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6.3 DMIC: Delhi Mumbai Industrial Corridor

The Neemrana Industrial Park was an early bird project part of the larger DMIC project. It was an important joint Japan–India industry promotion proposal.

The DMIC “is a joint Japan–India project for a major industrial area connecting industrial parts and ports via freight railways and roads between Delhi and Mumbai, for the purpose of promoting foreign investment and exports.” (JETRO Delhi “DMIC concept explanatory material, December 2009”) By constructing approximately 1,500 km of new freight railways between the interior political capital of Delhi and the industrial port city of Mumbai, it attempts to invigorate the Indian industry by outfitting the railway as its key traffic route, by building industrial parks, interior distribution facilities, and new ports along the railway corridor. Preparations for a high-speed railway scheduled for completion in 2016 are underway, and the Japanese government has committed toward contributing construction capital out of Official Development Assistance (ODA) funds (Fig. 6.2).

This is a massive Indian project involving six states (Haryana, UP, Rajasthan, Madhya Pradesh, Gujarat, and Maharashtra) and multiple government organizations (state departments of commerce, offices of chief ministers, planning committees, departments of finance, infrastructure-related departments). The DMIC Development Corporation (DMICDC) was established in January 2008 as a panstate special purpose development organization. The development of the DMIC Master Plan was completed in 2010, outlining a grand concept for constructing a total of 24 industrial cities across the six states by 2030. With acceleration of urbanization among the Indian population, it is estimated that 40 % of India's total population will live in urban areas by 2030. Because of this, the DMIC Master Plan calls for the job creation through construction of industrial parks and for the urban

Fig. 6.2 Map of DMIC and High-Speed Railway (Source: JETRO Delhi materials from DMIC)

development of surrounding regions as residential areas. The DMICDC oversees all these projects and assumes the role of developer in concert with state governments.

In India, the management of land not owned by citizens is the responsibility of state governments. Accordingly, actual urban development is carried out by state governments providing land to Special Purpose Companies (SPCs), which finance the DMIC project through funds to develop each urban area. Projects that have a high potential for commercialization, such as electric power projects, are undertaken as Public–Private Partnerships (PPPs), with the expectation of joint public private financing. Projects of a more public nature, such as roads and water services, are managed directly by the SPCs as public works projects.

However, these development plans are still in their conceptual stages, and funding will be necessary from the Indian government to proceed with future urban development. Also, the 24 new cities outlined by the Master Plan are, for the most part, to be established in vacant areas. It is unlikely that companies will set up operations in industrial parks with low infrastructure, and with no companies in hand to occupy an industrial park, private companies will be slow to invest in infrastructure.

It will take considerable time to carry out development according to the DMIC Master Plan, even though early bird development projects have been set up in advance of finalizing the Master Plan. The Neemrana Industrial Park is one such project, and a smart factory project bolstered by the Japanese government is also moving forward, as explained later. Another early bird project is a free trade and warehousing zone planned for construction in the state of Haryana by Mitsui Bussan. This will create an inland container depot (ICD) to directly transport containers via high-speed railroads from ports to the ICD, and will enable customs clearance in inland areas. There are currently two ICDs, Dadri in Uttar Pradesh, and Tughlakabad in Delhi, although according to the DMIC Master Plan another ICD is expected to be built near Neemrana. The high-speed railway will not only be used to supply parts from Mumbai to Delhi, but is anticipated to significantly contribute toward regional economic development due to its role as the key distribution channel connecting the two large cities of Northern India and the medium-sized cities along its pat

 
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