Policy as growth catalyst

Tamil Nadu’s industrial base is one of the most diverse in India -- from automobiles and automotive components, machinery, textiles, leather, electronics, to IT and ITeS, and everything in between. Progressive policies have aided this growth across sectors and the state keeps revisiting them or drawing up new ones to address emerging needs.

Tamil Nadu’s industrial sector delivered impressive numbers in 2023-24 as well, contributing 11.46% of India’s Industrial Gross Value Addition (GVA) and 13.12% of India’s manufacturing GVA. Within the state, the manufacturing sector contributed 18.33% of GDP, generating a GVA of `4.9 lakh crore, according to the industries department’s policy note.

In a continuation of this approach, Tamil Nadu govt last month announced it will come out with policies for more sectors including space tech, circular economy and toy industry, besides a roadmap for the creative economy.

“By analysing the areas with significant investment promise, we have created targeted policies with a sharper focus and specific outcomes,” says industries minister T R B Rajaa.

The upcoming space tech industrial policy will, he says, aim to leverage the state’s existing talent pool and the strides being made by companies such as Agnikul. This policy will build on the solid foundation already established.

Srinath Ravindran, Agnikul’s CEO, says that with the establishment of Kulasekarapatnam launch pad, Tamil Nadu could well become the space hub of Asia. “Tamil Nadu should reach out to companies such as InSpace to work on both national and international space missions. We are geographically well positioned and close to the Equator. We should drive this advantage to emerge as a major player by being as friendly as we were to the automobile industry. The next four-five years are crucial and we should encourage space technology manufacturing through higher subsidies and better inter-industry coordination,” he says.

The state is already the green energy leader and EV capital of India, says Raja, adding that the next step is embracing circularity. The circular economy investment promotion policy will foster a green energy ecosystem, facilitate knowledge transfer and reinforce the state’s leadership in sustainable development.

“The industry expects the new policy to be a catalyst, driving investments and generating employment by championing the reuse, recycling, renewal and refurbishment of value-added products,” says Mahesh Ramachandran, CEO, Commonwealth Inclusive Growth Services Ltd; founder, Tech Innovations; and General Partner, Pontaq Cross Border Investment Fund.

In the case of toys, the `600-crore industry is set for a big jump thanks to the expanding domestic potential, with the ban on Chinese products, and opportunities for export. So, the state will soon have a toy manufacturing policy to boost local production and create jobs too.

“The toy market in Tamil Nadu is growing rapidly and I wholeheartedly welcome the state govt’s move to come out with an exclusive policy for the toy industry,” says R Jeswant, CEO of toy manufacturer Funskool India . “With this policy, more manufacturers will be keen to invest in Tamil Nadu. I expect the policy to address warehousing needs and also have provisions for export of toys,” he adds.

The roadmap for the creative economy will harness the immense potential of the entertainment industry, which is larger than the IT sector globally. By supporting arts, culture and creative enterprises, the govt aims to transform Tamil Nadu into a vibrant hub for creativity and innovation, leveraging its world class technical talent in the entertainment sector.

“All these initiatives reflect our dedication to fostering a diverse, inclusive and sustainable economy. We look forward to collaborating with all stakeholders to bring these visionary policies to life and drive Tamil Nadu towards a prosperous future,” says Rajaa.