Once celebrated as the “Iron Bird of Asia” for its thriving foundries, Batala now stands as a stark reminder of industrial stagnation. This city, once a bustling hub of economic activity and innovation, is struggling to keep pace with rapid technological advancements and industrial growth.
In the pre-Independence era, Batala played a pivotal role in laying the groundwork for the industrial revolution in Punjab. The post-Independence years initially saw a boom in commerce and trade, with local industries flourishing and investments yielding impressive returns. Batala’s prosperity was so notable that it became known for its lavish Punjabi weddings, a testament to its economic success.
However, the city’s fortunes began to wane in the late 1970s, when insurgency and violence gripped Punjab. The conflict led to prolonged factory shutdowns and a significant economic downturn. The government’s decision to elevate Batala to a separate police district was both an attempt to curb the unrest and an acknowledgment of the city’s deteriorating condition.
The situation was further compounded in 1992 when then-Finance Minister Dr. Manmohan Singh abolished the Freight Equalisation Policy (FEP). This policy, which had been in place since 1948, had enabled industries to buy raw materials at subsidized rates, fostering growth in regions like Batala. With its removal, local industries struggled with increased costs, rendering them less competitive compared to counterparts in regions benefiting from subsidies.
Batala’s challenges were exacerbated by a policy shift favoring industries located within 30 kilometers of the International Border, while only 10 percent of the city fell within this radius. This exclusion forced the majority of Batala’s industries to grapple with high operational costs and competitive pressures. Parmjit Singh Gill, president of the Industrial Estate Factories Association, advocates for extending this distance to 50 kilometers, which he believes could provide much-needed relief through exemptions from GST and electricity duties.
The decline has been stark. From nearly 2,000 industrial units in 1980, only 250 to 300 remain. Key sectors such as farm implements and hand tools have been particularly hard-hit. The once-thriving businesses in sports goods, galvanised pipes, and aluminum doors are now struggling to survive.
Compounding the problem, Batala’s railway connectivity issues have further isolated its industries. Products must first be transported to Amritsar, 40 kilometers away, before reaching their final destinations. This logistical inefficiency erodes profit margins and hampers competitiveness. The proposed Qadian-Beas railway link could alleviate some of these issues, but it remains unrealized.
Ravinder Handa, a prominent businessman and general secretary of the Industrial Estate Factories Association, warns that Batala is at risk of becoming a “haunted town” if current trends continue. The city has been experiencing a negative growth rate for the past three decades.
To address these challenges, local industrialists are calling for comprehensive measures from both the state and central governments. Vinesh Shukhla of the Laghu Bharat Udyog suggests that tax concessions similar to those offered in Jammu & Kashmir and Himachal Pradesh, as well as the establishment of defense industrial corridors, could revitalize Batala’s economy.
The city’s once-dominant industrial units, including Khalsa Foundry, Macro Foundry, and Neelam Iron Foundry, have either shut down or relocated to more favorable business environments. Additionally, competition from Chinese and Korean imports has further undermined local industries, which previously enjoyed a near-monopoly in farm implements and machinery.
As Batala grapples with these challenges, the need for strategic interventions and supportive policies becomes increasingly urgent. Without concerted efforts from both state and central authorities, the city risks losing its industrial heritage and slipping further into economic decline.
