Introduction
Tamil Nadu is the fourth-largest state of India. Located on the southern coast of India, Tamil Nadu is surrounded by Andhra Pradesh on the north, Karnataka and Kerala on the west, Indian Ocean on the south, and Bay of Bengal on the east.
Tamil Nadu has a diversified manufacturing sector and features among the leaders in several industries like automobiles and auto components, engineering, pharmaceuticals, garments, textile products, leather products, chemicals, plastics, etc. It ranks first among the states in terms of the number of factories and industrial workers.
At current prices, Tamil Nadu’s gross state domestic product (GSDP) is estimated to be Rs. 31.55 trillion (US$ 372.42 billion) in 2024-25 and increase at a CAGR of 11.63% between 2018-19 and 2024-25.
In 2020-21, the tertiary sector contributed 54.33% to the state’s Gross State Value Added (GSVA) at current prices, followed by the secondary sector at 32.72%.
According to DPIIT, cumulative FDI inflow in Tamil Nadu stood at US$ 43.17 billion between April 2000-June 2024.
In September 2021, the UAE-based DP World announced an investment of Rs. 2,000 crore (US$ 271.68 million) to establish numerous projects in Tamil Nadu. These projects include a container terminal, cold storage and seafood processing zone, free trade zone with an integrated rail siding, minor port in the Eastern Coast of Tamil Nadu and inland container depots in Erode, Karur and Tiruppur.
In July 2021, Tamil Nadu exchanged 35 memorandums of understanding (MoUs) with a cumulative investment of Rs. 17,141 crore (US$ 2.33 billion) and employment opportunities for 55,054 people. These investments are in the fields of power plants, electronics, auto components, industrial parks, IT/ITeS services, food processing, footwear, pharmaceuticals, and textiles.
Between the second quarter and third quarter of FY21, the state received new investments of ~Rs. 61,000 crore (US$ 8.3 billion). Of this, some key private investments included Rs. 4,629 crore (US$ 631 million) solar photovoltaic modules project by SunEdison Energy India; Rs. 2,500 crore (US$ 341 million) lithium-ion batteries project in Tiruvallur by Lucas-TVS, and a Rs. 2,300 crore (US$ 314 million) plant being set up by Daimler India Commercial Vehicles at Oragadam.
Total merchandise exports from the state stood at US$ 40.65 billion in FY23, US$ 43.56 billion in FY24 and US$ 19.56 billion in FY25 (Until August). The state exported key items such as Engineering Goods, Electronic Goods, Ready-made garments of all textiles, Cotton Yarn/Fabs./Madeups, Handloom Products, Leather And Leather Manufactures, Petroleum Products, Organic and Inorganic Chemicals.
Tamil Nadu has a well-developed infrastructure with an excellent road and rail network, three major ports, 15 minor ports, and eight airports across the state providing excellent connectivity.
As of FY25 (April to August), the state had a total installed power generation capacity of 40.73 GW.
Thermal power contributed 15,970.03 MW to the total installed power generation capacity, followed by renewable power (21,141.47 MW), hydropower (2178.20 MW) and nuclear power (1448.00 MW).
Private sector, with a capacity of 27,178.34 MW, was the biggest contributor to the total installed power generation capacity in Tamil Nadu, followed by state utilities (7,144.98 MW) and central utilities (6,414.38 MW).
Recent Developments in Key Sectors
- Tamil Nadu has received one of the highest railway budget allocations among all states, amounting to Rs. 6,362 crore (US$ 0.76 billion). The state also introduced six Vande Bharat trains and the development of 77 model Amrit Rail stations, highlighting the state's significant investment in enhancing its railway infrastructure.
- Tamil Nadu got an outlay of Rs. 6,331 crore (US$ 764.61 million) for various rail development projects during the fiscal 2024-25.
- SIPCOT (State Industries Promotion Corporation of Tamil Nadu Limited) will develop an Integrated Textile Park, spanning 111 Acres in Salem district with an estimated investment of Rs. 800 Crore (US$ 96.62 million).
- A 3-storey industrial complex, spanning 5 Acres will be developed at Sakkimangalam Industrial Estate in Madurai district by TANSIDCO (Tamil Nadu Small Industries Development Corporation Limited) at Rs. 118 Crore (US$ 14.25 million).
- On October 20, 2022, the Tamil Nadu School education department conducted counselling sessions for the students who are yet to join higher education courses, including those who failed their Class 12 exams.
- In October 2022, Tourism Minister Mr. M. Mathiventhan stated that to boost tourism, the Tamil Nadu Tourism Department had identified revenue land close to forests in 10 districts for glamping and adventure sports.
- In September 2022, Mr. Sarbananda Sonowal, Minister of Ports, Shipping & Waterways and AYUSH, inaugurated projects worth Rs. 231.21 crore (US$ 28 million) at the V.O. Chidambaranar Port Authority in Tamil Nadu.
