Sanand’s Next Industrial Leap
SIA President Ajit N. Shah on building the factory ecosystem of tomorrow
Sanand has emerged as one of Gujarat’s most consequential manufacturing hubs. But for Ajit N. Shah, President of the Sanand Industries Association, the more important question is what comes next.
As Gujarat’s industrial landscape moves into a new phase shaped by semiconductors, electronics and advanced manufacturing, Shah is increasingly articulating a broader agenda for the region’s SME ecosystem one built around technology adoption, productivity, skills, resilient infrastructure and integration into global supply chains.
His vision goes beyond attracting the next large factory. It is about creating the conditions in which Gujarat’s engineering and manufacturing SMEs can move from local vendors to globally competitive suppliers and, ultimately, positioning Sanand as a smart, future-ready industrial ecosystem.
In this conversation with SME Communities, Shah discusses the emergence of “Sanand 2.0”, the modernisation choices facing SMEs and why the Factory of the Future will depend as much on the ecosystem outside the factory gate as the technology within it.
SME Communities: Sanand’s first great industrial transformation was driven by automobiles and large-scale manufacturing. It is now attracting semiconductors, electronics and increasingly sophisticated manufacturing. Are we witnessing the beginning of Sanand 2.0?
Ajit Shah:
I believe we certainly are. Sanand has already demonstrated its ability to create a strong manufacturing ecosystem around automobile, engineering, FMCG, pharmaceuticals and several other industries. Today, another important chapter is beginning with investments in semiconductors, electronics and advanced manufacturing.
The significance goes beyond the large investments themselves. Whenever a major global manufacturer establishes a facility, an entire ecosystem develops around it vendors, engineering services, logistics, maintenance, tooling, packaging and many specialised SMEs.
For our existing industries, therefore, this is a major opportunity. But we should not assume that opportunity will automatically come to us. Our companies will have to upgrade their technology, quality systems, productivity and skills if they want to become part of these new supply chains.
The next phase for Sanand should therefore be not simply more factories, but better factories.
SME Communities: For years, Indian manufacturing competed primarily on entrepreneurship, cost and execution. As global supply chains become more demanding, what will determine competitiveness over the next decade?
Ajit Shah:
Cost will always remain important, but increasingly it will not be enough.
Customers today expect consistency, traceability, quality, shorter delivery cycles and increasingly sustainability as well. This means manufacturers have to look seriously at automation, digitalisation, energy efficiency, better production planning and stronger quality systems.
For SMEs, this transformation has to be practical. Not every company needs to build a completely automated factory tomorrow. A manufacturer can begin with the area where technology produces the clearest return reducing rejection, improving machine utilisation, saving energy or increasing throughput.
The important change is in mindset. Technology should no longer be seen simply as an expense. When properly implemented, technology becomes an instrument for productivity and competitiveness.
SME Communities: That transition sounds straightforward for a multinational. For a ₹50 crore or ₹100 crore engineering company, however, capital and management bandwidth are finite. How should an SME decide what to modernise first?
Ajit Shah:
This is exactly where we need a different approach for SMEs.
Modernisation should not mean purchasing technology because somebody else has purchased it. Every investment has to address a business problem. If automation can improve output or reduce dependency on a difficult process, examine automation. If electricity or gas represents a significant cost, examine energy efficiency. If rejection is high, look at process control and quality. If customers require better visibility, look at digital systems.
The second requirement is return on investment. Our entrepreneurs are very practical people. If we can demonstrate that an investment improves productivity, reduces wastage or creates access to better customers, adoption will happen much faster.
That is also where industry associations can play a useful role bringing manufacturers, technology providers, financial institutions and experts onto one platform so that SMEs can understand what is relevant to them before making investment decisions.
SME Communities: Sanand’s growth has also exposed some very traditional constraints power, gas, infrastructure, logistics and availability of skilled workers. Can “Factory of the Future” ambitions succeed without first solving these fundamentals?
Ajit Shah:
Both have to happen together.
There is little value in putting sophisticated machinery inside a factory if basic industrial infrastructure is unreliable. Industry needs dependable power and utilities, good roads, drainage, transportation, worker facilities and efficient movement of goods.
SIA has therefore consistently worked with GIDC, the state government and other authorities on practical issues affecting our members. At the same time, we have to prepare for tomorrow.
Skills will become particularly important. As factories become more automated and digital, the nature of employment will change. We will require people who can operate, maintain and troubleshoot more sophisticated equipment. Industry, government and training institutions will have to work much more closely on this.
My view is that smart factories ultimately require a smart industrial ecosystem around them.
SME Communities: Global manufacturers increasingly evaluate suppliers on energy consumption, sustainability, cybersecurity and resilience alongside price and quality. Do smaller engineering companies in Sanand recognise how quickly the supplier rulebook is changing?
Ajit Shah:
Awareness is increasing, particularly among companies already supplying large Indian and multinational manufacturers.
Once you become part of a global supply chain, the customer’s expectations become your standards. Tomorrow, questions about energy consumption, environmental performance, data security, business continuity and traceability will become increasingly normal.
For SMEs this should not be viewed only as another compliance requirement. Companies that prepare early can actually turn these capabilities into a competitive advantage.
Sanand already has the benefit of operating alongside some of the world’s leading manufacturers. Our SMEs should use that exposure to learn global practices and progressively raise their own standards.
The ambition should be to move from being a local vendor to becoming a globally competitive supplier.
SME Communities: You have spoken previously about transforming Sanand into a “Smart Industries Estate”. If we return to Sanand in 2035, what would you like us to see?
Ajit Shah:
I would like Sanand to be recognised not simply for the number or size of factories located here, but for the quality of its entire industrial ecosystem. SIA is focusing on making our slogan for Sanand based companies – ‘MSME to MNC’ – come true in reality.
I would like to see modern infrastructure, efficient utilities, technology-enabled factories, cleaner and more energy-efficient manufacturing, skilled workers, better facilities for employees and much stronger participation by our SMEs in national and international supply chains.
We already have large Indian companies, multinational manufacturers and a very entrepreneurial SME community operating together. The next step is to connect these strengths more effectively.
Our objective should be that when an investor or customer anywhere in the world thinks about manufacturing in India, Sanand should naturally be among the locations they consider first.
That, for me, would be the real meaning of a Smart Industries Estate.
