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India By State - Chhattisgarh - Business Opportunities

Business Opportunities



Chhattisgarh is India's Youngest and one of the fastest growing States. With a advantageous labour environment, cheap power, sufficient water resources, and availability of land at lower cost, Chhattisgarh is a favourable location for industrial investments. Some of the key thrust sectors where Chhattisgarh holds advantage over other states are Mining, Power, Cement, Iron ore and Steel.

The state has a substantial share of India's coal, iron-ore, bauxite, and limestone reserves. In all, 28 varieties of minerals are found in the state. The key sectors of Chhattisgarh's economy are cement, mining, steel, aluminum and power.

The state has recognized infrastructure provisioning as an industry and has drawn up an Infrastructure Development Action Plan to facilitate timely development of physical infrastructure in the state.

Chhattisgarh's large coal reserves present a large opportunity for electricity generation in the state. The state also offers opportunities for investment in infrastructure development.

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Key Industries


Chhattisgarh has rich mineral resources and a major resource base for major mineral-related industries. The mineral industry accounts for about 80 per cent of total industrial units in Chhattisgarh.

In terms of Mineral wealth, Chhattisgarh is the richest State in India with 28 varieties of major minerals, including Diamonds. As well as being the only State in India to have Tin Ore reserves, Chhattisgarh also holds major shares of Coal deposits in India, and this is what triggered its 'Power Hub' reputation. Over one-fifth of Iron-ore in the country is mined here, and one of the best quality iron-ore deposits in the world is found in the Bailadila mines in south of the state, from where it is exported to significant industrial countries such as Japan.

The fact that an abundant amount of Bauxite, Limestone, Dolomite, and Corundum deposits are found in the State, Chhattisgarh can afford to offer the lowest cost of production of end products such as Cement and Aluminium.

The government puts great focus on the beneficiation and processing of these minerals. Mining has evolved as an emerging sector adding remarkable state revenue, adding to the growth and development of the state.


Chhattisgarh has had a robust power sector since its inception and is now regarded as a power surplus state with a lot of potential for industrial growth.

The surplus power can be easily transmitted to all the four major grids of the country. Chhattisgarh has improved its power generation capacity of 1,410.85 MW in 2005-06 from 1,360.2 MW in 2000.

A lot of business opportunity is felt in the field of power generation, transmission, and distribution in Chhattisgarh. The private players have been attracted to this sector mainly on account of the liberal policy of the government with regard to captive generation. As per Power Finance Corporation Ltd, Chhattisgarh has the potential of 61000 MW of additional Thermal power (due to availability of coal) and more than 2500 MW of Hydel capacity.

NTPC has an installed thermal capacity of 2100 MW while the State Electricity Board units have a Thermal capacity of 1280 MW and Hydel capacity of 130.85 MW. Apart from NTPC and CSEB, there are a number of private generation units of large and small capacity operating in the State.


Widely occurring Limestone reserves throughout the State provide Chhattisgarh with a lucrative opportunity for cement production at the most competitive prices. In total there are 3,580 limestone reserves throughout the State, contributing 4.73% to total limestone reserves across India. There are 9 major and 12 minor cement units currently present within the State, with the majority of the cement production units concentrated in the Raipur area.

The Raipur- Bilaspur belt is full of raw materials suitable for cement production. Along with vast natural resource, industries also find ample human resource. The state government also offers several concessions for the growth and development of the industry, creating employment and contributing to the welfare of the people. During 2006-07, Cement production grew by 13 per cent in Chhattisgarh.

Iron-ore and Steel

Chhattisgarh is the Iron and Steel Hub of the country. The Bhilal Steel Plant of Steel Authority of India Ltd (SAIL) produces over four million tonnes of iron and steel per annum. Substantial capacities have also been set up in the private sector.

28 percent of India's sponge iron production comes from Chhattisgarh. There are approximately more than 10,000 Iron-ore reserves out of which the State contributes more than 23 percent of the production in the company.

The State currently ranks 3rd among all the iron-ore producing states in India. In 2005-06, approximately 25.5 million tonnes of Iron ore amounting to around US $280 million (INR 1153.59 Crores) was produced in the state. In 2007-08, the state produced 31.6 million tonnes of iron ore.


Chhattisgarh, situated in the heart of India, is endowed with a rich cultural heritage and attractive natural diversity. The State is full of ancient monuments, rare wildlife, exquisitely carved temples, Buddhist sites, palaces, water falls, caves, rock paintings and hill plateaus. Most of these sites are untouched and unexplored and offer a unique and alternate experience to tourists compared to traditional destinations which have become overcrowded.

