Tamilnadu:

Investment Policies and Incentives

In order to attract investment into the various sectors of the State and thus contribute to the development of the
economy as a whole, the government of Tamil Nadu has made several policy announcements. These policies have
unveiled a roadmap and graphed a trajectory for bolstering the industrial climate of the state and remove various road
blocks which hampered the industrial expansion of the state. These policy documents also envisage the investment
incentives and schemes for the investors.
The major being the industrial policy , announced with a mission to accelerate human development in Tamil Nadu by
maximizing investment, output, growth, employment and manufacturing competitiveness through infrastructure and
human resources development in industries and services sectors. The key objectives of the Industrial Policy are to:-
Position Tamil Nadu as the most attractive investment destination.
Facilitate industry capturing a larger share of world trade in goods/services.
Reform regulatory processes and remove procedural hurdles in business.
Enable integration of existing industrial clusters with global supply chains.
Build efficient and dependable industrial infrastructure.
Develop human resources and intellectual capital to world standards.
Encourage symbiosis with SMEs in major industry clusters.
Another important policy being the information technology policy , which has the vision of putting a smile of
prosperity on the face of every citizen of Tamil Nadu by leveraging information technology (IT) to create value and wealth
for a knowledge-based State. The Key objectives of the policy are to:-
Establish the state as the destination of choice for IT investments
Upgrade the quality of life for the citizens through e-governance and IT applications in government.
Empower people in the rural areas so as to bridge the digital divide.
Develop research and development initiatives.
Promote use of Tamil in information technology.
Similarly, the information technology enabled services (ITES) policy has been announced with the vision of making
Tamil Nadu the Global ITES Capital; attracting increased foreign direct investments; creating large-scale employment
opportunities and adding value and wealth by leveraging the inherent strength of the State. Its objectives are to:-
Get the maximum global ITES investments to Tamil Nadu
Develop Human Resources specific to ITES Sector
Create world class infrastructure for IT & ITES and an enabling frame work for protection of intellectual property
and data
Generate employment and other ITES opportunities in major cities in Tamil Nadu
Provide a conducive environment for the sector by reducing regulations and increasing opportunities.
Besides, a biotechnology policy has been announced with the objective of utilising the resource base of the State for its
overall economic development. As per the policy, the Government of Tamil Nadu aims to facilitate the establishment of
Biotechnology Enterprise Zones (Bio-Valleys) along the lines of Silicon Valley to exploit the bioresources of the State. Also
efforts will be made to encourage the establishment of different types of biotech entities consisting of research
organisations, service providers, as well as companies which will commercialise the new products and processes.


State Level Investment
India is a country with a rich and varied cultural heritage
and is one of the oldest civilizations in the world. It is
divided into twenty eight States and seven Union
Territories based on the diversity in culture and geography
of the regions. Each State/UT of India has a unique
demography, history, art and craft, dress, festivals,
language etc. which provides numerous opportunities for
the investors the world over. They are endowed with large
number of places of tourist interests like beautiful
landscapes, wildlife and forests, hills, plateaus, valleys,
monuments, forts, palaces, temples, etc. Each State have
distinct inherent strengths, ranging from abundant supply
of mineral resources and large forest reserves to the
availability of good fertile lands, which are suitable for
growing variety of agricultural and horticultural crops.
Several world-renowned companies/ industries exist in
these States which encourage large investments into the
country. They are largely confined to iron and steel,

