Tamil Nadu is one of the most industrialized states in the country; at present it is the fifth largest economy in India. The State Domestic Product at current prices is about US$ 36.78 billion and current exports are around US$ 5.5 billion. There has been visible change in the overall economic and industrial climate in the state. The state economy largely depends on industries and agriculture. The shares of economic activity in the state are given below.
Economic Activity
Manufacturing - 34%
Services - 45%
Agriculture - 21%
Investor Profile
Govt. - 55.1%
Foreign - 14.9%
Indian - 29.9%
Investment Strengths
Business-savy state government; responsive local administration; good railways, ports and telecom network; adequate road connectivity; availability of low cost labour through out the state.
State Priority Areas
Electronics, software, auto components, pharmaceuticals, leather
Tamil Nadu is one of the most industrialized states of the country owing to its geographical position and resources. The state boasts many heavy engineering and vehicle manufacturing companies like Ford, Caterpillar, Hyundai, BMW and Mitsubishi, MRF, TI cycles of India, Ashok Leyland, Royal Enfield, Mahindra & Mahindra, TAFE Tractors and TVS etc. These heavy vehicle and engineering industries are located in and around Chennai city.
The state is also known for its textile industries. A large number of textile mills and engineering industries are present around Coimbatore City. The textile industry adds huge revenue to the country’s economy by providing direct employment to an estimated 35 million people, and thereby contributing 4% of GDP and 35% of Gross Export Earnings. Tirupur (Coimbatore district) is the largest exporter of garments in the country and hence called as the "Textile valley of India".
Tamil Nadu also leads the country in manufacturing as well as supplying electrical and electronic goods and equipments. Companies like Nokia, Flextronics, Motorola, Foxconn, Samsung, Cisco and Dell have their bases in Chennai owing to its transport facilities and human resources. These companies manufacture circuit boards and cellular phone handsets. One of the global electrical equipment manufacturing public sector company BHEL has manufacturing unit at Tiruchirapalli and Ranipet.
Tamil Nadu has significant amount of mineral deposits such as Lignite (87% contribution to the national share), Vermiculite (66%), Garnet (42%), Zircon (38%), Graphite (33%), Ilmenite (28%), Rutile (27%), Monazite (25%), Magnesite (17%). India's leading steel producer SAIL has a steel plant in Salem, Tamil Nadu. Hence Tamil Nadu has several mineral based industries in various parts of the state.
Tamil Nadu is a leading contributor in the IT and BPO sector. Chennai is the second leading software exporter in India, after Bangalore. India's largest IT Park is housed at Chennai. Software exports from Companies such as HCL, Wipro, TCS, Satyam, Infosys, Cognizant Technology Solutions, Acme Technology Pvt Ltd, Covansys, Ford Information Technology, Xansa, Verizon, iSoft, iNautix, Electronic Data Systems, Bally and many others have offices in Chennai. Infosys Technologies has set up India's largest software development centre to house 25,000 software professionals at an estimated investment of Rs.12, 500 million ($270 million) in Chennai. India's largest IT park is housed at Chennai, jointly made by Ascendas India Ltd, a Singapore-based company engaged in providing business space solutions, and Tamil Nadu Industrial Development Corporation (TIDCO).
The Government of Tamil Nadu has a liberal industrial policy. Coinciding with the new economic and industrial policy of the Government of India, the state Government too has come up with its own policy, which outlines its main objectives and the strategies to achieve them. A New National Industrial Policy and a New Trade Policy have been announced. It is necessary to take advantage of the new spirit introduced and to create a congenial atmosphere for stimulating the rapid growth of the State's economy. A new industrial policy for Tamil Nadu is the logical outcome of these newly emerging economic factors.
Indian Industry grew by an annual average of 8.5 percent in the Seventh Plan period. In Tamil Nadu this growth rate was 5.7 percent. The share of the secondary sector in State Domestic Product in Tamil Nadu in the Eighties had remained static at 33 per cent, similar was the case with the per capita income which remained static at the national average. Unemployment had risen over the years and the number of educated unemployed on the live rolls of the Employment Exchanges had increased from 5.58 lakhs in 1980 to 18.01 lakhs in 1991.
Central investment in Tamil Nadu had declined from 10 per cent in 1969 to 5.21 percent in 1990-9. The lack of new mother industries has been a cause of serious concern.
