The Confederation of Indian Industry (CII) Tamil Nadu organised a virtual session on Tamil Nadu emerging as India’s top GLOCAL investment destination on 18 November 2020. The session saw participation of speakers -- Sai Sudha Chandrasekaran, Senior Assistant Vice President, Invest India; Paul Arun, Vice President, Guidance Tamil Nadu; Mohammad Athar, Partner and Leader, Economic Development and Infrastructure, PwC India; Vishu Mahajan, IAS, Managing Director, M-TIPB; C Devarajan, CEO, URC Constructions; K Srikanth, CEO, Alfa Rubber & Springs; S Ganesh Mani, Head – Production, Hyundai India; Velan C, Vice President & Head, OneHub Chennai and CapitaLand Chennai Operations, sharing their experiences and advantages for industries to look Tamil Nadu as an ideal manufacturing hub. 

 

Tamil Nadu has emerged as country’s top investment destination. The state has great potential in varied sectors such as electronics, automobile, auto ancillaries, capital goods, food processing, pharmaceuticals, and chemicals. 

 

The state contributed 9.3 percent of India’s net exports in 2018-19. It has various industrial policies such as TN Electronics, Hardware and Manufacturing Policy 2020, TN Electric Vehicle Policy 2019, TN Startup and Innovation Policy 2018-23, TN Food Processing Policy 2018, TN Combined Development Building Roads 2019. 

 

Recently, Tamil Nadu signed 14 MoUs with a total investment of Rs 10,055 crore for various projects. While the state is already attracting global companies, it is also aligned with the Centre in promoting industries within India becoming the epicentre for Atmanirbhar Bharat campaign. 

 

Sai Sudha Chandrasekaran, Senior Assistant Vice President, Invest India, noted the agency helps in identifying the location assessment, policy advocacy, issue resolution/ clarification, setting up the business. In Tamil Nadu the agency works closely with Industries Department, Guidance Tamil Nadu. She noted some key reforms, policies and initiatives. The Centre is working towards the goal of creating USD five trillion economy and is creating opportunities for this across sectors. She noted that the textile industry has USD 200 billion opportunities, Construction sector has USD 640 billion opportunities, Capital Goods has USD 100 billion, Electronic industries offer USD 400 billion opportunities. The agency has identified 25 to 30 key sectors and opportunities it offers.  Each sector has a nodal Ministry and Central Ministry. 

 

The Centre is working across all sectors from Railways, Ports, Road, Shipping, etc to offer seamless infrastructure. The country also has marked its footprint across all the value added chain including R&D, Design Manufacturing, Sourcing, Assembling, Sales and Marketing.  She also mentioned few reforms by the Central government in the last 12 months. She highlighted Corporate Tax Reduction by Finance Ministry, the Project Development Cell (PDC), Single Window Clearance, Custom Bonded Warehouse, Startup India. Till date Invest India has handled 2,50,000 business requests including domestic and international. 

 

Paul Arun, Vice President, Guidance Tamil Nadu, gave an overview of the state’s performance. Tamil Nadu is the second largest economy in the country with eight percent of the National GDP. The state had a GDP of USD 265 billion at the end of 2019-20. Tamil Nadu is a power surplus state and has an installed capacity of 30 GW. Over 50 percent of the state is urbanised and has more number of Tier-1 and 2 cities than any other states in the country. The state has highest number of industries and is home to 74 of the Fortune 500 companies.  

 

The state has four international, two domestic airports, four large ports, 22 other seaports, 2,13,096 km of roadways providing connectivity. The focused sector of the state are – Chemicals and Petrochemicals, Automobiles and Auto Components, Textiles, Aerospace, Agro and Food Processing, Infrastructure, IT and ITeS, Electronics and Hardware, Renewable Energy, Heavy Engineering and Pharmaceuticals. 

 

He noted that Tamil Nadu ranks among the top 10 automobile hubs in the country in terms of installed capacity. It contributes around 35 percent of the auto component production and 44 percent of the country’s car export. The state houses major automobile brands such as Mahindra, BMW, Ford, Yamaha, TVS, MRF, Apollo, to name a few. The industrial cluster for automobile are located at Thiruvallur, Kancheepuram, Chennai, Madhurai and Coimbatore. 

 

The state ranks second in India in computer and electronics parts manufacturing. It accounts for 16 percent of national productions for computer and peripheral equipments. It has a strong base for mobile manufacturing. He highlighted one of the main objectives of the TN Electronics Hardware and Manufacturing Policy is to increase the electronics industry output to USD 100 billion by 2025. The electronics manufacturing cluster is spread across the state -- Coimbatore, Madurai, Krishnagiri, Salem, Chennai, Tiruchirappalli. 

