Best Cities in Gujarat to Launch a Startup – Ahmedabad, Surat, or Rajkot?

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  By Gujju Ticks

  16 May, 2025

India's western province of Gujarat is familiar with enterprise and entrepreneurship. Famous for being an industrious state with an entrepreneurial environment, Gujarat is quickly becoming a startup hub outside of the typical metros of Bengaluru and Mumbai. Its dynamic cities, out of which Ahmedabad, Surat, and Rajkot have become places to watch as hotspots to start new ventures, make it a tough choice to select the ideal city in Gujarat to start your startup.

Let's go through an in-depth comparison based on key parameters like infrastructure, government policies, talent pool, cost of living, and industry presence to guide you to the right choice.

1. Ahmedabad – Gujarat’s Startup Powerhouse

Why Ahmedabad is a top choice for startups:

Ahmedabad, Gujarat's former capital, is one of India's fastest-growing cities. It boasts a strong infrastructure, good educational institutions, and connectivity to both traditional business acumen and modern tech-savvy brains, making Ahmedabad a preferred destination for business startups by entrepreneurs in Gujarat.

Key Advantages:

• Startup Ecosystem: Abode of iCreate, CIIE (Centre for Innovation Incubation and Entrepreneurship) at IIM Ahmedabad, and GUSEC (Gujarat University Startup and Entrepreneurship Council), the city boasts institutional support for startups.

• Educational Talent Pool: High-end institutes such as IIM Ahmedabad, NID, and DAIICT provide a constant stream of qualified graduates and creative minds.

• Funding and Mentorship: Availability of angel investors, VC firms, and an entrepreneurial network provides ease in raising early-stage capital.

• Connectivity: Sardar Vallabhbhai Patel International Airport provides domestic and international connectivity essential for scaling businesses.

Industries Thriving in Ahmedabad:

Ahmedabad is perfect for fintech, edtech, agritech, healthcare, and manufacturing startups. The city's location near industrial belts and mix of old-money business families and new-age tech minds provides a rich breeding ground for innovation.

Drawbacks: Higher cost of living and real estate prices vis-a-vis other Gujarat cities. Traffic snarls and pollution are growing concerns.

2. Surat – The Emerging Diamond in the Startup World

Commonly referred to as the "Diamond City of India," Surat is a city with many more strings to its bow than being a global diamond cutting and textile hub. With mushrooming urbanization, growing digital penetration, and entrepreneurial culture, Surat is fast emerging as a startup budding star.

Why Consider Surat?

• Economic Strength: Surat strongly contributes to India's GDP in terms of textiles, diamonds, and petrochemicals. Its commercially oriented mind makes Surat a great place for B2B startups and SMEs.

• Fast-Growing Infrastructure: Surat is a rapidly growing Tier-2 city. Smart City initiatives and metro construction increase its urban skyline.

• Lower Operational Costs: Relative to Ahmedabad, office spaces, accommodations, and labor are cheaper, decreasing your startup's burn rate.

• Digital Readiness: Surat is high on digital literacy and internet penetration, the perfect place to start tech-enabled services.

Strong Sectors for Startups:

Textile technology, logistics, D2C brands, e-commerce, and SaaS services with verticalised capabilities for small-scale manufacturers are picking up speed in Surat. Fintech and insurtech are increasingly popular among the young business class in the city as well.

Constraints: Surat doesn't yet have the type of institutional startup incubators that exist in Ahmedabad. Talent retention becomes a problem because most professionals want to move to metros.

3. Rajkot – A Manufacturing Marvel Ready to Innovate

Rajkot, typically a conservative industrial city, is changing. With its engineering industries, Rajkot presents special opportunities for startups in manufacturing tech, hardware, and automobile ancillary services.

What Makes Rajkot Unique?

Industrial Base: The city has deep roots in machine tools, foundries, and automotive components. An ideal place for Industry 4.0 startups, manufacturing IoT, or automation services.

• Affordability: Of the three cities, Rajkot has the cheapest living and office rent, perfect for bootstrapped startups.

• Supportive Policies: Government programs such as MSME subsidies and Gujarat's Startup Policy assist nascent businesses in obtaining grants and incentives.

• Community Support: Its entrepreneurs get the benefit of a compact business community ready to lend support to new ideas, particularly in family-oriented industries.

Startup Potential:

Ideal for hardware startups, cleantech technologies, and manufacturing automation platforms. Rajkot is gradually picking up pace in tech and digital industries, due to rising internet penetration and mobile phone usage.

Challenges: Insufficiency of high-quality business accelerators, fewer educational institutions dedicated to tech, and comparatively restricted access to venture capital.

Government Support & Gujarat Startup Ecosystem

Gujarat is one of India's best states to do business. Gujarat Startup Mission provides seed funding, financial grants, and mentorship. Ahmedabad and Surat have startup cells and co-working spaces dedicated to their startups.

Highlights of Gujarat’s Startup Policy:

• Seed funding up to Rs. 30 lakh

• One-year sustenance allowance of Rs. 10,000/month

• Patent filing assistance and marketing support

• Government-run incubators and co-working spaces

With state-wide connectivity, low-power tariffs, and limited red tape, Gujarat's business-friendly policies are perfect for entrepreneurs.

Conclusion: Which City Wins?

Choosing between Ahmedabad, Surat, and Rajkot depends on your startup’s nature, scale, and long-term vision.

Final Tip:If your startup is technology-intensive and requires institutional backing, Ahmedabad is the place to be. For rapid scaling B2B and commerce-led models, Surat provides a good platform. In case your innovation is manufacturing, Rajkot offers unparalleled affordability and industrial networks.

FAQs:

Q1. Is Gujarat an ideal place to start a startup?

Yes, Gujarat has business-friendly policies, great infrastructure, and robust support for entrepreneurs.

Q2. Which city provides the best funding opportunities in Gujarat?

Ahmedabad, being close to IIM-A and VC networks, has the greatest availability of early-stage capital.

Q3. Is it less expensive to operate a startup in Rajkot compared to Ahmedabad?

Yes, there is a much lower cost of living and office rentals in Rajkot.