The Alang Ship Recycling Yard takes advantage of the extreme high tides of the gulf. Large ships are beached during the twice-monthly highest tides, and are dismantled when the tide recedes.
The Gulf of Khambhat has been an important centre of trade since ancient times; its ports connect central India to the maritime trade routes of the Indian Ocean. Bharuch (Broach), Surat, Khambhat, Bhavnagar, and Daman are historically important seaports. Bharuch has been important since ancient times; Khambhat was the gulf's chief port in the Middle Ages, but after the silting of its harbor, Surat rose to prominence as the most important harbor of the Mughal empire.
In 2000, India's science and technology minister Murli Manohar Joshi announced that evidence of an ancient civilisation exists in the form of a large complex of man-made structures underwater in the Gulf of Khambhat. India's archaeological community rejected the claims as baseless and politically motivated.