Tamil Nadu has so far wooed investments worth ₹2.6 lakh crore by signing 227 MoUs since May 2021 when the new DMK government took charge under chief minister M.K. Stalin.
Out of the total MoUs signed, 80% of the MoUs have either confirmed their investment or have started work in the state, State Industries Minister T.R.B. Raaja tells Fortune India.
The government has planned global investors meeting in January 2024. “We plan to concentrate on EV, Green Hydrogen, and Auto investments in the 2024 GIM. At present, we have a greater number of EV companies in the state and after the 2024 GIM we want Tamil Nadu to be the EV capital of the world,” says Rajaa.
“Our aim is to make Tamil Nadu a $1 trillion economy in the next few years. We are confident as these investments will increase the economic growth, and the government’s revenue in the form of GST and VAT will increase considerably as a consequence,” said Rajaa.
The two previous GIM held in 2015 and 2019 were not a big success as the first GIM had a maximum number of solar energy investments, which did not take off. The GIM in 2019 was a failure as the Covid lockdown prevented any noteworthy investments.
Among the big ticket investments in TN are by Mitsubishi Electric India, Foxconn, Royal Enfield, Ola, non-leather footwear park, etc. Mitsubishi has laid the foundation to set up a factory to manufacture air conditioners.
“MEI has said that it would invest ₹1,891 crore by way of Foreign Direct Investment (FDI) for setting up its first India facility to manufacture room air conditioners and compressors in Tiruvallur district in the state. It is expected to provide jobs to over 2,000 people. These jobs will be skill jobs and only those who are educated in this type of work will get jobs,” says Rajaa.
Speaking at the foundation function, Kazhuhiko Tamura, Managing Director, MEI, says the company plans to make the Chennai factory a “global hub” by suggesting the facility, besides catering to the local market, will also manufacture ACs and compressors for the export market.
Foxconn, which makes iPhone, has announced plans to expand its plant in Tamil Nadu. It plans to boost the workforce at its plant in southern India to 70,000 by adding 53,000 more workers over the next two years.
Royal Enfield plans to set up a new factory in Tamil Nadu to expand its product portfolio as well as diversify into electric vehicles. “Royal Enfield has already acquired a 60-acre land parcel in Cheyyar, on the outskirts of Chennai. There are plans to invest between Rs 1,000 crore-1,500 crore in the next 12-24 months, depending on the manufacturing capacity,” says a company official.
The new factory will cater to new Royal Enfield internal combustion engine (ICE) motorcycles; a portfolio that’s been expanding steadily. Following the recent launch of the Super Meteor 650 and the alloy wheel-equipped Interceptor/Continental GT 650, the company is gearing up to launch the Shotgun 650 and the highly anticipated Himalayan 450.
It is learned that the company has already commenced work at the Cheyyar plot to ensure a smooth transition to EVs as and when the models are developed and ready for rollout.
When asked about whether all the investments will be in and around Chennai, the Minister says some big investments are also coming up in the south of the state. “In Tuticorin, a big furniture park is being set up. This will be mostly labour-intensive and more people will get jobs. Close to Tuticorin, in Virudhunagar district, a textile park under the Centre’s scheme PMMITRA has been announced,” says the minister.
According to Ravi Sam, chairman of Southern India Mills’ Association, the cabinet committee last October approved seven PM MITRA parks with a total outlay of ₹4,445 crore for five years. The scheme extends 30% of the project cost with a cap of ₹500 crore per park for greenfield projects and ₹200 crore for brownfield projects as Development Capital Support and ₹300 crore per park as Competitiveness Incentive Support.
In the Cauvery Delta districts, the government is planning to bring value-added investments in coconut and paddy. “We have chosen non-agri lands in the delta districts and these investments will also provide employment to youth who are mostly first-generation graduates,” says Rajaa.
Guidance Tamil Nadu - State nodal agency for investment promotion and single window facilitation - signed 10 MoUs with Phoenix Kothari Footwear and its 10 affiliated companies, including those from Taiwan for an investment of ₹740 crore. These would ensure jobs for 4,500 people.
Already, two MoUs committing an investment of ₹1,700 crore were signed with Kothari Phoenix company, after the government unveiled a separate policy for footwear and leather goods manufacturing. Thus, the 12 MoUs for a total investment of Rs 2,440 crore would ensure employment opportunities for 29,500 people. All these are non-leather companies that would result in lower damage to the environment due to the alternative methods used to produce products.
Tamil Nadu is also focussing on making the state an EV Manufacturing Hub. “We had a successful meeting on June 16 with several EV manufacturing companies and also battery manufacturing companies. We had got feedback from them for expanding their presence in the state and very soon steps will be taken on the demands of the companies,” says Rajaa.
Already Ather Energy and Ola Electric have their presence in the state and more companies have shown interest to set up factories here. The government plans to increase the demand for EVs in the state and also provide a big boost to the charging infrastructure.
“Along with investments the demand for land, water, and power will increase. As of now, we have a total of 38,000 acres of land in the land bank. Our target is to have not less than 45,000 acres of land in the bank,” the minister says.
With regard to power, the minister says the state is looking at renewable power. “Tamil Nadu is a leader in wind power but it is seasonal. Therefore, we are looking at pump storage sources to increase the power supply to these companies. This source of power will be clean and non-polluting. Though we will still increase the thermal capacity, the government wants more renewable power capacity. There will be a balanced approach with regard to the power sector,” says Rajaa.