‘Vibrant Gujarat’ bubble bursts: 8,000 small industries shut Down in 5 years, Ahmedabad Hit Hardest

The Vibrant Gujarat summit, organised with massive investment, often projects an image of a state advancing rapidly in the industrial sector and creating more job opportunities for educated youth. However, numbers show a different reality. According to a central government report, the narrative surrounding the summit has come under scrutiny as more than 8,000 Micro, Small and Medium Enterprises (MSMEs) have shut down in the state over the past five years.

Gujarat is recognised as one of India’s leading industrial states and several policies have been announced to promote industry. However, the rising  closure rate of MSMEs, often considered as the backbone of the economy and employment generation is becoming a serious concern.

While the Government of India is actively promoting the “One District, One Product” (ODOP) initiative, many local industries that represent the identity of various districts are disappearing. Gujarat currently ranks among the states with the highest number of industrial closures, sparking intense debate.

Small and medium industries play a crucial role in providing employment at the local level and preventing migration. However as  many of these units  continue to shut down, significant concerns are being raised within industrial circles regarding the adequacy of current support measures and the strategies needed to sustain these vital enterprises.

Ahmedabad most affected

In the financial year 2025–26, Ahmedabad recorded the highest number of MSME closures among districts in Gujarat. During this period alone, 1,242 MSME units shut down, while a total of 3,106 units have shut down in the city over the last five years.

Following Ahmedabad is the ranking of most-affected districts, Surat ranks second, followed by Rajkot, Vadodara, and Valsad.

The accelerating rate of these shutdown of small industries has sparked serious concerns regarding the future of local employment and the overall sustainability of Gujarat’s industrial growth model.