Tamil Nadu could become a trillion-dollar economy by 2031 if it maintains its 16% nominal growth rate from 2024-25. This prediction comes from the Economic Survey of Tamil Nadu 2025-26, released by the State Planning Commission. The survey assumes a 2% annual rise in the dollar’s value against the rupee. A faster 3.5% rise could delay this target by a year. The report was given to Chief Minister M.K. Stalin on February 16, 2026. J. Jeyaranjan, Executive Vice Chairman of the SPC, praised the State for its balance between growth and social justice, calling Tamil Nadu a model for other states. The survey warned about challenges ahead, especially since textile exports—nearly 30% of which go to the U.S.—face a 50% tariff hike. The Union government's removal of an 11% customs duty on cotton until December 2025 provides some relief. Tamil Nadu is diversifying export markets to reduce dependence on the U.S. and benefits from new trade deals with the EU and an upcoming India-U.S. agreement that will cut tariffs from 50% to 18%. Despite global headwinds, Tamil Nadu’s economy showed resilience. Its per capita income grew to ₹3.62 lakh in 2024-25 — 1.77 times the national average. The State contributes 9.4% to India’s GDP with just 4% of the land and 6% of the population. Fiscal policy has supported growth, with ₹2.54 lakh crore spent on capital projects between 2020-21 and 2025-26. However, future fiscal pressures from pensions and GST rationalisation remain concerns. The government also increased spending on welfare schemes, boosting social services from ₹1.13 lakh crore in 2021-22 to ₹1.58 lakh crore in 2025-26. Inflation dropped to 2.5% in urban areas and 2.1% in rural areas, aided by subsidies and income support programs. The manufacturing sector grew at 14.74% in 2024-25, far above the national average. Tamil Nadu leads India in manufacturing employment and exports, with merchandise exports growing from $26.15 billion in 2020-21 to $52.07 billion in 2024-25. FDI inflows rose steadily to $3.68 billion in 2024-25, defying national declines. The survey highlights Tamil Nadu’s strong position in electronics, textiles, and leather exports, marking it as a key driver of India’s industrial growth.