Economy & Industry

Economy : At a Glance

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’s 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-savvy 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

Industry : An Overview

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).