GANDHINAGAR, India — Leading Indian conglomerates touted a series of large-scale investments in Gujarat at a key business forum this week, doubling down on their presence in the home state of Prime Minister Narendra Modi.

Tata Group “is on the verge of concluding and announcing a huge semiconductor fab in Dholera” in Gujarat, said Natarajan Chandrasekaran, executive chairman of group holding company Tata Sons, at the opening ceremony of the Vibrant Gujarat Global Summit on Wednesday. The event is typically held every two years to court investment in the state.

Chandrasekaran had previously expressed an interest in expanding Tata’s business portfolio to include chipmaking. Wednesday’s speech, delivered in front of key figures including Modi, confirmed the Tata leader’s plans to do so starting in the prime minister’s state.

Adani Group Chairman Gautam Adani spoke of investing 2 trillion rupees ($24.1 billion) in Gujarat “over the next five years,” creating more than 100,000 direct and indirect jobs. The conglomerate is focused on infrastructure development and is making inroads in renewable energy as well.

Reliance Industries Chairman Mukesh Ambani stressed that he has attended every single Vibrant Gujarat forum and said that “Reliance will contribute to making Gujarat a global leader in green growth.”

Modi was the leading force behind the first Vibrant Gujarat forum in 2003, when he was chief minister of the state. Gujarat at the time lagged behind such Indian hubs as New Delhi in attracting foreign investment and was reeling from an earthquake in 2001 and deadly rioting in 2002.

Investment in Gujarat has since increased. Nominal gross state value added in manufacturing in Gujarat totaled 6.31 trillion rupees in fiscal 2021, nearly 11.4 times the fiscal 2004 figure and topping all other Indian states.

Gujarat’s robust infrastructure and close ties to the central government also add to the state’s appeal.

Tata Group plans to build a semiconductor fab in Dholera, in the state of Gujarat. (Dholera Industrial City Development)

Modi has been focused on developing port and power infrastructure in Gujarat since he was its chief minister. The state’s rapid economic growth has been dubbed the “Gujarat miracle,” and its ports on the Arabian Sea have become key export hubs for the Middle East and Africa.

After becoming prime minister, Modi in 2015 agreed to adopt Japanese shinkansen bullet trains for a high-speed rail link between Ahmedabad in Gujarat and Mumbai in neighboring Maharashtra. Gujarat is also seen as a candidate to host the 2036 Olympic Games.

“Gujarat is in lockstep with the central government,” Takehiko Furukawa, who heads the Japan External Trade Organization’s Ahmedabad office, said of the state’s industrial development.

For example, Gujarat in 2022 compiled a policy for promoting semiconductor manufacturing in the state, including subsidies for related land purchases. This followed a 760 billion rupee incentive framework announced by the central government in December 2021 for semiconductors and other industries.

India’s powerful state governments often compete with one another for investment, which can lead to inconsistent policies across the country. But investors see Gujarat’s close coordination with the central government as a plus.

Gujarat hopes to attract more cutting-edge businesses as the rivalry between the U.S. and China pushes global companies to reassess supply chains. Micron Technology announced in 2023 that that it would build a semiconductor assembly and test facility in the state.

India’s ruling Bharatiya Janata Party has the advantage ahead of the general election expected to end in May. With Modi looking increasingly likely to secure a third term as prime minister, Gujarat is expected to remain an appealing investment destination for the foreseeable future.

But not all businesses appear bullish on the state. Many Japanese players are wary of uncertainties in India and are opting for a cautious stance. Suzuki Motor was the only Japanese company to announce a major investment at Vibrant Gujarat, including a second auto plant in the state.

Even if the BJP wins the election, it is unclear how long Modi, now in his 70s, will maintain his clout. Gujarat also continues to face certain obstacles to attracting investment, such as tougher restrictions on alcohol. Businesses weighing investments in the state may find it in their best interests to see whether the state can draw up policies and measures that do not rely on close cooperation with the central government.