Tamil Nadu is the fourth-largest state of India. It has a diversified manufacturing sector and features among the leaders in several industries like automobiles and auto components, engineering, pharmaceuticals, garments, textiles, leather, chemicals, plastics, etc. It ranks first among the states in terms of the number of factories and industrial workers.
Tamil Nadu Industrial Development Corporation Ltd (TIDCO), State Industries Promotion Corporation of Tamil Nadu (SIPCOT), Tamil Nadu Industrial Investment Corporation Limited (TIIC), and Tamil Nadu Small Industries Development Corporation Limited (TANSIDCO) are jointly developing industrial infrastructure in the state.
At current prices, Tamil Nadu’s gross state domestic product (GSDP) is estimated to be Rs. 35.67 trillion (US$ 419.74 billion) in FY26. The state’s GSDP to increase at a CAGR of 11.84% between FY19 and FY26.
As of FY26 (April-September 2025), the state had a total installed power generation capacity of 43.90 GW.
Thermal power contributed 15,818.34 MW to the total installed power generation capacity, followed by renewable power (24,459.86 MW), hydropower (2178.20 MW) and nuclear power (1448.00 MW).
Private sector, with a capacity of 30,239.07 MW, was the biggest contributor to the total installed power generation capacity in Tamil Nadu, followed by state utilities 7,144.98 MW and central utilities 6,520.35 MW.
According to DPIIT, cumulative FDI inflow^ in Tamil Nadu stood at Rs. 1,53,394 crore (US$ 17.29 billion) between October 2019 to June 2025. The state ranked fifth in India in terms of FDI inflows.
Total merchandise exports from the state stood at Rs. 4,61,757 crore (US$ 52.07 billion) billion in FY25.
The state exported key items such as Engineering Goods, Electronic Goods, Ready-made garments of all textiles, Cotton Yarn/Fabs/Madeups, Handloom Products, Leather and Leather Manufactures and Gems and Jewellery.
According to the Telecom Regulatory Authority of India (TRAI), Tamil Nadu had 76.09 million wireless and 3.82 million wireline subscribers, as of June 2025.
Tamil Nadu had a high tele-density of 104.32%, as of June 2025.
Some of the major initiatives taken by the Government to promote Tamil Nadu as an investment destination are:
- On September 6, 2025, the Government of India announced an allocation exceeding Rs. 93,000 crore (US$ 11.20 billion) for major port-infrastructure projects in Tamil Nadu, signalling a strong commitment to strengthening maritime connectivity, boosting trade and supporting regional economic growth.
- On August 15, 2025, the Tamil Nadu Government approved industrial projects worth Rs. 1,937 crore (US$ 218 million) expected to create 13,409 jobs, across sectors including electronics manufacturing, engineering design, technical textiles, renewable energy R&D, information technology and food & agri-tech.
- On June 29, 2025, the Tamil Nadu Government approved a Rs. 8,000 crore (US$ 902 million) investment under the Mudalvarin Grama Saalaigal Membattu Thittam (MGSMT) to upgrade 20,000 km of rural roads. Already 12,572 km across 9,690 projects have been completed at a cost of Rs. 4,609 crore (US$ 519 million) and another 6,671 km is in progress with Rs. 3,529 crore (US$ 397 million) sanctioned.
- The Chengalpattu district in Tamil Nadu is set to host a new biotech industrial park, with the Tamil Nadu Industrial Development Corporation (TIDCO) inviting bids to create its master plan and detailed project report. The facility will cater to advanced manufacturing, research collaborations and biotech-specific infrastructure across pharmaceuticals, vaccines, biologics, agritech and marine biotech.
- Budget allocations for FY26
- Rs. 18,456 crore (US$ 2.17 billion) has been designated for capital expenditure on roads and bridges.
- Rs. 7,546 crore (US$ 887.8 million) has been designated towards power subsidy for domestic consumers.
- Rs. 2,000 crore (US$ 235.3 million) has been made for the implementation of the Kalaignar Nagarpura Membattu Thittam, along with Rs. 850 crore (US$ 100.0 million) designated for the Singara Chennai 2.0 scheme.
- Rs. 13,974 crore (US$ 1.64 billion) has been allocated for government secondary schools and Rs. 14,328 crore (US$ 1.69 billion) for government primary schools.
- Rs. 5,926 crore (US$ 697.2 million) allocated towards allopathic urban health services.
- SIPCOT (State Industries Promotion Corporation of Tamil Nadu Limited) will develop an Integrated Textile Park, spanning 111 Acres in Salem district with an estimated investment of Rs. 800 Crore (US$ 96.62 million).
- A 3-storey industrial complex, spanning 5 Acres will be developed at Sakkimangalam Industrial Estate in Madurai district by TANSIDCO (Tamil Nadu Small Industries Development Corporation Limited) at Rs. 118 crore (US$ 14.25 million).
Tamil Nadu is one of India’s most industrialised and export-oriented states, with a large, diversified manufacturing base spanning automobiles, electronics, textiles, engineering, pharmaceuticals and leather. With a GSDP of US$ 419.74 billion in FY26 and strong FDI inflows, the state is a major contributor to India’s exports, supported by world-class infrastructure including extensive road and rail networks, major ports, airports and a robust power system led by renewable energy. Continued policy support for manufacturing, IT, GCCs, agriculture, logistics and urban development, alongside sustained public investment, positions Tamil Nadu as a leading engine of industrial growth, innovation and global trade in India.