- According to Health Minister Mr. Ma Subramanian, all 11 new government medical colleges opened in Tamil Nadu in 2021 will soon have 700-bed hospitals each with specialty and super specialty departments.
- According to the Good Governance Index 2021, Tamil Nadu ranked first in terms of judiciary and public safety.
- The state ranked fourth in NITI Aayog’s ‘Export Preparedness Index 2021’, which assesses states on parameters such as policy, business ecosystem, export ecosystem and quantum of exports.
- In May 2022, Prime Minister Mr. Narendra Modi on Thursday laid the foundation stones for the redevelopment of five Railway stations in Tamil Nadu - Chennai Egmore, Rameswaram, Madurai, Katpadi, and Kanyakumari, at a total cost of Rs. 1,800 crore (US$ 218.53 million).
- In May 2022, Mr. M Madhiventhan, the State Tourism Minister, made a bunch of tourism-related announcements:
- Construction of a ‘Spiritual and Cultural Eco-park’ on the East Coast Road, in collaboration with the Department of Hindu Religious and Charitable Endowments Department (HR and CE), at a cost of Rs. 1.5 crore (US$ 193,362).
- Every year, in partnership with the state horticulture department, a summer festival including flower, fruit, vegetable, and palm goods exhibition and show would be held in Chennai at a cost of Rs. 25 lakh (US$ 32,227).
- In Chengalpattu, the Poondi reservoir and the Kolavai Lake will be developed as a tourist destination with activities including as water sports, boat rides, adventure activities, and bird watching decks.
- In May 2022, Southern Railway announced that it will set up solar power plants at 18 stations in northern Tamil Nadu to reduce emissions.
- In May 2022, Acme Solar Holdings Ltd announced that it was planning to set up an integrated seven gigawatt (GW) renewable energy and green ammonia production facility in Tamil Nadu at an estimated cost of about US$ 6 billion.
- In April 2022, Chief Minister Mr. M K Stalin stated that Tamil Nadu had signed 130 MoUs worth a total investment of Rs. 68,375 crore (US$ 8.3 billion), which has the potential to create jobs for over 2.05 lakh people.
- In September 2021, Minister for Rural Industries, Mr. TM Anbarasan, announced that four industrial estates will be established across Tamil Nadu to ensure balanced growth across the state. The industrial estates will be developed by the Tamil Nadu Small Industries Development Corporation (Tansidco) at Manapparai in Tiruchirappalli district, Kaverirajapuram in Thiruvallur district, Kodur in Chengalpattu district and Sakkimangalam in Madurai district, across a total of 394 acres at a project cost of Rs. 218.22 crore (US$ 38.20 million), and which is expected to generate 7,000 jobs.
- In September 2021, the state government announced that the 144 km Coimbatore metro rail project will be completed at a cost of Rs. 6,300 crore (US$ 855.79 million) through Coimbatore Trichy Road, Avinashi Road, Sathyamangalam Road, Mettupalayam Road and Corporation Roads.
- In August 2021, the state government announced the ‘Chief Minister Road Improvement Scheme’ to widen roads connecting the taluk headquarters and the district headquarters in the next 10 years. The government will spend Rs. 3,200 crore (US$ 434.69 million) in FY22 to widen roads to two-lane and four-lanes to facilitate free movement of traffic.
- In February 2021, Prime Minister Mr. Narendra Modi flagged off the Chennai Metro Rail Phase-1 extension from Washermanpet to Wimco Nagar, built at a cost of Rs. 3,770 crore (US$ 519.78 million). The 9.05-kms extension of the Chennai Metro will connect North Chennai with the airport and Chennai Central Railway Station. He also inaugurated the fourth railway line between Chennai Beach and Attipattu. The 22.1-km stretch, constructed at a cost of Rs 293.40 crore (US$ 40.45million), passes through Chennai and Thiruvallur districts.
- The state had 54 operational SEZs for IT/ITeS as of January 2024.
- Tamil Nadu is the largest producer of cotton yarn, accounting for 41% of India’s production. During October-September 2019-20(E), the state was estimated to produce 600,000 bales** of cotton.
- Software exports from Tamil Nadu have reached an all-time high of $ 4.8 billion surpassing all other states in the country as of October 31, 2023.
- As of March 2019. IT & ITeS export from Tamil Nadu increased to Rs. 1.39 lakh crore (US$ 19.9 billion) in 2018-19 at a growth rate of 10% YoY.
- Tamil Nadu has a thriving tourism sector and ranks first in India in terms of number of domestic tourist arrivals and sixth in foreign tourist arrivals in 2021.
FACTFILE
Capital
ChennaiGeographical Area (sq km)
130,058State Language
Tamil and EnglishLiteracy Rate
80.09 per centKey Industries:
Textiles
Automobile and auto components
IT and ITeS
Heavy commercial vehicles
Cement
Banking
Financial services
Drugs and pharmaceuticals
Agro and food processing
Leather tanning industries
Electronic hardware
Tourism
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