Hosting global companies in Tamil Nadu

With several advantages, Tamil Nadu has attracted more than 1,400 firms from many countries and has become a hub for global automakers

Published - February 18, 2022 11:07 am IST - Chennai

In top gear: Hyundai Motor came with Korean suppliers, thus creating a vibrant supply chain. File

In top gear: Hyundai Motor came with Korean suppliers, thus creating a vibrant supply chain. File | Photo Credit: B. VELANKANNI RAJ

Tamil Nadu, misconceived to be a conservative land, has played a perfect host to companies from across the globe. The MNC footprint here has expanded in the past quarter century.

Today the State is home to over 1,400 plus companies from countries such as South Korea, China, Japan, U.K., U.S., Singapore, Australia, and Denmark. Further, it has attracted investors from Germany, France, and Taiwan with 200 plus firms currently operating in Tamil Nadu. Over the years the State has also become home and hub for global automakers. Hyundai from South Korea, Nissan and Yamaha from Japan, Daimler from Germany and Renault, and Peugeot from France have made huge investments for manufacturing.

Good infrastructure

“Tamil Nadu has lots of advantages against other countries and States in attracting foreign direct investment, relatively good infrastructures including ports, plentiful qualified human resources, and well-established clusters in automobile and IT sectors,” said Young-seup Kwon, Consul General of the Republic of Korea in Chennai.

Details provided by Guidance, the nodal agency instrumental in bringing in investments into Tamil Nadu, shows the state has also emerged as a leading destination for electronics with Taiwan, Japan, and Korea in particular, being at the forefront of investments. Firms such as Delta, Pegatron, Foxconn, Flex, Toshiba, Hitachi, Panasonic, and Samsung have manufacturing facilities here.

The State has also been able to attract investments in renewable energy from Danish companies such as Vestas, Cubic, Fiber line composites and U.S.-based companies like TPI and First Solar.

Most of these companies at a later stage brought in suppliers and other component manufacturers from their countries into Tamil Nadu. For instance, Hyundai Motor came with lots of globally competitive Korean suppliers, including Hyundai Mobis, Mando Automotive, and Hyundai Globis and has created a vibrant and competitive automobile supply chain and ecosystem. More than 150 Korean companies are operating in Tamil Nadu and over 4,000 Koreans are residing, forming the biggest expat community in Chennai.

Country-specific desks

Mr Young-seup Kwon pointed out that the Korean desk of the Guidance, has always been active in resolving Korean companies’ difficulties, and has been very successful in receiving more foreign and domestic investment.

A few years ago, to get more multinational firms to set up shop in the state, Guidance set up country-specific desks at its office in Chennai. These desks have been deployed for being the first point of contact with the countries that generate a significant quantum of outward FDI.

The team at Guidance comprises of 40-plus multi-linguistic personnel skilled in investment promotion with technically sound knowledge on the operating ecosystem, policy and regulatory updates. They are operating round the clock to ensure maximum utilisation across time zones.

Seamless facilitation

“There has been a high-interest level amongst Taiwanese companies to know about investment opportunities in Tamil Nadu and several Taiwanese companies are keen to engage with Guidance, for seamless facilitation,” said Taipei Economic and Cultural Center, Chennai, Director-General Ben Wang. It is learnt that there are over 15 Taiwan firms in the state.

The state is also home to over 200 Japanese companies and around 589 business establishments. The Japanese business establishment include liaison office/branch office etc. of Japanese company in India, Indian subsidiary of a Japanese company, business enterprise founded by Japanese nationals.

Japanese companies and establishments are in the manufacturing sector producing automobiles, transport equipment, machinery, electric machine and chemicals among others.

Japanese assistance

“There are many projects in Tamil Nadu assisted by Japanese ODA (Official Development Assistance). Constructions of Chennai Metro, Chennai sea-water desalinisation plant, and AIIMS Madurai are some ongoing projects,” Taga Masayuki, Consul – General of Japan in Chennai said.

When asked why so many Japanese firms have come up here, he said, “Availability of Industrial Zone/Township including those managed/supported by Japanese companies. Comparatively lower cost of labour and availability of quality engineers/professionals. Living conditions and availability of Japanese restaurants are other key reasons for firms investing here.”

Availability of good international schools is another reason residents and key officials of companies from these countries come and live in Tamil Nadu. The growth of these companies has also led to the creation of country-specific restaurants, bakeries, and shops. Today, the state has several Korean and Japanese restaurants.

For foreign investors and for relocation investments, the state offers additional incentives as part of the Industrial Policy 2021 which include relocation benefits, a direct subsidy on its capital investment, incentives to boost the R&D innovation projects etc.

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