cement, textiles, agro-processing, mineral-based
industries, drugs and pharmaceuticals, chemicals,
electronics, automobiles, etc. Various State Governments
have also recognised Information Technology (IT) industry
as an integral part of the economy, thereby attracting new
players into the market. IT revolution is committed to
provide good governance that ensures transparency,
reduction in transaction costs, efficiency and citizen centric
delivery of public services. Therefore, the Government is
making all efforts to facilitate the growth of such industries
and promote overall development of the economy.
Most importantly, the State Government has undertaken
several policy measures and incentives so as to provide
ample business opportunities. These policies seek to create
much-needed investment friendly environment in the
States, highlight the major foreign direct investment (FDI)
sectors and thus reflect the true position of the State
economy. For instance, the Industrial Policy has been
formulated with a view to accelerate industrialization
process of the State. While, Information Technology (IT)
policy has been framed to bring private investments into
the IT sector and develop a roadmap for e-governance.
Such developmental policies also aim to adopt strategies
for enabling the residents of States to take full advantage
of the employment opportunities.
However, for improvement of the quality of life of the
people of the State as well as promote rapid
industrialization and balanced development, infrastructure
facilities are highly required. The quality of infrastructure is
widely regarded as an essential determinant of growth in
the States. Agricultural growth depends upon rural
infrastructure such as the spread and quality of irrigation,
land development, extent of rural electrification and the
spread of rural roads. While, non-agricultural growth highly
depends upon sectors such as electric power, road and rail
transportation, ports and airports as well as
telecommunications. All these services increase the
productivity of existing resources going into the production
and helps to attract more investments. Moreover, it is
responsibility of the State Governments to provide such
critical infrastructure facilities required for the industrial
and commercial development of the State, for instance,
making available the power at an appropriate price and of
acceptable quality.
Hence, the economic growth and development of the
country is highly dependent on the administrative set up,
agricultural and industrial base; human resources as well
as infrastructural network of all the States/ UTs.
Accordingly, several opportunities and incentives are
offered to them, from time to time, so as to motivate
investors to invest therein. Some of the major States/UTs
of India, which attract large investments are given below.


Tamil Nadu


Tamil Nadu is the 11th largest State with an area of 1,30,058 Sq km out of country's
total area of 3166416 Sq km and the third most urbanised State next to Maharashtra and
Gujarat. It is located in the south eastern side of Indian peninsula with Kanyakumari as
the southernmost tip of the land. This tip is the meeting point of Bay of Bengal, Indian
Ocean and Arabian sea. Tamil Nadu has a long eastern coastline dotted with enchanting
beaches with Bay of Bengal in the east. It is bounded on north by Andhra Pradesh and
Karnataka, on the west by Kerala, on the east by the Bay of Bengal, and on the south by
the Indian Ocean.
Chennai, the capital city of Tamil Nadu, is the gateway of South India with an
international airport, sea ports and good rail and road network connectivity. Coimbatore, Madurai and Tiruchirappalli,
Salem and Tirunelveli are some of the other major towns in the state. The state has large number of good educational
institutions and is one of the leaders in the field of Science and Technology and particularly in Information Technology.
Tamil Nadu is one of the most developed states in the country. Literacy level in the state is one of the highest among all


Investment
Opportunities

Investment Policies
and Incentives

Infrastructure

Indian states. The state is witnessing rapid industrialization with overall economic development and has grown as a
manufacturing powerhouse in the country, especially in automobiles and textiles. The state's capital city, Chennai is
called the 'Detroit of India'. Its advantageous position can be expressed in the following terms:-
Fastest growing State Economy in India
One of the top three recipients of Foreign Direct Investment(FDI)
Matured manufacturing sector
Fast emerging as the IT happening destination
Pro-active and investor friendly Government with transparent decision-making approach
Ranks No.1 in availability of skilled manpower in India
Most sought after destination by MNCs
Excels in terms of human resource, infrastructure and labour relations
Low cost of man power
Given this, the Government of Tamilnadu has undertaken several policy measures and incentives in order to encourage
inflow of investment into the various sectors of its economy.


