Tamil Nadu is the fourth-largest state of India. It has a diversified manufacturing sector and features among the leaders in several industries like automobiles and auto components, engineering, pharmaceuticals, garments, textiles, leather, chemicals, plastics, etc. It ranks first among the states in terms of the number of factories and industrial workers.

Tamil Nadu Industrial Development Corporation Ltd (TIDCO), State Industries Promotion Corporation of Tamil Nadu (SIPCOT), Tamil Nadu Industrial Investment Corporation Limited (TIIC), and Tamil Nadu Small Industries Development Corporation Limited (TANSIDCO) are jointly developing industrial infrastructure in the state.

At current prices, Tamil Nadu’s gross state domestic product (GSDP) is estimated to be Rs. 24.85 trillion (US$ 320.27 billion) in 2022-23. The state’s GSDP increased at a CAGR of 11.27% between 2015-16 and 2022-23.

As of August 2022, the state had a total installed power generation capacity of 36.48 GW.

• Thermal power contributed 15.92 GW to the total installed power generation capacity, followed by renewable power (16.94 GW), hydropower (2.18 GW) and nuclear power (1.45 GW).
• Private sector, with a capacity of 22.56 GW, was the biggest contributor to the total installed power generation capacity in Tamil Nadu, followed by state utilities (7.14 GW) and central utilities (6.77 GW).

According to Department for Promotion of Industry and Internal Trade (DPIIT), between October 2019-December 2021, cumulative FDI inflows in the state amounted to US$ 7.09 billion between October 2019-June 2022. The state ranked fifth in India in terms of FDI inflows.

Total merchandise exports from the state stood at US$ 35.17 billion in FY22, and US$ 17.03 billion in FY23*.

Tamil Nadu Industrial Guidance and Export Promotion Bureau has been set up with an objective to attract major investment proposals to Tamil Nadu.

Some of the major initiatives taken by the Government to promote Tamil Nadu as an investment destination are:

• On November 10, the Vande Bharat Express will make its debut in South India on the route connecting the capitals of Tamil Nadu and Karnataka (Chennai-Mysuru via Bengaluru).
• 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 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 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, 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 September 2021, the state government announced plans to set up solar power parks across Tamil Nadu to generate 4,000 MW of solar energy with battery storage system of 2,000 MW.
• In September 2021, the UAE-based DP World announced plans to invest 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 September 2021, the Asian Development Bank approved a Rs. 1,095 crore (US$ 150 million) loan to enable access to inclusive, resilient and sustainable housing for the urban poor in Tamil Nadu.
• 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 it 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 the 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 August 2021, four airports in Tamil Nadu were featured in the central government’s monetisation plan. Trichy airport has been identified for monestisation through brownfield PPP models in FY22, followed by Madurai and Coimbatore airports in FY23 and Chennai airport in FY24.
• 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.
• The state introduced the ‘Industrial Policy 2021’ to achieve an annual growth rate of 15% in the manufacturing sector while attracting investments worth Rs. 10 lakh crore (US$ 137.8 billion) and creating employment opportunities for 20 lakh people by 2025.
• In February 2021, Flipkart signed a memorandum of understanding with the Tamil Nadu MSME Trade and Investment Promotion Bureau to bring local artisans, weavers, craftsmen and small and midsized enterprises into the e-commerce marketplace.
• In January 2021, Tamil Nadu approved 34 key investment proposals worth Rs. 52,257 crore (US$ 7.14 billion). These investments are likely to create >93,000 jobs in the electronics, automobile and auto components sectors, including electric vehicles and solar cell manufacturing.
• The government has proposed the Tamil Nadu Urban Flagship Investment Programme to support the state in developing urban and environmental infrastructure. The programme will cost Rs. 8,156 crore (US$ 1.11 billion) and will be financed with assistance from the Asian Development Bank. Further, 179 projects at a cost of Rs. 8.6 lakh crore (US$ 117.58 billion) relating to Tamil Nadu have been included in the national infrastructure pipeline. These projects will be implemented in the next five years (2020-25).