ENVIS Centre, Ministry of Environment & Forest, Govt. of India

Printed Date: Tuesday, May 21, 2024


            The industrial sector is a driver of economic growth. Industrial sector is important in terms of its contribution to Gross State Domestic Product (GSDP) and employment. This sector which is vital in stimulating growth of the economy is closely interconnected with primary and tertiary sectors through its forward and backward linkages. Industrial policy initiatives in the State are designed in the backdrop of the increasing multifaceted globalization of production systems, especially, in terms of technology transfers and development of physical infrastructure for higher growth.
           The Industrial Policy has its focus on optimal use of resources, up gradation of managerial skills and administrative, technical improvement and modernization in the fields of manufacturing and infrastructure sectors for higher growth. In the Information Technology sector, the State is a leader. Chennai has become a hub of software industry. Besides Information Technology, the State has made strident progress in automobile sector and is poised to record significant growth in the Textile Sector in view of the abolition of the Textile Quota regime and the Electronics revolution in Tamil Nadu by attracting Ford, Hyundai, Nokia, Foxconn, Flextronics, etc. 
            Today, Tamil Nadu has emerged as the Second largest state economy following Maharashtra which has a much larger area and population.  Tamil Nadu is ranked first among Indian states in terms of exporting and operational SEZs. During the year 2015-16, exports from SEZs in Tamil Nadu was Rs.82,717 crore.  Tamil Nadu is ranked first among Indian states in terms of quantum of exports from Special Economic Zones.  Vision Tamil Nadu 2023 envisages an investment of Rs.15 lakh crore being invested in the State before the year 2023.   This includes investment in projects falling under manufacturing, infrastructure and services sectors.   According to CMIE, at the end of June 2016, Rs.11.09 lakh crore investments are in pipeline in the State.  To promote further investment and facilitate infrastructure projects on Public Private Partnership mode, Government of Tamil Nadu has already enacted Tamil Nadu Infrastructure Development Act 2012 and constituted the Tamil Nadu Infrastructure Development Board accordingly.   At present, out of 217 infrastructure projects listed in Vision Tamil Nadu 2023, 88 projects are under various stages of implementation.  With the implementation of the remaining projects, the milestones envisaged in “Vision Tamil Nadu 2023” will be achieved.
Tamil Nadu Industrial Investment Corporation Ltd. (TIIC): 
TIIC is the first State level financial corporation in the country catering to the needs of MSMEs, especially first generation entrepreneurs. It also provides financial support to major industrial units in the State. Portion of financial support by the TIIC in recent years is given to Sugar, Cement, Textile, Textile Machinery and Aluminum Industries. It has its role in promotion of Industrial Clusters like Hosiery in Tiruppur, Textiles and Foundries in Coimbatore, Sericulture and Sago in Salem and Dharmapuri, wind mills in Tirunelveli, Palladam, Udumalpet etc. 
Tamil Nadu Small Industries Development Corporation Ltd. (TANSIDCO) :
    TANSIDCO was established with the main objective of assisting and promoting the interests of Micro, Small, and Medium Enterprises in the State. Its Vision is “to forge sustainable partnership with the MSMEs for enhancing their competitiveness” in the market structures.  To achieve the Vision, SIDCO is also taking pro-active steps towards the development of Industrial Estates and Associated Social Infrastructure, Promotion of Cluster and Common Facility Centres for MSMEs.   Further, it is rendering its help in purchasing of industrial inputs and provides best managerial and manufacturing practices, acquire capital and assist in marketing of manufactured products for MSMEs in the State Currently, SIDCO is maintaining 35 Industrial Estates created by Government of Tamil Nadu and 59 Industrial Estates established on its own. Two Industrial Estates were set up each one at Rasathavalasu (Tiruppur district) and Venmanathur (Villupuram district) and remaining 13 are in different stages of progress. Vision Tamil Nadu 2023 envisages that SIDCO shall ensure that the common facilities and utilities are adequately provided in the industrial estates for development of SMEs as a strategic initiative to make SMEs more vibrant. SIDCO also helped to supply raw materials like iron and steels, wax, potassium chlorate and TNPL paper and extend marketing assistance to MSMEs to facilitate selling their finished items and sale of bulk procured raw materials.