The full utilization of surface irrigation potential and the rapid exploitation of ground water resources have imposed constraints on accelerated development of agricultural production.
Against this background, Tamil Nadu has to provide for rapid industrial development. The Government of Tamil Nadu stands committed to ensuring that Tamil Nadu forges ahead among the industrialized States in India.
Tamil Nadu has the following advantages for rapid industrial growth.
A highly trained labour force with a good record of industrial relations.
A huge pool of managerial talent.
A strong and well diversified manufacturing base.
A good functioning infrastructure including a well developed road transportation network.
An extensive rail network.
Efficient ports at Madras and Tuticorin.
Well developed social infrastructure.
Vast deposits of lignite which can act as the prime catalyst for new growth.
A comfortable energy situation and a forecast of continued availability of reliable power supply.
Peaceful living conditions in a harmonious society.
A substantial export base.
Major Industries
The important sectors of industries in which Tamil Nadu has traditional strength are as below :
Established Industries
Emerging Industries
Mineral based industries
Electronics
Engineering
Software
Leather
Consumer durables
Pharmaceuticals
Biotech Products
Cotton textiles & Hosiery
Food Processing
Ready-made garment industries
Rubber and plastic products
Wood Products
Tourism
Agrobased industries
Hotels
Chemical based industries
Financial Services
Thrust Areas for further industrial Growth
Leather
Textiles and Hosieries
Electronics and software
Auto components
Drugs and Pharmaceuticals
Petro chemicals including downstream projects in Manali and Thanjavur
Industrial Alcohol based Organic Chemicals
Agro based industries and food processing industries
Tamil Nadu is the second biggest producer of rice and is the home land of Dr. M.S. Swami Nathan, known as the "Father of the Green Revolution" in India. The state is historically known for it’s agriculture from ancient times.
The major food crops grown in the state include rice, jowar, ragi, bajra, maize and pulses. Cotton, sugarcane, coconut, tea and coffee are also grown and considered as cash crops. Some farmer produce horticultural products like bananas and mangoes.
Paddy is grown in large excess because rice is the main staple food of the state. There are three crops based on duration. The first one is the Kuruvali (the short term crop) with duration of three and a half to four months from June to July to Oct - Nov. The second crop is called the Thaladi that grown in 5 to 6 months Oct - Nov to Feb - March. Third is Samba and has a duration of almost 6 months from Aug to January. The major source of irrigation is the rivers, tanks and wells.
Tamil Nadu is one of the most industrialized states in the country; at present it is the fifth largest economy in India. The State Domestic Product at current prices is about US$ 36.78 billion and current exports are around US$ 5.5 billion. There has been visible change in the overall economic and industrial climate in the state. The state economy largely depends on industries and agriculture. The shares of economic activity in the state are given below.
Tamil Nadu is one of the most industrialized states of the country owing to its geographical position and resources. The state boasts many heavy engineering and vehicle manufacturing companies like Ford, Caterpillar, Hyundai, BMW and Mitsubishi, MRF, TI cycles of India, Ashok Leyland, Royal Enfield, Mahindra & Mahindra, TAFE Tractors and TVS etc. These heavy vehicle and engineering industries are located in and around Chennai city.
Tamil Nadu also leads the country in manufacturing as well as supplying electrical and electronic goods and equipments. Companies like Nokia, Flextronics, Motorola, Foxconn, Samsung, Cisco and Dell have their bases in Chennai owing to its transport facilities and human resources. These companies manufacture circuit boards and cellular phone handsets. One of the global electrical equipment manufacturing public sector company BHEL has manufacturing unit at Tiruchirapalli and Ranipet.
The Government of Tamil Nadu has a liberal industrial policy. Coinciding with the new economic and industrial policy of the Government of India, the state Government too has come up with its own policy, which outlines its main objectives and the strategies to achieve them. A New National Industrial Policy and a New Trade Policy have been announced. It is necessary to take advantage of the new spirit introduced and to create a congenial atmosphere for stimulating the rapid growth of the State's economy. A new industrial policy for Tamil Nadu is the logical outcome of these newly emerging economic factors.
Tamil Nadu is the second biggest producer of rice and is the home land of Dr. M.S. Swami Nathan, known as the "Father of the Green Revolution" in India. The state is historically known for it’s agriculture from ancient times.