Investors eye Tamil Nadu with renewed interest

Tamil nadu is india's second largest economy

Undoubtedly, 2020 was a year of despair and gloom. But Tamil Nadu was perhaps among the very few states that had sustained industrial growth despite Covid-19. In fact, the state had signed 80 MoUs with multiple companies drawing investments of over Rs 66,000 crore which could see the creation of over 121,000 jobs. 

The mega-deals across sectors last year has enabled the state to live up to its image as a favourite investment destination. A big beneficiary of the fresh investments is Oragadam, the industrial corridor of ‘New Chennai’, home to Fortune 500 giants and Indian MNCs. You can also find here one of the finest integrated townships in India, Hiranandani Parks.

The revised industrial policy signals Tamil Nadu’s intent to go all out to emerge as The Hub for investments, brisk industrial growth, and job creation. ‘We are reviving Tamil Nadu’s industrial policy based on benchmarking industry expectations and global trends,” says Dr Neeraj Mittal, MD &CEO, Guidance TN (nodal agency for investment promotion and facilitation). Tamil Nadu ranks #3 in Export Preparedness Index in the latest ranking by the center.

Popularly known as India’sDetroit, Tamil Nadu is India’s second-largest economy despite being its sixth most populous state and among the country’s 12 largest states. It has the third-highest GDP per capita and is the most urbanized state with a strong manufacturing base and a large services sector.

Tamil Nadu is now set to emerge as the capital for electronics manufacturing too and aims to contribute 25 percent of India’s total electronics export by 2025when the industry output is expected to touch $100 billion in the state.

Meanwhile, for the third consecutive year, Tamil Nadu registered a higher economic growth rate than the national average. At 8.03 percent, it was double the all-India average of 4.2 percent in 2019-20. The state’s per capita income in the same year was Rs 1,53,853, taking it from 12th place to sixth position now. 

The high growth rates and economic transformation along with significant progress on the social front, particularly in public education, social security, and health care, have led to inclusive growth and equipped the state with an educated and technically skilled workforce.

It should come as no surprise that the state has the highest number of factories in India – over 37,220 units– and the largest number of industrial workers! The mega plants and facilities that employ thousands of workers and professionals can be seen in Oragadam. Significantly, Tamil Nadu has a well-developed infrastructure with an excellent road and rail network and seven airports. Its coastline of 1,076 km is the second-largest in India dotted with four major ports and 22 non-major ports.  

The future is about to get even more exciting. A polymer park will be inaugurated soon near the Enmore port, and an Electric Vehicle park will come up soon. The state government is planning to set up two mega parks— for bulk drug pharma in Manallur and the other for medical appliances at Oragadam.

That’s not all. Nearly 25 industrial infrastructure projects are expected to be implemented within the next 24 months. Watch out for a new export promotion policy as well. A survey conducted by Projects Today revealed that Tamil Nadu has attracted more investments than any other state during the first quarter of 2020-21. Approximately Rs 3,500 crore worth of investments in the auto sector alone, most of which are located in Oragadam. Auto companies such as Daimler, BYD, and Mando have signed MoUs for expanding their manufacturing facilities in the state.

What is working in Tamil Nadu’s favor is its rich ecosystem, last-mile connectivity, port logistics, advanced transportation systems, and supply of high-quality workforce. Experts say the new policy could be a game-changer and make the state the top destination for investors, domestic as well as global.

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