In foreign lands, Tamil Nadu chief minister Palaniswami chases investors

In a bid to attract investors, Tamil Nadu Chief Minister E K Palaniswami has embarked on a two-week visit to the UK, the US and the UAE. He is the first chief minister of the state to go on an official visit to the Western nations. C N Annadurai’s and M G Ramachandran’s visits were personal. 

Palaniswami and his team of ministers, who were usually seen in white shirts and white dhotis, are now moving around in suits.

The chief minister is also breaking away from his leader the late J Jayalalithaa's policy, which was not in favour of such trips. The late DMK leader M Karunanidhi had visited Singapore in 1999 when he was holding the office of chief minister to address business meets.

Palaniswami’s trip comes at a time when the FDI flow, according to the Department for Promotion of Industry and Internal Trade (DPIIT) data, has dropped 25 per cent and competition has increased, especially from Andhra Pradesh.

The visit

The 13-day trip started on August 29 from London, where Palanswami interacted with investors in the health care sector, an area in which the UK might have an interest as Tamil Nadu, with its quality health care, is an attractive destination for medical tourism. The schedule also included inspecting ambulance services and the steps taken to control the spread of malaria there.

On Thursday, he addressed a parliamentary group and elaborated on the state's measures to attract investors and expressed willingness to work with the UK to create a new paradigm for funding green energy, water, urban infrastructure and affordable housing.  His UK visit included meeting investors from the energy sector in Glasgow, and signing of an MoU with King’s College London to set up a college in the state. 

His visit to Suffolk was to learn about the renewable energy generated there and the tariff structu­re. Tamil Nadu has been the lea­d­er in renewable energy, but last ye­ar, Karnataka overtook it. The chief minister’s US trip started on September 1 from Buffalo, where he and his team studied about the dairy and animal husbandry sector. 

In New York and San Francisco, Palaniswami is scheduled to meet potential investors. Sources said the chief minister will meet officials from Caterpillar, Ford, Foxconn, Lincoln Electric, and others.

On September 5, he will go to Telsa’s facility in San Francisco. It may be noted that while the Cen­tre is planning to promote EVs, Tamil Nadu will have its own EV policy and buy 525 electric buses for nine cities as part of the Phase-I plan. Also, Hyundai’s KONA Electric, India’s first all-electric SUV, was rolled out from the South Korean automaker’s factory near Chennai. 

He will also meet Tamil NRI investors separately.

His trip will conclude with a visit to Dubai on September 8 and 9, after taking part as special guest in a business investors’ meet there. Before returning on September 10, he will also meet the Tamil diaspora.

State ministers who joined Palaniswami include Health Minister C Vijayabhaskar, Industries Minister M C Sampath, Dairy Development Minister Rajendthra Bhalaji, and Revenue Minister R B Udhayakumar.

Meanwhile, the chief minister’s visit has drawn criticism from M K Stalin, president of the DMK, who said the AIADMK government was not able to bring in the investment committed in the global investors’ meetings in Chennai. Also, he alleged the visit is more for personal interest. Palaniswami retorted that Stalin must reveal the reason for his foreign visits.

 FDI in the state

At a time when countries, including western nations, are trying to create jobs locally, attracting investment is a major challenge for Indian states. This has led chief ministers to hold roadshows and travel to various parts of the world to attract investments.

Chief ministers of Andhra Pradesh, Gujarat, Madhya Pradesh, and Himachal Pradesh, to name a few, made frequent foreign visits to attract investments and they have been succeeding too. 

For example, FDI inflow into Tamil Nadu and Puducherry dropped 25 per cent in FY19 to $2.61 billion, from $3.48 billion a year ago, the DPIIT data showed. But, Telangana’s FDI increased to $3.46 billion (Rs 23,882 crore) in FY19 from $1.25 billion (Rs 8,037 crore), a year ago.

State officials defended Palaniswami’s foreign visit citing a similar downward trend in other key manufacturing states such as Karnataka, Gujarat and Maharash-tra. Maharashtra showed a decline of 15 per cent in foreign equity inflow to $11.38 billion (Rs 80,013 crore) in FY19 from $13.42 billion (Rs 86,244 crore) a year ago; FDI into the Ahmedabad region of Gujarat declined 16.1 per cent to $1.80 billion (Rs 12,618 crore) from $2.09 billion (Rs 13,457 crore).