State Industries Promotion Corporation of Tamil Nadu Limited- (SIPCOT):
          SIPCOT caters to the needs of large-scale industries in the State. It has been extending financial assistance to the needy units and maintaining industrial complexes with basic infrastructure facilities to large industries.  In the post reform period, the developed industrial complexes of SIPCOT have housed various manufacturing industries viz. Daimler, Hyundai, Saint Gobain, Dell, Renault and Nissan, Ashok Leyland, Nokia etc. It also acts as a nodal Agency for implementing industrial assistance schemes announced by the Government of Tamil Nadu and by extending its various incentive measures to mega industries established in the State with high investment and employment potential.  SIPCOT developed 19 Industrial Complexes including seven Special Economic Zones (SEZs) in 12 districts by acquiring 27000 acres of land for this purpose. Out of which, 20806 acres of land had been allotted to 2184 industrial units, thereby attracting Rs.1.00 lakh crore of investment in the production of manufacturing products and creating direct and indirect employment opportunities to 5.55 lakh persons.
          It is aimed to promote more number of industrial parks in Southern districts to make it an industrially focal point. It was proposed to create a Land Bank of 20,000 acres to fulfill the goals of Tamil Nadu Vision 2023.  It also identified another 25,000 acres to spur the industrial development in backward districts SIPCOT had promoted seven Sector-specific Special Economic Zones (SSSEZs) over an extent of 2231 acres in the State viz. Hi-Tech SEZ in Sriperumbudur and Oragadam, Engineering Sector SEZ at Perundurai, Transport Engineering SEZ at Gangaikondan, Sector Specific SEZ for Engineering at Ranipet, Granite Industries SEZ at Bargur and Leather and Footwear Product SEZ in Irungattukottai.    Many industrial giants like Dell, Samsung Electronics, Motorola, Sanmina, Moser Baer have established their industries in the Special Economic Zones.
Tamil Nadu Industrial Development Corporation Ltd. (TIDCO):
  • TIDCO is promoting medium and large industries in the State through joint, escort ventures, in association with private sectors. It facilitates undertaking large industrial and infrastructural projects by involving capital and employment-intensive industries in the State with a vision to make the State the numerous no in the country.
  • TIDCO has promoted several joint ventures for manufacturing products such as wristwatches, auto parts / components, iron and steel products, textiles, chemicals, fertilisers, pharmaceuticals, energy infrastructure, petroleum and petro chemicals, food and leather products.
  • It has also ventured into setting up of IT / ITES Parks, Bio-Tech Parks, Special Economic Zones, Infrastructure and road development projects and Agri Export Zone. The Special Investment Region Projects are also being promoted by TIDCO in joint ventures.  Now TIDCO has proposed to develop an Integrated Financial Service Centre (IFSC) near Chennai to attract domestic and overseas financial institutions to spark industrial development by providing financial support to the industries to be set up in the State.
  • Tamil Nadu Industrial Guidance and Export Promotion Bureau The Guidance Bureau was established in 1992 with the objective of attracting major industrial projects in to the State. It also facilitates single window clearance and implements ASIDE Grant (Assistance to States for Infrastructure Development of Exports and Allied Activities). 
  • The Guidance Bureau receives proposals for ASIDE Grant, scrutinizes to verify their eligibility and places them in the State Level Export Promotion Committee (SLEPC). A list of 44 projects was identified by the State to realize the ‘Tamil Nadu Vision 2023’. The TIDCO had re commended them to get grant from the Government of India.  
 Major Industries of Tamil Nadu 
1.      Information Technology
        As per National Association of Software and Services Companies (NASSCOM), the Southern States continue to account for more than half of the country's total export of software.  Tamil Nadu and Andhra Pradesh combined together accounted for 59.6 per cent of India's total software exports. Tamil Nadu was the second largest software exporter in the country next only to Karnataka.
 2. Manufacturing & engineering industry
        The manufacturing industry is one of the vibrant sectors of the state economy and contributes significantly to the industrial output. The manufacturing industry broadly covers manufacture of machinery and equipment, transport parts, basic metal and alloy industries, metal products and repair of capital goods.
