At a time when Karnataka has been struggling to attract investments, Tamil Nadu has attracted investments worth Rs 15,000 crore during 2009, majority of which was driven by the automobile industry. According to government sources, since 2006 investments worth Rs 46,100 crore have come into Tamil Nadu.
The recent one was French tyremaker Michelin signing a memorandum of understanding (MoU) with the Tamil Nadu government to set up a tyre manufacturing facility near Chennai. The project would see investments worth Rs 4,000 crore over the next seven years.
The tyre major has got Foreign Investments Promotion Board (FIPB) approval for establishing a wholly-owned subsidiary and planning for a manufacturing facility in Tamil Nadu. The company got nod for investing upto Rs 11,000 crore.
Mahindra & Mahindra is also believed to be in advanced talks with the Tamil Nadu government for setting up an integrated auto facility in the state. M&M will invest about Rs 1,800 crore in the facility located in the Tiruvannamalai district (195 km from Chennai) over 450 acres. The plant will have the capacity to churn out 150,000 units annually.
The other major investments, were driven by automobile industry including Korean car maker Hyundai has so far invested Rs 4,191 crore in the state, while Ford has committed an investment of Rs 2,000 crore. Renault and Nissan have committed Rs 4,500 crore, while German major Daimler will invest Rs 2,000 crore. Ashok Leyland and Nissan have signed MoUs with the state government for setting up facilities for Rs 4,000 crore.
The Associated Chambers of Commerce and Industry of India has predicted that by 2010, over $3 billion (around Rs 14,400 crore) will be invested by global car manufacturers in and around Chennai and it will become among the top 10 centre in the world for car manufacturing.
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“While the investment by various companies was Rs 46,100 crore, the suppliers who set up operations near the mother plants would be more than this,” E Velmurugan, vice-chairman, Industrial Guidance and Export Promotion Bureau, was quoted in reports. He added that employment from these facilities would cross atleast minimum of over two lakh over the next five years.
The other major industry information technology reported a 29 per cent growth in the exports which rose to Rs 36,680 crore from Rs 28,426.02 crore.
The global consulting firm KPMG said that the introduction of the Industrial Policy 2007 has played a crucial role in enhancing the growth in the industrial development in Tamil Nadu. “Implementation of these policies were an important contributor to the state increasing total investment three times.”
It also lead a number of IEMs in the state, between August 1991 and August 2009 521 IEMs have implemented by the entrepreneurs with an investment of Rs 13,770 crore and generated employment opportunities for 79,084 people.
Further the implementation of policies has triggered the growth of FDI in the state. “The inflow in the Chennai region (including Tamil Nadu and Puducherry) was Rs 2,980 crore till May 2009 as compared to Rs 2,890 crore in 2007.
During 2006-2009, the state signed 23 MoUs in addition to sanctioning packages of assistance for nine projects. Of the 23 MoUs, 12 were signed during the calendar year 2008 with an investment of Rs 25,100 crore. The government also issued structured packages of assistance for seven projects for an investment of 5,460 crore, said the consulting firm.