Gujarat’s long-standing reputation as one of India’s most industry-friendly states has taken a beating, with official data pointing to a steady erosion of corporate confidence.
As many as 846 companies have shifted their registered corporate offices out of Gujarat over the past 12 years, raising questions about the state’s industrial climate even as it continues to be projected as India’s growth engine.
Hemant Shah, a political and economic affairs analyst, told Vibes of India that 846 industries constitute a significant number. He said that after GST there is no VAT, and the reasons behind the relocation of corporate offices need to be examined closely.
The data was disclosed in a report tabled in the Lok Sabha, placing the narrative around flagship investment events such as the Vibrant Gujarat Summit under closer scrutiny.
According to a report in a vernacular daily, Gujarat has long projected itself on the global stage through the Vibrant Gujarat Summit, positioning the state as a preferred investment destination. However, official data points to a contrasting trend. Between June 2014 and November 2025, as many as 846 companies shifted their registered offices from Gujarat to other states.
Most of these companies moved to Maharashtra, followed by Delhi and West Bengal. Notably, similar investment promotion events in some of these states were launched much later than Vibrant Gujarat.
Over the past 12 years, the state has rolled out multiple industrial policies with special incentives to boost industrial investment. The development of GIFT City near Gandhinagar was intended to facilitate global and domestic corporate entities to operate from and register in Gujarat. Despite infrastructure such as a single-window clearance system and other facilities, the impact of bureaucratic hurdles over the past decade has become increasingly apparent.
According to the Lok Sabha reply, while 846 companies migrated out of Gujarat, only a limited number moved into the state — 42 from Madhya Pradesh, 680 from Maharashtra, and 38 from Uttar Pradesh — during the same period. Of the companies that migrated out, 36 cancelled their registrations in Gujarat and re-registered elsewhere.
A significant proportion of these firms belonged to sectors such as metals, chemicals, and allied manufacturing.
At the national level, 1,89,293 companies were reportedly deregistered between 2020–21 and 2024–25 for violations of the Companies Act, 2023. Gujarat accounted for 7,834 of these deregistrations. The highest number was recorded in 2021–22, largely on account of companies failing to file annual returns and financial statements after registration.
Several factors have contributed to the migration of industries from Gujarat. Lower electricity tariffs in states such as Maharashtra have encouraged power-intensive sectors, including textiles, to relocate. Cheaper land and industrial plots in other states have helped reduce overall production costs, while lower labour costs in certain regions have also acted as an incentive.
In addition, a shortage of highly skilled workers, labour gaps caused by the migration of migrant workers, more competitive subsidies and financial incentives offered by other states, and closer access to large consumer markets have further prompted companies to move their operations out of Gujarat.
Also Read: Central Report Reveals Sharp Decline Of Small Industries In Gujarat Despite Mega Summits https://www.vibesofindia.com/central-report-reveals-sharp-decline-of-small-industries-in-gujarat-despite-mega-summits/
