Southern states were among the earliest ones to embrace industrialisation in the country. These states started initiated major reforms in the early 90’s in both the industrial sector and the social fronts.
While Tamil Nadu, Andhra Pradesh and Karnataka have a well-balanced mix of large, medium and small industries, Kerala has mostly housed medium and small industries. Also, several global firms have set up shops in Tamil Nadu, Karnataka and Andhra Pradesh.
After opening up the technical education sector for private sector by Tamil Nadu and Kerala, both the states started seeing mushrooming of engineering colleges. Tamil Nadu, in particular, saw significant rise in number of engineering colleges. Now, Tamil Nadu provides a huge talent pool with an annual turnout of about close to two lakh engineering graduates and almost an equal number of trained polytechnic students.
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The recent bifurcation of Andhra Pradesh, the biggest south Indian state, offers a vast potential for growth. Chandrababu Naidu-led Andhra Pradesh has been aggressively promoting the state to be an attractive destination for industrial investments. Of course, Telangana is also trying to up the ante as an equally attractive destination.
In Karnataka there are plans afoot to promote Chennai–Bangalore Industrial Corridor and the Bangalore–Mysore Corridor with the aid of foreign investments. With a promise of robust infrastructure under these corridors, these areas are expected to see an increasing number of investors making a beeline.
Faced with the challenge of creating jobs and achieving growth in order to stay in power, every state government is trying to do their best to woo industrial investments. State governments have started to run investment road shows and events in a more serious manner and promise several sops for new investments.
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As among the most urbanised state in the country, Tamil Nadu has always carved a niche for itself in the manufacturing map of India. Starting with agro-processing to textiles, leather, chemicals, biotechnology, and automobiles and now to aerospace, the state has presented itself as a highly mature manufacturing investment destination. For example, Chennai-Bangalore industrial corridor is one of the key automobile regions in the country.
Tamil Nadu alone accounts for a third of production of passenger vehicles (cars and utility vehicles) in the country and over two-thirds of exports of PVs from the country. The state houses factories of country’s two major PV exporters Hyundai and Nissan, both account for about 43 per cent of country’s PV exports. The state’s emergence as a global auto hub would not have been possible with robust supply chain industry. The auto component industry in the state is truly global with several international recognitions for quality of production.
If Tamil Nadu is the hub of manufacturing, Karnataka is known as the cradle of banking as well as the technology power house of the country. Karnataka, for long, has been the leader in IT and software industry. The capital city Bengaluru is referred as the Silicon Valley of India and accounts for about one third of total software exports from India. After being a home to IT outsourcing centres, call centres, high-end R&D facilities of a number of multinational firms, Bengaluru is now triggering a start-up revolution in the country. The city has a number of successful startups, founded by young and budding entrepreneurs.
It is well-known fact that Andhra Pradesh has been a pharmaceutical hub of this country. It is estimated that about a third of India’s bulk drugs is produced in and around Hyderabad. The state also houses some of the leading research laboratories, and biotech parks that provider necessary support for the development of the industry.
Meanwhile, both Andhra Pradesh and Telangana are also racing ahead in attracting projects in renewable energy sector. They are among the top 10 states in solar power generation. The two states along with Tamil Nadu are making rapid strides in generating power through solar energy as the three states have been facing huge shortfall in power.
Besides a strong industrial and IT base, southern states have also been blessed with robust banking and finance infrastructure. The states have significant number of branches of public sectors banks, old private sector banks such as Lakshmi Vilas Bank, City Union Bank. Also, the region is home to robust NBFCs (non-banking finance companies) such as Sundaram Finance and Shriram Group, co-operative banks and microfinance institutions. The vast lending infrastructure has been a vital factor in supporting the growth of not only medium enterprises, but also micro and small units and budding entrepreneurs.
The southern region offers tremendous investment opportunities across segments for the private sector. Peaceful industrial climate, availability of huge skilled manpower and good port facilities are its major differentiators.
Southern states have also been blessed with robust banking and finance infrastructure