Suboptimal road connectivity in India is a major hurdle in maintaining the competitiveness of Indian manufacturing sectors, said newly appointed office bearers of Confederation of Indian Industries (CII) in Gujarat. They also said that subsidy to industries is hurting the economy in a long run and that the emphasis to create infrastructure is a step in the right direction.

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"The cost of transporting goods from Ahmedabad to Kolkata via road is the same as that of transporting goods to EU. This adversely affects our competitiveness," said Raju Shah while interacting with media persons in the city after being elected as the chairman of CII Gujarat State Council for the year 2019-20. Shah is also the chairman of Harsha Engineers. Piyush Tamboli, CMD of Bhavnagar-based Investment Precision and Castings Ltd (IP&CL) will be his deputy during the one year term.

He also said that Gujarat not getting many estates of Gujarat Industrial Development Corporation (GIDC) in the past two decades has not hurt economic development of the state. "Subsidies hurt in a long run. Instead, the government is focusing on the creation of infrastructure, which is a step in the right direction," he said.

Tamboli said that automobiles, defence and aerospace sectors are the emerging sectors for Gujarat and the state will see lots of investment in these sectors. "The provision of Offset Clause will necessitate partnering with local manufacturers. Offset requirements are also likely to rise from 30 per cent to 50 per cent of the contract value," said Tamboli.

He said that unlike previous occasions, when the demand for commercial vehicle rose ahead of general elections, this time there is no such rise even as Lok Sabha elections are around the corner. Fresh regulation in the disbursement of loans and higher fuel prices are also affecting sales. Automobile sector, in general, is passing through a phase of slowdown.

"New investments have stopped and everyone is waiting for clarity to emerge (after the results of Lok Sabha elections). There is uncertainty now. The first and the second quarter seem to be difficult. Things should improve in the third quarter," said Tamboli.