a 20% recession in Botad led to the closure of over 40% of diamond factories. Industry estimates predict a recession will occur after the Navratri festival.
Surat has 600,000 diamond polymer factories and 5,000 small, medium, and large factories. Each unit employs 10 people. The situation was similar in Surat. Of the 6 million people employed in diamond factories, 50% became unemployed. Surat produces 85% of the world’s diamonds.
The Surat Diamond Bourse was inaugurated by Prime Minister Narendra Modi on December 17, 2023. Since then, a severe recession has hit. The world’s largest office complex, with 4,200 office rooms, was built, but the recession has crippled it.
As of December 2024, after Diwali, 50% of factories have not reopened. Small industries, which account for 75% of all natural diamonds, have not reopened. Due to the two-year recession, diamond prices have fallen by 40%.
In 2024, the same number of diamonds will be produced as in 1980. The supply of rough diamonds has reached levels reached 44 years ago. Surat’s 8,000 small diamond cutting and polishing industries support 1.5 million jobs. The 21-day Diwali holiday was extended to 30 days, but even after that, the situation did not improve, leading to unemployment reaching 50%.
It is estimated that 500,000 people are unemployed in diamond factories, and 200,000 are partially unemployed.
Bhavesh Tank of the Gujarat Diamond Workers Association reported in November that 50,000 artisans in Surat have become unemployed in 10 months. This has occurred in four districts of Saurashtra. Of these, 150,000 were working in Amreli, 350,000 in Bhavnagar, and 200,000 in Junagadh and Botad. Of these, 100,000 are unemployed. 70,000 people who traveled to their hometowns from Surat on 1,000 SST buses have not returned.
70,000 people were working in 1,500 diamond factories in Botad. More than 40% of small and medium-sized factories closed in two months.
Forty-two unemployed artisans committed suicide. The financial situation of their families is dire.
Amreli has 960 factories, affecting 42,000 artisans, as 30% will not reopen after Diwali 2024.
Government assistance has been sought, but the government has not provided any assistance.
5.1% growth was expected in 2023, but the industry has faced difficulties.
More than 30 diamond artisans have committed suicide in five months.
Diamond factories had to be closed for two months.
Diamond exports fell from ₹77,500 crore to ₹60,222 crore in three months.
Gujarat’s primary diamond market is the US.
The man-made diamond market was US$1 billion, which grew to $12 billion in 2022, with an annual growth rate of 17% and a growth rate of 38% over the past two calendar years.
It will reach $37.32 billion in 2028.
CR Patil and BJP leaders were wooing these diamond artisans for votes in the 2022 and 2024 elections. Now, they are neither visible nor doing anything to provide relief. Only Kishor Kanani, the BJP MLA from Varachha, has demanded relief for the diamond industry. Even then, he is silent.
Paper Mills
Competing with China, the diamond industry has been facing a decline for the past three years.
120 paper mills producing various paper products in P, Morbi, Surat, and Ahmedabad are currently facing a recession. More than 25 of these have closed. In the past three years, eight of Vapi’s 40 paper mills have closed, leaving approximately 5,000 workers unemployed. Five more paper mills are on the verge of closure. In Morbi, approximately 15 paper mills are currently closed.
Closed.
See the reality:
The BJP government’s policies are sounding the death knell for 55,000 industries, including pharmaceutical parts, oil engines, and brass parts. Thousands of diamond units have closed. Gujarat ranks fifth in the country in the small, micro, and medium industries sector and first in the startup sector, not because of the government, but because of its business leaders and entrepreneurs.
July 2024
In Gujarat, 4,861 medium, small, and micro industries (MSMEs) have closed down in the four years from July 2020 to 2024. Of these, 5,876 were micro, 89 were small, and 7 were medium units. This is the third highest in the country after Maharashtra and Tamil Nadu. Industries in Gujarat are facing a recession. According to the government’s MSME Ministry, three to four industries are falling sick every day in Vibrant Gujarat.
Small Industries
In 2014, there were approximately 300,000 registered small and medium industries in Gujarat, of which approximately 95% were unregistered. 9% of small and medium industries had closed down.
In 2021, 1,500 industries closed down in GIDC.
In 2024, according to the Industrial Director’s website, out of 48,000 registered factories, 38,000 were operational, and 9,800 had closed.
Unemployment is high.
During Modi’s 10-year rule, the number of educated unemployed has increased by six percent. The India Employment Report 2024 clearly states that unemployment among educated youth in India has increased. The number of unemployed youth with secondary or higher education has increased. The share of educated youth in unemployment was 54.2 percent, which increased to 65.7 percent in 2022.
Gujarat
Gujarat has a total of approximately 500,000 units, of which 70,000 are in GIDC. In Gujarat alone, 8,500 plots and 500 sheds lie vacant in industrial estates, while 2,200 industries are closed. There are 228 industrial estates covering 36,000 hectares. Over 500 private estates cover 100,000 hectares.
As of February 2024, 35,680 of the 37 million small and medium-sized factories in India had closed. 13,290 units closed in 2022-23, and 6,222 in 2021-22, with 3,243 small units closing in Gujarat. The closure of 34,000 industries resulted in the loss of 120,000 jobs out of 170 million.