Investment Opportunities


Tamil Nadu is one of the well-developed States in terms of industrial development. The State Government is focused on
stimulating further industrial development, attracting investment, facilitating new manufacturing capacity and enabling
global manufacturing competence and competitiveness of local industry. Tamil Nadu has emerged as a front ranking
State in attracting investments.
Software & Electronics
Tamil Nadu has witnessed substantial growth in IT, ITES, BPO and IT Hardware manufacturing sectors. The number of
Software Units in the State is also growing rapidly. The rapid rise in the number of national and international players that
have chosen to establish their business establishments and manufacturing facilities as well as the expansion of the
activities of the established firms in this State is a firm indication that Tamil Nadu has emerged as a preferred destination
for domestic as well as foreign direct investment. Leaders in the Indian IT sector like Tata Consultancy Services (TCS),
Infosys, Wipro, Satyam, HCL, Patni Computers, I-Flex, Polaris and Hexaware as well as a galaxy of international majors -
Accenture, Verizon, Xansa, Office Tiger, Standard Chartered Bank, ABN Amro, Alcatel, Cognizant Technology have
established their operations in Tamil Nadu.
Agro and Food Processing
Tamil Nadu has rich resource endowment. Fruits such as Mango, Banana, Citrus Fruits, etc., and vegetables & spices are
abundantly available. Food Processing & Floriculture identified as thrust sectors by State Government for special
incentives. Owing to the ideal climatic conditions a strong agro-based food industry has emerged in the state. The state is
a world leader in agricultural production with a high yield per hectare of sugarcane, rice and groundnut.
Chemicals and Petrochemicals
The chemicals industry has grown rapidly in India and overseas. The state traditionally has a strong base in chemicals
industry. Manali, situated on the outskirts of Chennai, has emerged as a major petrochemical complex. Leading Producers
like Orchid, being the third largest manufacturer of sterile cephlosporin, Dadha Pharma, Malladi, Citadel, etc. have set up
in Tamil Nadu. Tamilnadu is the ideal location for: (i) contract manufacturing (ii) global sourcing base(iii) process
engineering for products going off patents (iv) manufacture of generic and other bulk drugs & formulations.
Petrochemical industry in Tamilnadu is in the threshold of rapid expansion.
Biotechnology
Tamil Nadu is rich in bioresources. The variety of geographical terrains in the State provides tremendous biodiversity
rarely seen in any other single State. The forest, agricultural and plant resource base of the State are both large and
diverse and represent great market opportunity for biotechnology products. There are more than 5,000 species of
flowering plants and the forest cover in the State spreads over 22,500 sq.kms. The State also has one of the largest
coastlines in the country which again presents opportunities for marine biotechnology. The State is also fortunate to have
a pool of experts in various areas of biotechnology with experience in commercialisation of biotech products. Tamil Nadu
is thus well-placed in terms of human resources to exploit the opportunities in biotechnology. Investment opportunities
exist in all the four segments of biotechnology, namely, (i) Medical / Human & Animal Healthcare; (ii) Agriculture; (iii)
Food; (iv) Environment; and (v) Industrial Products
Automobile Sector
The state has a well-developed automotive and auto component industry. It is the hub of Indian automobiles industry.
Several automobile and automobile ancillary units are located in Tamil Nadu. It has manufacturing facilities across the
automotive spectrum from tractors to battle tanks. Global auto majors like, Hindustan Motors and Mitsubishi have
commenced production plants. Ashok Leyland and TAFE have set up expansion plants in Chennai. Fortune 500 companies
such as Hyundai and Ford have established manufacturing facilities in the state.
Project Profiles
Tenders of Tamil Nadu Government
Project Opportunities by Tamil Nadu Industrial Development Corporation Ltd (TIDCO)


Government Support

An entrepreneur requires a continuous flow of funds not only for setting up of his/ her business, but also for successful
operation as well as regular upgradation/ modernisation of the industrial unit. To meet this requirement, the Government
(both at the Central and State level) has been undertaking several steps like setting up of banks and financial
institutions; formulating various policies and schemes, etc. All such measures are specifically focussed towards the
promotion and development of small and medium enterprises.
The government of India has been taking active steps to promote entrepreneurship in various industry & service sectors.
It has declared several policy measures and is implementing schemes and programmes to enhance the global
competitiveness of small enterprises across the country.
Acts, Rules & Regulation
Acts regarding MSMEs
Notifications regarding MSMEs
Policies of States and Union Territories for the Small Scale sector
Policies relating to Excise Duty
Policies relating to Foreign Direct Investment Approval
Policy of Reservation for Small Industries
Labour Policies for Small Scale Industries
SSI Policy Statement
Comprehensive Policy Package for Small Scale Industries and Tiny Sector