Tamil Nadu to diversify manufacturing from consumer electronics and textile to EV - DIGITIMES

Delegation from India's Tamil Nadu authorities authorities visited Taiwan astatine the extremity of October, astatine the bottommost of the extremity of quarantine requirements for travelers to Taiwan. The delegation had meetings with electronics shaper Foxconn, Pegatron, Taiwan Electrical and Electronic Manufacturers' Association (TEEMA), and the Taiwan Footwear Manufacturers Association (TFMA) and galore much during their sojourn to Taiwan.

Delegation from Tamil Nadu included Mr. Saranyan Krishnan, further main caput of industries, concern promotion and commerce section of the Tamil Nadu authorities and Ms. Pooja Kulkarni, CEO& MD astatine Guidance Tamil Nadu, the nodal concern promotion bureau of the authorities of Tamil Nadu.

Tamil Nadu accounted for 9%, oregon astir US$300 billion, of India's nationalist GDP successful 2021. The confederate authorities plays a captious relation successful India's manufacturing assemblage with the industries thriving astir the authorities capital, Chennai, and crossed different concern locations successful the state.

Foxconn's iPhone accumulation is chiefly based connected the rim of Chennai; Hyundai Motor Company built its facilities adjacent to the superior metropolis arsenic well. Pegatron, Delta Electronics, Dell, Flex, Daimler, Yamaha, Salcomp, Tata Electronics, Ola Electric, and Taiwan's largest shoemaker Feng Tay Enterprise are besides manufacturing successful Tamil Nadu.

The delegation visited Taiwan with the ngo to lure much concern from electronics manufacturing, method textiles and footwear, and electrical conveyance (EV) manufacturing to assistance the authorities execute concern diversification and to turn into a US$1 trillion-economy by 2030.

In summation to Taiwan, countries specified arsenic Japan, South Korea, Singapore, Germany, France, and the US are the absorption countries for Tamil Nadu. The delegation's purposes see ramping up the state's concern maturation and navigating the post-pandemic "China positive 1 positive one" strategy.

Caught up by the ongoing US-China contention similar galore different countries successful the world, India, particularly Tamil Nadu state, has seen a ample magnitude of overseas concern pouring in. India, too, imposed strict restrictions connected Chinese investments since the Pulwama onslaught successful 2019, which has resulted successful a narration dip betwixt India and China.

Krishnan said the authorities authorities offers flexible incentives and takes speedy actions successful clearing obstacles for overseas investors. He said, "Tamil Nadu offers a flexible and customized inducement operation to conscionable antithetic concern requirements".

Starting from 1992, the authorities authorities and the concern promotion bureau Guidance Tamil Nadu person been devising sector-specific policies and making tweaks and modifications for overseas manufacturers. The argumentation flexibility and governmental stableness person allowed the authorities authorities to support dynamic connection with companies and to assistance manufacturers resoluteness issues.

Krishnan added that the state's governmental parties stock a communal extremity – that is to perpetrate to bringing much concern to thrust economical growth, truthful whichever enactment comes successful power, determination is argumentation stableness and continuity.

Industrial diversification ranging from electronics, textile, footwear to EV

The planetary pandemic was a acquisition learned successful the hard mode for the proviso chain. In the post-pandemic times, Tamil Nadu is seeking to summation diverseness successful presumption of economical maturation and concern development, realizing that the system cannot beryllium babelike connected lone a fewer sectors. This was evident during the archetypal question of the pandemic wherever Tamil Nadu was among the fewer states successful India signaling a affirmative growth.

One of the ways to diversify the economy, according to Krishnan, is to fortify the electronics worth concatenation by mounting up manufacturing of a wider scope of products - from chips, components, cameras, end-devices, car electronics to EV batteries, non-leather footwear and etc. Other ways of achieving concern diversification see processing the EV manufacturing ecosystem. Tamil Nadu besides seeks to geographically diversify by constructing much concern clusters crossed the authorities and evenly dispersed manufacturing activities.

Electronics assembly usually requires enactment workers to unrecorded successful dormitory and to enactment circular the clock; textile factories, successful contrast, are mostly acceptable up successful the countryside and workers tin enactment regular 9-5 shifts. Labor workers for the textile and footwear companies person mostly seen improvements successful beingness quality, said Krishnan. The Tamil Nadu Government, therefore, wants to bring much textile and footwear manufacturers to India.

Feng Tay acceptable up its archetypal installation successful Tamil Nadu successful 2006 and present they are gathering the 3rd mill already. The shoemaker has created astir 40,000 occupation opportunities truthful the authorities authorities is anxious to replicate that concern model. The government's program is to physique astir 30 specified ample factories crossed the authorities with astatine slightest 1 successful each district, said Krishnan.

During the sojourn to the TFMA successful Taichung, Kulkarni noted that 50% of India's footwear exports were made successful Tamil Nadu and the authorities plans to incentivize caller concern by providing varying magnitude of subsidies connected onshore acquisition, IP protection, biology infra construction, and more, based connected the concern scale, location, and the fig of occupation opportunities created.

PwC Taiwan spouse for planetary taxation services Tim Pao added that India does not exempt firm income tax, but manufacturers entering accumulation successful India by March 2024 could opt for a 15%-subsidy for income taxes. However, compared to the rewards for ample manufacturers, subsidies for small- and medium-sized manufacturers look overmuch little appealing.

For a caller concern clump to signifier and person a beardown proviso chain, India authorities needs to summation subsidies for SMEs, said Pao.

A 'trillion-dollar economy' goal

Being India's second-largest GDP contributor, Tamil Nadu is eyeing to make a implicit ecosystem of EV manufacturing from two-wheelers, cars, car electronics to EV batteries. Krishnan said Tamil Nadu already has a beardown instauration of gathering EVs, and currently, one-third of the EVs manufactured successful India were made successful Tamil Nadu.

"There is simply a ample conception of two-wheeler and three-wheeler accumulation successful Tamil Nadu and car manufacturing is picking up. For example, Hyundai's largest mill extracurricular of South Korea is successful Tamil Nadu," said Krishnan.

For the past 3 years, the authorities has seen concern proposals of astir US$50 billion, combing home and overseas investment. Even during the COVID years, Tamil Nadu received the highest concern proposals among each states - astir US$10-15 cardinal annually.

The ratio of assemblage graduates to collegial-aged colonisation of 17 to 23 successful Tamil Nadu exceeds 50%, which is astir two-times higher than the nationalist mean of 27%.

Tamil Nadu is marching towards a trillion-dollar system hopefully by 2030. Its economical size present is astir US$300 billion.

According to PwC's Pao, India's peculiar economical portion (SEZ) was chiefly export-oriented but restrictions connected home merchantability person relaxed.

Manufacturers successful the SEZ are present capable to find ways to entree India's home user market. Moreover, India's caller bill, the "DESH" (Development of Enterprise and Service Hubs Bill), is intended to upgrade the SEZ and unfastened up to the work sector, said Pao.

The DESH is expected to travel done parliamentary treatment successful the archetypal 4th of 2023.

Krishnan concluded the interrogation by pointing retired that Tamil Nadu offers a diversified, profitable spot to bash concern and a ample user base. As India's income level goes up, user electronics and footwear are the 2 commodities that India wants to nutrient astatine a terms that is affordable for Indians.

Tamil Nadu delegation gathering with TEEMA; Source: ITA