A tale of two Indian cities: How Singur's loss became Sanand's gain

This Saturday, Micron Technology, the world's fifth-largest semiconductor company, will commence the groundbreaking ceremony in Sanand

In October 2008, facing a public protest led by the then West Bengal opposition leader Mamata Banerjee against land acquisition, Tata Motors chose to withdraw its Nano small car project from Singur and move it to Sanand, a new industrial estate in Gujarat not far from Ahmedabad.

Here, the then chief minister Narendra Modi presented Tata Motors with appealing incentives and it became the anchor investor in the nascent industrial town.

Banerjee’s agitation propelled her into the political mainstream of the state, aiding her ascent to the position of chief minister in a state that used to be a CPI(M) stronghold.

Now fast forward 15 years. Singur’s loss has become Sanand’s gain. Sanand has evolved into one of the nation's leading automotive hubs, with investments exceeding Rs 24,000 crore, and more expected to be finalised soon.

The area has also nurtured a diverse range of industries including food processing, pharmaceuticals, medical devices, and packaging and now even branching out into semiconductors.

Over 400 companies have established their bases in Sanand, including more than 25 multinationals such as Nestlé (Rs 700 crore), Colgate-Palmolive (Rs 200 crore), Coca-Cola (Rs 450 crore), Posco (Rs 128 crore), Mitsubishi, and Bosch (Rs 280 crore).

“Sanand is quickly filling up as an increasing number of companies are keen on setting up their units here. Micron Technology, for instance, has been allotted 93 acres,” said Videh Khare, mission director of the Gujarat State Electronics Mission.

On Saturday, Micron Technology, the world's fifth-largest semiconductor company, will perform the groundbreaking ceremony in Sanand for its much-anticipated Advanced Test and Manufacturing Package plant.

Slated for completion by December of next year, this facility represents a $2.75 billion investment and is expected to generate around 5,000 jobs, according to Khare.

Over in Singur, Mamata Banerjee’s government has tried to make good the loss with tentative attempts to revive Singur as an industrial centre. They have been mostly unsuccessful.

The opening of an agrotech industry park and a railway coach factory have evoked a cool response from large investors.

Sanand is thriving, thanks to its meteoric rise as a significant automotive hub.

The Tata Motors car plant, spread over 1,100 acres, has contributed to 30 per cent of the 5.5 million cars produced by the company since inception to FY23. It also accounts for 25 per cent of the company’s total passenger car capacity in FY23.  Its recent acquisition of the neighbouring Ford factory will substantially augment Tata’s production capabilities, adding another 300,000 to 420,000 units per annum and 460 acres.

Investments in Sanand by the Tatas exceed Rs 7,000 crore. These include the Rs 5,300 crore plant, the Ford factory (Rs 727 crore), and additional customisations worth Rs 1,000 crore.

The Sanand factor, after the Ford acquisition, is expected to generate more than 7,000 direct jobs and contribute to over 30,000 indirect jobs, say analysts.

This has made Gujarat, once a nonentity in the automotive sector, a key competitor alongside Maharashtra, Tamil Nadu, Karnataka, and Delhi NCR. Further consolidating their position, the Tatas are also looking to establish Agratas Energy Solutions in Sanand, earmarking Rs 13,000 crore for a lithium-ion cell battery factory with a 20 GWH capacity.

A significant part of this capacity is intended for captive consumption within Sanand and other Tata locations. Moreover, 25 vendors are situated in Tata's own vendor park, companies such as Lumax Industries, JBM Auto, Tata Autocomp Systems, and Tata Toyo Radiators.

Other major players in the automotive and components sector also view Gujarat as an appealing destination. Investment in the state in big auto projects is estimated to be over Rs 43,000 crore.

Only 37 kilometres away from Sanand, in Hansalpur, Suzuki is investing approximately Rs 10,400 crore for a new car plant and another Rs 7,000 crore for an electric vehicle battery unit.

Other major industry participants like Honda Motorcycles and Hero MotoCorp have also established substantial units in the state.