Tamil Nadu

Recent Developments in Key Sectors

• On September 23, 2025, the Goods and Services Tax (GST) Council announced across-the-board rate rationalisations which substantially benefit Tamil Nadu. These reforms include GST cuts to either nil or 5% on a wide range of goods such as textiles, handicrafts, and coir which are expected to reduce consumer prices by 6-11%.
• On August 7, 2025, Tamil Nadu announced four new Global Capability Centre (GCC) hubs in Coimbatore, Madurai, Tiruchirappalli and Vellore to expand operations beyond Chennai. The move, under the GCC Policy (2024-27), aims to boost regional innovation, talent development and IT-BPM growth through targeted incentives and infrastructure support.
• The Tamil Nadu State Budget for FY26 allocates Rs. 45,661 crore (US$ 5.15 billion) to agriculture and allied sectors, up from earlier years. Key measures include Rs. 12,500 crore (US$ 1.41 billion) for food subsidies, Rs. 17,000 crore (US$ 1.92 billion) for cooperative crop loans, Rs. 8,186 crore (US$ 923 million) for free electricity connections to farmers and the creation of 1,000 Chief Minister’s Farmers Service Centres offering integrated advisory support. The budget also boosts mechanisation, crop diversification and crop-insurance support with Rs. 841 crore (US$ 94.8 million) for premium subsidies.
• In FY25 the State of Tamil Nadu exported textile goods worth Rs. 70,855 crore (US$ 7.99 billion), which amounted to a 26.81% share of India’s total textile exports of Rs. 3,24,657 crore (US$ 36.61 billion).
• The Tamil Nadu tourism sector recorded a five-fold revenue increase, with earnings rising from Rs. 49.11 crore (US$ 5.5 million) in 2020-21 to Rs. 243.31 crore (US$ 27.4 million) in 2023-24.
• 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.
• Tamil Nadu has received one of the highest railway budget allocations among all states, amounting to Rs. 6,362 crore (US$ 0.76 billion). The state also introduced six Vande Bharat trains and the development of 77 model Amrit Rail stations, highlighting the state's significant investment in enhancing its railway infrastructure.
• Tamil Nadu got an outlay of Rs 6,331 crore (US$ 764.61 million) for various rail development projects during the fiscal 2024-25.
• 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).

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.