Slump in Alang
Alang Facility
There were 183 shipbreaking yards along the 14-kilometer (8.7-mile) coastline, with a total capacity of 4.5 million light displacement tonnage (LDT). Annual steel production was 3.5 million tons and turnover was $1.3 billion, which is no longer the case.
A large portion of the total scrap is used in re-rolling mills and foundries in cities and rural areas like Bhavnagar, Sehore, Vartej, etc. Scrap equivalent to 101 trucks is exported outside the state of Gujarat.
Reasons for the Recession in Alang
This is the longest recession in the 42 years since Alang was built.
The iron ore market crashed in 2008.
Market and dollar prices were low in 2015.
The silent and careless attitude of GMB officials.
Import duties.
High fixed costs.
Good shipping rates in the international market.
Piracy in the Red Sea.
Demand for rods, strips, and bars produced in rolling mills is low.
Competition from Pakistan and Bangladesh.
Scrap imports have increased.
Lack of cooperation from the central and state governments.
The BJP government in Gujarat cannot speak to the central government.
Prime Minister Narendra Modi has distanced himself from Gujarat.
Re-rolling Mills Closed
Due to the recession, only 10% of re-rolling mills will remain. There are 120 steel re-rolling mills in Sehore city. In 2023, 90 mills were operating annually. This increased to 40 in 2024. In 2025, 15 mills will close. These are being closed due to a shortage of steel plate. The daily production of a small mill has dropped from 20 tons to 5 tons. Alang used to receive 2.5 to 3 million tons of steel for recycling every year. Besides Bhavnagar, it is sent to Maharashtra and Punjab. The price of molten scrap metal has dropped to Rs 10,000 per ton.
Transport
Once 1,000 trucks were used to load steel plate, furniture, scrap, and other materials, the number of trucks has now dropped to 10 to 20 per day.
Employment
According to the Ministry of Ports, Shipping and Waterways, Alang provides direct and indirect employment to approximately 515,000 people. Of these, 40,000 are workers and 150,000 are indirectly employed in the oxygen plant and rolling stock.
Ships Arrived by Financial Year
357 in 2010-11
348 in 2009-10
415 in 2011-12
275 in 2014-15
249 in 2015-16
259 in 2016-17
202 in 2019-20
187 in 2020-21
209 in 2021-22
131 in 2022-23
113 in 2024-25
Stainless Steel
October is considered a month of short recession. October has been the worst month since April 2020. Gujarat accounts for 80% of the country’s stainless steel MSMEs. 3-35% of units have closed down. The situation is similar in Alang. Ahmedabad has 80 induction furnaces.
Twenty of these companies have closed down. Meanwhile, more than 100 re-rollers (manufacturing various items like utensils) have shut down due to cheap imports.
Textiles
In 2023, the textile industry in Surat and Ahmedabad was doing well globally, but 20 of the 400 textile processing units in South Gujarat, producing 100,000 meters of fabric worth ₹5 crore (approximately $1.5 billion), closed down.
In 2023, the Surat textile industry in Gujarat saw a 30-40% decline in production.
Production and employment were cut by 50%.
Surat is India’s second-largest textile manufacturing center after Tirupur in Tamil Nadu, with a value of ₹80,000 crore (approximately $1.5 billion).
It employs 2 million out-of-state workers.
Compared to the current 45 million meters of cloth, 25 million meters of cloth were being produced every day. Surat has approximately 50,000 textile manufacturing units. Overall production in the industry has declined by approximately 30%. Imports of cheap Chinese textiles have increased. Stainless Steel In January 2024, due to the burden of heavy imports of cheap Chinese textiles, approximately 30-35 percent of medium and small industries in Gujarat closed between July and September last year. 80 percent of India’s stainless steel is produced in small and medium industries in Gujarat. Twenty out of 80 induction furnace companies in Ahmedabad closed down. More than 100 utensil re-rollers have closed down. 1,800 companies closed down. From April 2020 to November 29, 2021, 1,938 companies across Gujarat closed down. These were companies in the tourism and travel sectors. Despite the closures due to COVID, the government did not provide any assistance. 20 Paper Mills Closed
By June 2023, 20 out of 100 paper mills in Gujarat have closed in six months. Those in Morbi, Ahmedabad, Surat, and Vapi have closed, leaving 26,000 people unemployed. The mills’ demand was 300,000 metric tons. Production has fallen by 50%. Gujarat and Maharashtra’s annual exports, which were 150,000 tons, have dropped to 30,000 tons. Export destinations were China, the Middle East, and others.
Each paper mill provides direct employment to 300 people and indirect employment to 1,000 people. The daily production of a single mill is 150 tons. Paper is used for packaging material. Four mills have closed in Vapi in two months. Gujarat has paper mills in Vapi and Morbi. Of the 100 paper mills, 20 were in the Vapi GIDC in Valsad district. Plastic
After the ban on the use of plastic, 2,000 small industries closed down, affecting the employment of 50,000 people. Most of the units are located in Halol, Vadodara, and Waghodiya in Panchmahal district.
30,000 units manufacture plastic in the country. 90% of these are small units. Of these, 10,000 units are in Gujarat. Approximately 80% of these are in the small-scale sector, with an annual turnover of approximately ₹10,000 crore. The total turnover in the country is ₹38,500 crore. This has led to a massive recession. The employment of 50,000 people has been directly affected. (Google translation from Gujarati)