 

He highlighted, the state is home to over 120 aerospace manufacturing companies with more than 700 suppliers to various defence companies. The state offers opportunity to invest in MRO in Chennai and Precision Manufacturing at Hosur. One of the two defence corridors is also coming up in the state. 

 

The government expects over USD 10 billion investment in Data Centres over the next five years and Tamil Nadu is the hotspot for it. The multiple submarine cables, surplus power, proximity to key hubs makes the state a leading destination for Data Centres. Between April 2020 to October 2020, the state government has inked MoUs with over six companies to set up Data Centres with an aggregate investment of around Rs 12,000 crore. 

 

The state offers standard incentives such as stamp duty concession, capital subsidy, training subsidy, land allotment concession, environmental promotions infra subsidy, electricity tax exemption, etc. For investment beyond Rs 500 crore, a structured package on a case to case basis is provided. 

 

The state government has launched Aerospace and Defence Policy 2019, Manufacturing Policy 2020, while TN Industrial Policy will be launched soon. 

 

He also highlighted the Projects Today report, wherein the state was ranked No.1 in terms of investment in Q1-Q2/FY21. A total of 55 MoUs have been inked worth more than Rs 40,790 crore investments between April 2020 and October 2020. 

 

Vishu Mahajan, IAS, Managing Director, M-TIPB, noted that the main difference of M-TIPB is that it is more focused on the MSME sector and local industries. MSMEs are estimated to be around 4.9 million, while 9.6 million employment is generated from it. Over 6,000 products are created from these diverse industries across various sectors. MSMEs have a strong presence in terms of total output contribution, employment and exports.   

 

The institution support for MSMEs include Commissionerate of Industries and Commerce which takes care of policy making and implementation in the state; MSME Trade and Investment Promotion Bureau promotes exports and investment in MSMEs sector; Entrepreneurship Development and Innovation Institute support startup ecosystem; District Industries Centre implements the state policies at district level; TN Small Industries Development Corporation focuses on infrastructure for MSMEs; and TN Industrial Investment Corporation provides financial assistance.

 

M-TIPB has been established to promote foreign collaborations, investments and to internationalise the MSMEs from Tamil Nadu. It promotes and supports MSME exports; trade fairs, buyer-sellers meets, exhibitions and investment related events; and collaborating with national, international trade bodies and industry associations.   

 

Velan C, Vice President & Head, OneHub Chennai and CapitaLand Chennai Operations highlighted the company is into building logistics and is setting up manufacturing facilities based on the needs of the manufacturing sector and companies can take up these on long term leases basis. These means manufacturing company can start up its unit in a few months. 

 

The company has set up industrial estate OneHub Chennai where seven to 10 industries are operative. The company has not only created the facilities and industries but also offers work-live-play kind of environment. The company has set aside 180 acre wherein institution is coming up. The state will be leading player in terms of manufacture as well as other industrial sectors. The company is readily available to offer its supports for foreign companies. 

 

C Devarajan, CEO, URC Constructions, sees live-work-play model as a huge opportunity for the infrastructure industry especially with respect to housing for the people working in this industry. The live-work-play model will also create huge opportunities for 12 Smart Cities in the state. With this, the larger cities will get re-organised, and similarly smaller cities such as Tier- 2 and 3 cities will become a much vibrant place to live, work and earn.  

 

Another area for opportunity is solid and liquid treatment plants wherein emphasis has now been placed post COVID. With the huge investment commitment coming in the state, there could be a lot of migrant labour accommodation opportunities. 

 

S Ganesh Mani, Head-Production, Hyundai India, noted that the company opened its facility 24 years ago in Chennai. The company started from a basic facility of 24,000 per annum capacity and now has a capacity of 7,50,000. It has manufactured close to 9.9 million vehicles and has exported close to three million from the Chennai plant.  

 

The company is focusing on green manufacturing as a concept and is closely working with Industry Department, local administration of the state. He noted, as much as Rs 7,000 crore of investment will go into electric vehicles manufacturing by 2025 and till now it has made an investment of around Rs 3,500 crore. 

 

With the latest unlocking post COVID-19 the company has reached 99 percent of the capacity. The company is going ahead with multi-sourcing of localisation. It is also working with the state government to set up Hyundai Academy for Technical Skill with an investment of Rs 150 crore.