With 12% share of India's forests, Chhattisgarh's 3 National Parks and 11 Wildlife Sanctuaries and National Parks are a major attraction. It has several virgin attractions in protected areas such as Kanger Valley National Park, Barnawapara, Sitanadi, Udanti and Achanakmar Sanctuaries. Natural attractions are being promoted with increased local participation and encouragement to herbal gardens and natural health resorts. Mainpat (Surguja), Keshkal valley (Kanker), Chaiturgarh (Bilaspur), Bagicha (Jashpur), Kutumbsar caves, Kailash caves, Tirathgarh falls, Chitrakot falls (Bastar) are all exhilarating destinations being promoted for nature and wildlife tourism. Wildlife areas, camping grounds and trekking facilities would be few of the prime attractions.

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Key Players

Associated Cement Companies Ltd (ACC)

Associated Cement Companies is one of India's largest cement manufacturing companies, with a cement production capacity of 16 million tonnes per annum. Apart from cement, ACC is also India's largest refractory manufacturer and supplier, the largest research and consultancy organisation in the Indian cement sector, and a pioneer in the area of advanced materials. ACC has a cement plant with 1.58 million tonnes capacity at Jamul in Korba district.

Bharat Aluminium Company (BALCO)

Bharat Aluminium Company is one of the largest producers of aluminium in India. Till 2001, the government divested 51 per cent of its equity and management control in favour of Sterlite Industries (I) Ltd at a cost of USD 123 million. Today, BALCO is an integrated aluminium company with captive bauxite mines, a captive power plant, refineries and smelters. BALCO's plant at Korba in Chhattisgarh produces 100,000 tonnes of aluminium every year. Its captive power plant has a capacity of 270 MW to meet its own requirement. Currently, BALCO is executing a USD 863 million expansion plan to increase its aluminium production capacity from 100,000 tonnes per annum to 345,000 tonnes per annum. It is also setting up a 540 MW electricity generation plant for captive consumption. The expansion project shall be completed by 2006.

De Beers

De Beers is the flagship company of De Beers, South Africa, which is the largest diamond mining company worldwide. De Beers is committed to the discovery of new world-class diamond mines in India. The company was first granted reconnaissance permits in India at the end of 2000 and active exploration commenced in early 2001.To date this exploration work has led to the discovery of more than 20 new kimberlite deposits in four states, which are currently undergoing appraisal for diamond content. De Beers India's exploration investment in India to date has been approximately USD 10 million with planned expenditure in 2005 budgeted at USD 7.7 million. Chhattisgarh is one of the principal regions of interest for De Beers in India.

Grasim Industries Ltd

Grasim Industries is the flagship of the AV Birla Group, one of the most prominent Indian business houses. Grasim is the world's eighth largest cement producer, and the largest in a single location. The Group has cement operations spanning the length and breadth of India, with 11 composite plants, seven split grinding units, four bulk terminals and seven ready-mix concrete plants. With a combined capacity of 13.12 million tonnes per annum, Grasim is among the largest producers of grey cement in India. Two of its units are located at Jawad and Raipur in Chhattisgarh. All of Grasim's units have earned ISO 9002 and 14001 certifications. Grasim's other businesses include Viscose Staple Fibre (VSF), sponge iron, chemicals and textiles.

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Gujarat Ambuja Cement Ltd (GACL)

Gujarat Ambuja Cement Ltd is India's third largest cement producer, with a capacity of 12.5 million tonnes and revenue in excess of USD 531 million. The company's plants are some of the most efficient in the world. They also have environment protection measures that are at par with the finest in the world. In Chhattisgarh, Gujarat Ambuja has a facility producing 1 million tonnes of cement per annum in Bharatpura.

Jindal Steel and Power Ltd (JSPL)

Jindal Steel and Power Ltd, part of the Jindal group, is among the largest coal-based sponge iron manufacturers in India. It has a 24 per cent market share in this product segment. JSPL also sells electricity to the Chhattisgarh State Electricity Board. In 2003-04, JSPL's net sales stood at USD 315 million. JSPL has the world's largest coal-based sponge iron plant at Raigarh in Chhattisgarh with an installed capacity of 6, 50,000 MPTA. JSPL's growth plans include expanding the finished steel making capacity to 2.9 million tonnes per annum by March 2006. A USD 270 million project envisages setting up of a coke oven battery and a sinter plant as supporting facilities. The company also plans to set up a 1000 MW power plant.

