Pull up socks, step on the gas – Times of India

Chennai News

Tamil Nadu tops the electronic vehicle (EV) investment pile in India with `16,000 crore in its kitty and having generated 26,000 jobs. Top investors such as Ola and Ather are expanding capacity, and Hosur-Krishnagiri has emerged as a hub. According to Guidance Tamil Nadu, the state is expected to attract $7 billion (`50,000 crore) investments in the sector by 2025, resulting in 1.5 lakh jobs. By 2030, Tamil Nadu is expected to manufacture 30% of all electric vehicles sold in India. Much of this is happening thanks to the state’s traditional strength in automobiles, and original equipment manufacturers and parts makers, besides entrepreneurs, are planning to join the party. EV incubation centres in SIPCOT Parks in Sriperumbudur and Hosur, and the support from IT Madras Incubation Cell are juicy investment carrots. TN has a strong ecosystem for EV auto components like lithium-ion batteries, electric motors, PCBs thanks to ancillary makers like Grinntech, Lucas TVS, Li Energy, Foxconn, Mitsuba and Salcomp. With the state set to announce an upgraded EV policy, the sector is likely to drive the $1 trillion dream.
With 60% of India’s tanning capacity, Tamil Nadu is the leader in finished leather production and home to more than 1,650 companies in the sector that employs six lakh people, of whom 85% are women. Footwear and leather products are also a critical export driver. Tamil Nadu has 45% share of India’s leather export and 38% of India’s footwear & leather products output, but it has only 2% share of global finished leather supply. The state government has identified four locations – Panapakkam, Bargur, Perambalur & Tindivanam – to set up leather parks to attract FDI. With the special economic zone in Cheyyar and Ambur Trade Centre and a testing lab at Ranipet, the state has an infra-edge. The common facility centre being set up in Melvisharam will help build sectorspecific infrastructure. Given how labour intensive this sector is, it will continue to be critical from the employment angle.
In 1978, Tamil Nadu became the first state to set up a pharma park. Today a home for global pharmaceutical and medical device manufacturers, it is set to be a hub for medical equipment production too. The medical electronics industry in the state has witnessed double-digit growth in recent years. According to Guidance Tamil Nadu, the state has 2.6% share in national output, with $1 billion in total output for the pharma & biotech sector. The state contributes 4.3% of employment and 2.5% of exports in the sector at the national level. In vaccines and recombinant therapeutics, the current market of $1 billion could double in less than five years, says Guidance Tamil Nadu. There is also a growth option in biotech startups, where TN has a 5.2% share.
The state government has just announced its Aerospace and Defence Industrial Policy to attract investments of `75,000 crore and provide employment to one lakh people over a decade. In terms of investment, value added production and employment generation, this is a critical sunrise opportunity. The combination of entrepreneurial culture and government policy and infrastructure support like the Defence Corridor and the 250-acre of Aerospace Park by TIDCO (expandable to 500 acre) are scalable models to attract investment and tech talent. Investments on the Defence Corridor worth `3,100 crore have been announced. An Aircraft Maintenance Repair Overhauling facility in Krishnagiri and an upcoming one in Chennai will further catalyse growth. The government is targeting exports of `35,000 crore ($5 billion) by 2025.
This is a critical area as it feeds R&D and EV parts and is also covered by the productionlinked incentive scheme of the Union government. The state government has reduced the investment threshold for incentives in this sector from `500 crore to `200 crore. About 20% of India’s electronics production comes from TN which is also a major electronics exporter. The multi-sector SEZs at Oragadam and Sriperumbudur focus on electronic hardware, with big companies such as Foxconn, Pegatron, Siemens and Sony. Given the focus on valueadded production in the state’s industrial policy, TN has been aggressively promoting electronics system design and manufacturing (ESDM) and since July 2021 the sector has seen eight memorandums of understandings with a combined investment commitment of `40,000 crore and employment potential of 12,150 jobs. The state’s electronics investment strategy rides on its skilled manpower advantage and an effort to move upstream into designing electronics components. If TN has to get into cutting edge future technology, electronics will need to be a key driver.

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