Can Surat, among world's fastest-growing cities, be one of its most liveable?
Beneath Surat's soaring GDP lies rising inequality, overcrowding and urban strain. Will growth outstrip the city's capacity to sustain itself?
Oxford Economics, a leading independent economic advisory firm, has ranked Surat among the fastest-growing cities in the world between 2019 and 2035. The study, cited in the pre-Union Budget 2026 Economic Survey released by the government, top-ranks Surat among Indian cities, with an average annual Gross Domestic Product (GDP) growth rate of 9.17 per cent over the 2019-2035 period. The city’s economy is projected to expand from $28.5 billion in 2018 to $126.8 billion by 2035, measured at constant 2018 prices.
In the past five decades, Surat has gained much fame, and some infamy too, as being the global hub of diamond processing, with 90 per cent of the world’s diamonds (by volume) polished here. While diamond polishers poured into the city from water-starved villages of Saurashtra, the emergence of man-made textile processing and exports of both these labour-intensive manufacturing have earned it a high seat among the fastest-growing global cities. These industries scale quickly, reinvest profits locally and generate strong multiplier effects through ancillary units, logistics and services.
The city has developed on an interesting model of formalised capital-intensive family-owned businesses, with profits channelled back into machinery, automation and real estate within the city to avail its unique location and human resource ecosystem, rather than being extracted for diversification elsewhere. This sustains continuous expansion of productive capacity.
Thus, Surat absorbs large inflows of migrant labour, allowing firms to expand without labour shortages while steadily raising productivity through technology adoption. Surat’s population, estimated at 7.5 million akin to Ahmedabad’s, has grown more than 15 fold since 1961. Between 2001 and 2021 alone, the population increased by 4 million. According to estimates, more than half of Surat’s population today consists of migrants.
Reliable power supply, industrial water supply, proximity to the Hazira port and dense industrial clusters reduce logistics and transaction costs, enabling faster output growth than in more congested metros. Importantly, Surat’s GDP growth is amplified by a low base effect: starting from a smaller economic base in 2018, sustained 8-9 per cent growth compounds sharply over time.
Surat’s per capita income is estimated between Rs 3.7 lakh and Rs 6.2 lakh, nearly double the all-India average of Rs 1.7 lakh. Despite high per capita income, many workers earn modest wages, battling high inequality and uneven living standards. The incomes of thousands of billionaire diamantaires and textile barons tilt the average, and the data thus undermines the income disparity.
Neither does high GDP translate into quality of life for residents. In the Oxford Economics study, Surat ranks ‘weak to moderate’ for human capital, with lower scores on higher education density, global talent attraction and advanced skills. It ranks ‘below average’ for quality of life due to pressures from housing, congestion and urban amenities owing to migration-triggered overcrowding, leading to expansion of slums and substandard living conditions.
Rapid expansion on the back of industrial growth without sufficient environment compliance oversight, especially for the textile industry, has resulted in poor air quality, water contamination and public health risks. The city is heavily dependent on roads rather than mass transit. Its labour drives to work, leading to hours-long peak-time jams, resulting in lower productivity and health risks.
Moreover, much of the economy is exposed to global demand cycles, making Surat vulnerable to external shocks. The Surat Municipal Corporation’s budget, unveiled in the first week of February 2026, increased by Rs 593 crore to Rs 10,593 crore—the highest rise in the city’s history. Over Rs 900 crore is reserved for infrastructure development, with heavy investment in roads, bridges and transport to support industrial growth.
Surat’s economic momentum carries enormous promise, but whether its urban governance can match the speed of its growth and meet the rising needs and aspirations of its residents will ultimately determine if it evolves into a sustainable global industrial city or slides into the familiar trap of unmanaged, extractive urban expansion.
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Oxford Economics, a leading independent economic advisory firm, has ranked Surat among the fastest-growing cities in the world between 2019 and 2035. The study, cited in the pre-Union Budget 2026 Economic Survey released by the government, top-ranks Surat among Indian cities, with an average annual Gross Domestic Product (GDP) growth rate of 9.17 per cent over the 2019-2035 period. The city’s economy is projected to expand from $28.5 billion in 2018 to $126.8 billion by 2035, measured at constant 2018 prices.
In the past five decades, Surat has gained much fame, and some infamy too, as being the global hub of diamond processing, with 90 per cent of the world’s diamonds (by volume) polished here. While diamond polishers poured into the city from water-starved villages of Saurashtra, the emergence of man-made textile processing and exports of both these labour-intensive manufacturing have earned it a high seat among the fastest-growing global cities. These industries scale quickly, reinvest profits locally and generate strong multiplier effects through ancillary units, logistics and services.
The city has developed on an interesting model of formalised capital-intensive family-owned businesses, with profits channelled back into machinery, automation and real estate within the city to avail its unique location and human resource ecosystem, rather than being extracted for diversification elsewhere. This sustains continuous expansion of productive capacity.
Thus, Surat absorbs large inflows of migrant labour, allowing firms to expand without labour shortages while steadily raising productivity through technology adoption. Surat’s population, estimated at 7.5 million akin to Ahmedabad’s, has grown more than 15 fold since 1961. Between 2001 and 2021 alone, the population increased by 4 million. According to estimates, more than half of Surat’s population today consists of migrants.
Reliable power supply, industrial water supply, proximity to the Hazira port and dense industrial clusters reduce logistics and transaction costs, enabling faster output growth than in more congested metros. Importantly, Surat’s GDP growth is amplified by a low base effect: starting from a smaller economic base in 2018, sustained 8-9 per cent growth compounds sharply over time.
Surat’s per capita income is estimated between Rs 3.7 lakh and Rs 6.2 lakh, nearly double the all-India average of Rs 1.7 lakh. Despite high per capita income, many workers earn modest wages, battling high inequality and uneven living standards. The incomes of thousands of billionaire diamantaires and textile barons tilt the average, and the data thus undermines the income disparity.
Neither does high GDP translate into quality of life for residents. In the Oxford Economics study, Surat ranks ‘weak to moderate’ for human capital, with lower scores on higher education density, global talent attraction and advanced skills. It ranks ‘below average’ for quality of life due to pressures from housing, congestion and urban amenities owing to migration-triggered overcrowding, leading to expansion of slums and substandard living conditions.
Rapid expansion on the back of industrial growth without sufficient environment compliance oversight, especially for the textile industry, has resulted in poor air quality, water contamination and public health risks. The city is heavily dependent on roads rather than mass transit. Its labour drives to work, leading to hours-long peak-time jams, resulting in lower productivity and health risks.
Moreover, much of the economy is exposed to global demand cycles, making Surat vulnerable to external shocks. The Surat Municipal Corporation’s budget, unveiled in the first week of February 2026, increased by Rs 593 crore to Rs 10,593 crore—the highest rise in the city’s history. Over Rs 900 crore is reserved for infrastructure development, with heavy investment in roads, bridges and transport to support industrial growth.
Surat’s economic momentum carries enormous promise, but whether its urban governance can match the speed of its growth and meet the rising needs and aspirations of its residents will ultimately determine if it evolves into a sustainable global industrial city or slides into the familiar trap of unmanaged, extractive urban expansion.
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