Tamil Nadu has built a strong industrial ecosystem over decades, but investors say the state will need to improve infrastructure, logistics, transparency and the speed of approvals to sustain its growth and compete with increasingly aggressive neighbouring states.
Speaking at an India Today Tamil roundtable on investment and economic growth, industry leaders said Tamil Nadu’s established manufacturing base, skilled workforce and spread of economic activity across the state give it a strong advantage.
But they also warned that these strengths cannot be taken for granted as companies get more choices on where to invest.
For businesses, the ease and speed of getting approvals remain critical.
Junaith Babu, chief operating officer at G Square Housing, said corruption could be one of the biggest deterrents for companies looking to invest.
“I think corruption will be number one on the list,” Babu said, stressing the importance of transparency, single-window clearances and online approvals.
Babu said his company had seen faster approvals over the past three months, adding that the ease of doing business had improved.
Dr J. Rafiq Ahmed, executive chairman and managing director of JKothari Industrial Corporation, also said the conversion of investment commitments into actual projects was an important issue. His own experience, he said, showed that investments could materialise when there was active engagement between the government and industry.
Better infrastructure and logistics emerged as another major demand from investors.
Jose Charles Martin, managing director of Charles Group, said Tamil Nadu needed to focus on transportation, logistics, water, electricity and the use of its ports.
“We need to have railways to connect all these places, rather than having lorries,” Martin said, arguing that greater use of railways could lower the cost of moving goods. He also called for better utilisation of the state’s ports and waterways.
For an industrial state competing for new factories and supply chains, these costs can influence where companies eventually choose to invest.
The investors also pointed to the opportunity in Tamil Nadu’s tier-2 and tier-3 cities.
Babu said the state’s economic activity was already spread across 20-25 towns, citing cities such as Coimbatore and Madurai. He said infrastructure creation could further drive real estate development and employment in these markets.
Ahmed made a similar case for taking industries to less-developed districts. He pointed to his group’s investments in Perambalur and Karur and said it was now moving ahead with a project in Ramanathapuram after a request from the chief minister.
Despite the concerns, the overall message from the roundtable was positive.
Ahmed said Tamil Nadu’s industrial strength was the result of decades of development and that successive governments had contributed to building the state’s industrial base. He said the existing ecosystem, stable policies and workforce make the state an attractive destination for investors.
Babu also highlighted Tamil Nadu’s engineering talent and women workforce as key advantages.
But with neighbouring states offering aggressive incentives and competing for the same companies, investors said Tamil Nadu will have to keep improving rather than rely only on its existing advantages.
For the next phase of growth, their message was clear: investment announcements need to translate into projects, and projects need infrastructure, faster approvals and a transparent system to succeed.