Lafarge India

Lafarge India is a part of the Lafarge Group, the world's leading cement and construction material company. Lafarge India has a total cement manufacturing capacity of 5 million tonnes per annum. In Chhattisgarh, Lafarge has two cement manufacturing plants at Sonadih and Arasmeta with a capacity of 2 million tonnes per annum. Lafarge India plans to invest USD 70 million for setting 50 MW coal-based captive power plants for two of its units. It also plans to set up a railway siding for its plant at Sonadih in Chhattisgarh, which will connect it with Bilaspur railway station.

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National Thermal Power Corporation (NTPC)

National Thermal Power Corporation is India's largest power utility and the sixth largest thermal power generator in the world. In 2003-04, the company had an installed capacity of 19.4 per cent in India and produced 27 per cent of total electricity generated in the country. One of its largest plants, with an installed capacity of 2,100 MW is located at Korba in Chhattisgarh. NTPC is currently implementing India's largest coal based electricity plant at Sipat in Chhattisgarh. The plant will have an installed capacity of over 3,000 MW and is expected to cost over USD 1,800 million.

Steel Authority of India (SAIL)

Steel Authority of India is India's largest steel producer. The Government of India holds 86 per cent equity stake in the company. SAIL's operating income in 2003 stood at US $ 3.8 billion. SAIL has a steel plant at Bhilai with a capacity of manufacturing 3.6 million tonnes per annum of saleable steel. It is India's sole producer of rails and heavy steel plates. The steel plant at Bhilai is an ISO 9001:2000 unit. It has also received the ISO-14001 certification for its environment management systems. In August 2004, SAIL announced plans to increase the capacity of Bhilai Steel Plant to over 7 million tonnes per annum. The company plans to invest USD 5.5 billion up to 2012 in its integrated steel plants plans. SAIL also proposes to spend USD 950 million on immediate priority schemes to be completed by 2006-07.

National Mineral Development Corporation (NMDC)

National Mineral Development Corporation is India's single largest iron-ore producer and exporter. It currently produces 15.75 million tonnes of iron-ore from its three fully mechanised mines in Chhattisgarh. A public sector enterprise, NDMC currently operates two mines in Bailadila in Chhattisgarh. Iron-ore from this region is known to be super high grade having over 66 per cent iron content, free from sulphur and other deleterious material and the best physical properties needed for steel making. To meet the growing demand for iron-ore, the company is planning to open new mines in the Bailadila sector and a new iron-ore mine at Kirandul in Dantewada district. NDMC is the largest exporter of iron-ore in the country.


Export Profile of Chhattisgarh

Over 17 percent of companies within the State are engaged in exports. Major products which are exported are Rice, Cement, Steel and Forest products. 83 percent of the companies in Chhattisgarh sell their products in the domestic market.

However, it has been observed that many companies book their products for export through other States, but the opening up and operation services of International Container Depot (ICD) in Raipur should reverse this trend.

Generally, the volume, value and number of orders for exports are all showing a favourable upward trend and are expected to register higher growth in the future.

Nearly 75 percent of exports emanate from Bhilai, and the remaining from Urla, Bhanpuri, and Sirgitti etc. Major exportable products of the State, are Steel, Handicrafts, handlooms, Blended Yarn, Food/Agri products, Iron, Aluminium, Cement, Minerals and Engineering products.

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Investment Climate

Rich Natural Resources

Relatively Low Land Cost

The abundance of minerals found in the Chhattisgarh, serves as the State's biggest advantage. Rich deposits of Limestone, Iron-ore, Copper-ore Rock Phosphate, Manganese-ore, bauxite, Coal, Asbestos and Mica are all found here. In fact, combined with Orissa and Jharkhand, these States together constitute for 80 percent of the Nation's coal reserves. Diamond reserves are also found here, and are expected to be a source of huge income for the State in the near future. With a lower population density and urbanisation rate, the State is able to offer land at extremely competitive prices.

Surplus Power

Fiscal Position

As one of the few States with surplus power, an incentive for industrialists making project decisions is provided. Presence of low grade coal makes this State an ideal location for setting up low cost pit head based thermal Power Plants, capable of generating power to meet the requirement of other States. The fiscal deficit situation of the State is currently under control. It also has reliable sources of public finance and possesses no deficit on account the State Electricity Board or Road Transport Corporation.

Favourable Labour Climate

Political Environment

Though the skill-base is relatively low, the presence of a large number of willing and able-bodied people contributes to a substantial workforce. The State has a high worker participation rate (male and female) and a high labour force in the 15-39 Age group. It also has one of the lowest losses in person-days attributed to labour problems in the country. Lesser number of bureaucrats and government and government employees compared to the other States in the country. This has also resulted in one of the lowest expenditures of the country on government functioning. The presence of a strong committed and focused leadership is a key asset to the State.

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More Information on Chhattisgarh

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