West Bengal can significantly accelerate its industrialisation by adopting a cluster-based, technology-intensive and export-oriented manufacturing strategy, according to a new report by the PHD Chamber of Commerce and Industry (PHDCCI) released on Wednesday, 19 August. The report, titled 'West Bengal: Mapping Agriculture and Industrial Investment Opportunities', argues that the state's existing strengths in engineering, electronics, logistics, ports, skilled manpower and natural resources provide a ready foundation for building integrated manufacturing and export clusters.

Key Findings of the PHDCCI Report

The report calls for a strategic shift — away from simply expanding production capacity and toward deepening value chains, upgrading technology, and connecting local industries with national and global markets. It identifies the state's geographic position, bordering Bangladesh, Nepal, Bhutan and with proximity to Southeast Asia, as a structural export advantage that remains underutilised.

According to the report, West Bengal's Gross State Domestic Product (GSDP) rose from ₹6.10 lakh crore in FY2015-16 to ₹9.42 lakh crore in FY2024-25, recording a Compound Annual Growth Rate (CAGR) of around 4.95 per cent. Gross State Value Added (GSVA) grew at approximately 5.26 per cent over the same period.

Industry's Share and the Manufacturing Gap

Despite this headline growth, the sectoral composition reveals a structural imbalance. Services accounted for an average 42 per cent of GSVA during the period, while industry contributed only around 23 per cent. The report flags this as considerable scope for expanding manufacturing alongside the state's growing services and knowledge economy — in effect, the industrial base has not kept pace with overall economic expansion.

Notably, this pattern mirrors a national challenge: India's manufacturing share of GDP has hovered near 17 per cent for over a decade despite repeated policy targets of 25 per cent. West Bengal's own industrial underperformance is, in that sense, a microcosm of a broader structural gap.

Human Capital and Institutional Strengths

The report identifies human capital as one of West Bengal's most significant comparative advantages. Premier institutions including IIT Kharagpur, Indian Statistical Institute (ISI) Kolkata, IIM Calcutta, IIEST Shibpur and Jadavpur University collectively provide a strong technical and research ecosystem. The state's literacy rate stood at approximately 85 per cent in 2024-25, above the national average.

PHDCCI President Rajeev Juneja said the central opportunity lies in converting existing advantages into action. 'The report concludes that West Bengal has a substantial base for accelerating industrialisation and investment. It identifies the key opportunity as converting the State's existing natural, human, industrial and logistical advantages into integrated, investment-ready manufacturing and export clusters,' Juneja said.

What Needs to Happen Next

The report stops short of prescribing a specific investment outlay or government spending target, instead calling on policymakers and industry to co-develop cluster frameworks across sectors such as engineering goods, electronics, and agro-processing. Industry bodies and state authorities will need to align on land, logistics and incentive structures for the cluster model to gain traction.

With the Bengal Global Business Summit serving as an annual investment platform, the PHDCCI findings could feed directly into the state's next investment pitch cycle. Whether the report's recommendations translate into on-ground cluster development will depend on execution — a challenge West Bengal, like many Indian states, has historically struggled with.