         Tamil Nadu's share of the industrial output is around 11 to 12 per cent of the country's output and 15 per cent of the country's exports excluding software exports. Tamil Nadu accounts for about 17 per cent of India's software exports.
 3. Automobile industries
             The share of Tamil Nadu in all India production of automobiles and heavy vehicles is rather significant. Automobile industry plays a crucial role in the State economy and has been one of the key driving factors, contributing 8 per cent to State GDP and giving direct employment to 2,20,000 people. 
     Tamil Nadu accounts for about 21 per cent of passenger cars, 33 per cent of commercial vehicles and 35 per cent of automobile components produced in India. Major automobile manufacturers like Ford, Hyundai, HM-Mitsubishi, Ashok Leyland, TAFE, etc. have their manufacturing base in Tamil Nadu. 
4. Leather industry
        The growth of the leather industry in the state of Tamil Nadu is due to the large tannery ase established here over the last two centuries. According to the Tamil Nadu New Industrial Policy 2003, the state accounts for 70 per cent of leather tanning capacity in India and 38 per cent of leather footwear and components. The exports from Tamil Nadu are valued at about US $ 762 million, which accounts for 42 per cent of Indian leather exports. 
5. Paper industry
         Tamil Nadu is an important paper producer in the country. Tamil Nadu News Prints Papers Ltd., a Public Sector Undertaking of Tamil Nadu is manufacturing news prints, printing and writing papers having high sales performance. This paper industry entered into a tie up arrangements with six sugar mills to use bagasse on substantial basis. It has maintains 'zero stock balance'and earning highest profit among the SPUs over the years. 
6. Chemical & Plastic industry
         The Chemical industry in India accounts for a turnover in excess of Rs.48,000 crores and is one of the fastest growing sectors of the economy. The sector contributes 13 per cent to the State's GDP and constitutes 8 per cent of the total exports of the country. 
7. Textile industry
        The textile industry occupies a prominent place in the economy in terms of its contribution to industrial output, generation of employment and earnings of foreign exchange. The textile industry in the State until recently faced hardships like general recession in the textile sector, fluctuation in the market trend, inadequate quality of cotton supply, paucity of funds and technological existence of obsolescence in many items and WTO induced post quota market changes. Consequently, the textile industry recorded modest growth. 
8. Handlooms and power looms
         The handloom sector in the State is the single largest cottage industry providing livelihood to a large number of rural people and promoting export earnings. The handloom sector and its related economic activities generate gainful employment for more than 4.29 lakh weaver households and 11.64 lakh weavers in the State. These societies mainly produce the cloth required for the scheme of "Free Supply of Uniforms to School Children and Free Distribution of Sarees and Dhoties Scheme". 
9. Sugar industry
          Sugar Industry in Tamil Nadu is an important agro based industry. It plays a vital role in the economic development of the State and particularly in rural areas. The Sugar Industry provides large scale direct employment to several thousands and indirect employment to several lakhs of farmers and agricultural laborers in the rural areas who are involved in cultivation of sugarcane, harvesting, transport and other services. There are 34 Sugar mills in Tamil Nadu, of which 16 are in cooperative sector and 18 in the private sector.
10. Cement industry
          The production performance of cement industry in the State is encouraging. The operational efficiencies of cement industries have improved because of concerted efforts taken by major industries through the process of mergers and acquisition of small and medium ones. 
Environmental Protection
        To dispose of the hazardous industrial waste by suitably converting the waste, a massive scheme viz., Hazardous Waste Treatment, Storage and Disposal Facility (HWTSDF) has been implemented in an extent of 26.91 acres at Export Promotion Industrial Park (EPIP), Gummidipoondi by IWMA through Tamil Nadu Waste Management Limited.
          SIPCOT has initiated action to create the similar facility in two places one at SIPCOT Industrial Complex, Thoothukudi and another one at SIPCOT Industrial Growth Centre, Perundurai to an extent of 20 acres each, through Industrial Waste Management Association (IWMA).
Policy Note-2017-2018