Those who travelled to the fifth Vibrant Gujarat Summit this past week experienced not just dazzling investment statistics and the fruits of purposeful governance but also, in a sense, social engineering. The figures are well known. Over two days, 7,936 memoranda of understanding (MoUs) were announced, committing to invest $462 billion in Gujarat. If all of this money does come in — to be fair, some of the MoUs will remain theoretical — it will create 5.2 million direct and indirect employment opportunities.
Even so, this was not just another business meeting. The Vibrant Gujarat Summits have become the largest such events in India. Delegates from 80 countries turned up this year, as did the cream of Indian business. Forty-five countries and 19 other (non-Gujarat) Indian states made presentations and solicited business opportunities. It was a show that brought together the old world, the new world and the newer world.
Sitting on the dais at the inauguration were Mukesh and Anil Ambani, Ratan Tata and Sir Michael Kadoorie — chairman of the Hong Kong based China Light and Power Company, scion of a Baghdadi Jewish family that cut deals with the Tatas in mid-19th century Bombay — the Prime Minister of Rwanda (who invited Indian/Gujarati capital to exploit his country’s resources) and the ambassador of Japan (who put his weight behind Japanese capital coming into Gujarat). Canada and Japan were Vibrant Gujarat’s partner countries. The president of the United States-India Business Council promised the Americans would do the honours the next time, in 2013.
The roll-call is less relevant than the larger message: India’s premier globalisation event — “Davos in Action”, as Gujarat government officials have nicknamed their flagship business show — is organised by a state government. There are two reasons for this. First, in any emerging economy, some states and regions move faster and grow quicker than others. In China, the eastern coast has cities that outdo Manhattan. Individual provinces have gross domestic products that are bigger than those of most countries. In India, Gujarat and, to an extent, Tamil Nadu have galloped ahead of other states. They have adroitly used their coastlines and ports to capture a slice of global trade.
The second reason is the diffidence of the Union government. The Congress, for all the intellect at its command, is a reluctant economic reformer. It has shied away from proactive deregulation and from projecting India as a gung-ho, growth-first economy. This does not suit the mental make-up of its leadership. That is why United Progressive Alliance (UPA) ministers are happier promoting India as a potential economic superpower in faraway locales like Davos — where the “India Inclusive” extravaganza later this month will be the second World Economic Forum event in five years to be dedicated to India — rather than before a domestic audience.
On his part, Narendra Modi, chief minister of Gujarat, has no such diffidence. He also differs from successive administrators in Tamil Nadu and Maharashtra — the two states that could have seriously challenged Gujarat — in that he is personally incorruptible and runs a government that has minimised (if not eliminated) rent seeking from investors and provides clearances expeditiously. This was a point made by many businessmen at Vibrant Gujarat.
That apart, Mr Modi is also an astute politician who realises economic reform, at the end of the day, has to not only lead to impressive statistics but also generate visible prosperity and be embraced by a critical mass of society. The gap between globalisation’s winners and losers has to be rendered smaller and smaller by making the process of global economic integration intelligible to the greatest possible section of stakeholders and giving them the sense that they can optimise its opportunities. He uses Vibrant Gujarat as a mechanism to bring globalisation home to the Gujarati.
As such Vibrant Gujarat has become a combination of a business barons’ conference, an investor meet, a trade fair and a general mela. It is a measure of Gujarati society — and this is a gene that arrived millennia before Mr Modi — that a business event of this type has become a mass celebration, almost a secular festival, with a build-up that incorporates accessible seminars on building new cities as well as the state’s popular kite-flying tradition. Kolkata has its book fair; New Delhi has its Commonwealth Games or similar taxpayer-subsidised jamborees; Gandhinagar-Ahmedabad has Vibrant Gujarat. Each city has its individual self-image and own idea of getting its citizens to engage with the world. It is telling.
Gujarat has historically been a trading hub. Its early manufacturing forays were in textiles and diamonds/gems and jewellery. In recent years, it has become a force to reckon with in petrochemicals and petroleum refining, and power generation. Mr Modi’s decade in office has seen it take the next leap to hi-tech manufacture, establishing it as a base for automobiles (Tata Motors, General Motors, Mahindra and Mahindra) as much as for Bombardier, the Canadian company that makes coaches for the Delhi Metro. Further, 40 per cent of the Delhi-Mumbai Industrial Corridor passes through Gujarat. Here, Japanese investment will incubate new cities as well as transplant precision-manufacture facilities.
The beneficiaries of this process will not always be current superstars. There is a reservoir of entrepreneurial talent in Gujarat that believes it can shape this future. Dhirubhai Ambani and more recently Gautam Adani are examples of first-generation Gujarati businessmen who have, in one lifetime, evolved from traders to small and medium enterprise (SME) manufacturers to running internationally-benchmarked facilities to investing overseas and going global.
As Gujarat prospers, there will no doubt be more Ambanis and Adanis, a greater conversion rate of SMEs to megacorps and the birth of a new generation of world-class Indian tycoons. Vibrant Gujarat is designed to give this process a leg up. As Mr Modi puts it, it provides the small industrialist in Gujarat — the one who cannot easily travel to the trade fairs of the West — “exposure to available technologies and to the way business is done” by his peers in other countries. It is very different from a self-congratulatory talking shop in Davos, but it leaves a deeper impress on Gujarati society.
The results are showing. Gujarat has five per cent of India’s population, but is responsible for 16 per cent of its industrial production. Other states want to be part of the Gujarat story and even Andhra Pradesh — run by the Congress, usually a party hostile to acknowledging Mr Modi does anything worthwhile at all — used Vibrant Gujarat to showcase itself to potential business partners. No wonder, as Chanda Kochhar, chief executive officer of ICICI Bank, suggested, “When the world looks to India for growth, India looks to Gujarat”.

Ashok Malik can be contacted at malikashok@gmail.com