When the Global Investors Summit (GIM) draws to a close on Monday evening, Tamil Nadu would have sealed deals to help it become a $1 trillion economy by 2030. TN’s economy will have to grow at 18% over the next seven years to reach $1trillion. The state has, nevertheless, created a positive narrative around this target, irrespective of whether it achieves it or not.
TN manufactures everything from bicycles to battle tanks, but the success of automobiles and auto components as well as IT/ITeS stands out in the past couple of decades.
GIM has set a roadmap for further growth in electric vehicles, semiconductor design/electronics, technical textiles, renewable green energy, and GCC (global capability centres).
“Electronics, GCCs, non-leather footwear and renewable energy are some of the key sectors that are set to place Tamil Nadu firmly on the growth path,” says V Vishnu, MD & CEO, Guidance Tamil Nadu. And with the automobiles sector transforming into sustainable mobility, green energy and logistics, the state’s growth basket is near complete.
Let’s take a closer look at some of these sectors:
Sustainable mobility
“Tier-1 and tier-2 suppliers for the automotive industry are transitioning to alternative fuel technologies. This helps TN-based automotive OEMs (original equipment manufacturers) to transition to alternative energy vehicles without shifting base,” says Shenu Aggarwal, CEO, Ashok Leyland. “What TN provides in abundance is engineering talent with new skills required for development of the ecosystem for alternative fuels, including EVs,” he adds.
Semiconductors & electronics
TN on Monday unveiled its Semiconductor and Advanced Electronics Policy that aims to ensure the state contributes 40% of India’s electronics exports by 2030, besides creating a skilled talent pool of two lakh people by then. TN seeks to attract anchor investments in semiconductor and advanced electronics manufacturing, and enable a design ecosystem through incentives, funding and industry-academia collaboration.
Global capability centres
“GCCs help generate high-value and high-quality jobs, enhancing per capita income, diversity, inclusion and social equity,” says Ramkumar Ramamoorthy, Partner at Catalincs, a growth advisory firm. “They help attract Fortune 500 through Global 2000 companies across sectors as diverse as financial services, manufacturing, automotive, health sciences, logistics, retail, telecom and energy,” he adds.
Besides, TN has ‘home-grown quality talent at scale’ across both domain and technology. As a result, more than 150 GCCs made the state their home and grew rapidly to many thousands of employees, says Ramamoorthy.
Renewable energy
“Tamil Nadu has historically led in renewable energy. For 15-20 years, it had the largest installed base for wind energy. Only recently, we ceded ground to Gujarat. We are also a leading player in solar. On a percentage basis, we had the highest amount of renewable power that goes into the grid,” says T Shivaraman, vice-chairman, Orient Green Power Co. Ltd.
The growth of renewable energy in TN will continue as manufacturing companies have to achieve 100% use of renewable energy by 2030 to avoid tariffs in Europe. So, there will be tremendous demand push not just in manufacturing but also in IT/ITeS.
Non-leather footwear
“We are late on footwear. But now industry could add local value instead of simply looking at export offerings,” says Aqeel Panaruna, former chairman of Council of Leather Exports and Leather Sector Skill Council. TN already accounts for 45% of all shoe exports from India. This can go up to two-thirds, especially with Taiwanese companies coming in. “Leather is an art. It’s a handicraft that requires skill. Non-leather is mechanized and it can generate more employment for a larger segment of people,” he says.
