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India By State - Tamil Nadu - Business Opportunities

Business 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.

From a business perspective, Tamil Nadu offers numerous advantages to potential investors. There is a high literacy rate of 73.5 percent and the State has 13.53 percent share in FDI. It accounts for almost half of India's wind power generation and the per capita income is one of the highest in India

The State offers the largest capacity for engineering and polytechnic education and is one of the first states to articulate an ITES and biotech policy. There is a single window policy for all approvals. The state is home to the largest IT Park in the country and has the highest number of factories and export oriented units


Key Industries

Automotive & Auto Components

Chennai has been increasingly recognised as a prime export hub for automobiles in South Asia. Some of the well known automobile manufacturers based in Tamil Nadu are Ford, Hyundai, HM-Mitsubishi, Ashok Leyland, TAFE and TVS Motors have their manufacturing base in Tamil Nadu. The rapid progress in the auto industry can be attributed to skilled manpower and of course to the strong engineering sector. In addition to this, the ports at Chennai and Tuticorin further help to facilitate the export and import of materials for the industry. Tamil Nadu has a 30 per cent share each in the Indian automotive and auto components industries, 17 per cent in the trucks segment and 20 per cent each in passenger cars and two wheelers. Its current annual output in the automotive sector is estimated to be $3-3.5 billion and the contribution of the sector to the GSDP is 7-8 per cent. It has been actively involved Chief players in the automobile and auto ancillaries sectors are Ford, Hyundai, Visteon, Mitsubishi, Rane TRW, Ashok Leyland, and PRICOL.

The Auto Industry in Tamil Nadu is one of rapid progression and growth. Tamil Nadu has a 30 per cent share each in the Indian automotive and auto components industries, 17 per cent in the trucks segment and 20 per cent each in passenger cars and two wheelers. Its current annual output in the automotive sector is estimated to be $3-3.5 billion and the contribution of the sector to the GSDP is 7-8 per cent. The State is actively involved in the manufacture of high quality electrical, braking / suspension parts and engine parts and is aiming to achieve an output of US $18 billion in the sector.

The rapid progress in the auto industry can be attributed to skilled manpower and of course to the strong engineering sector. In addition to this, the ports at Chennai and Tuticorin further help to facilitate the export and import of materials for the industry. In fact, Chennai in particular is being increasingly recognised as a prime export hub for automobiles in South Asia. Some of the well known automobile manufacturers based in Tamil Nadu are Ford, Hyundai, HM-Mitsubishi, Ashok Leyland, TAFE and TVS Motors.

Banking and Financial Services

Chennai serves as the hub of financial activities in South India having a strong presence of major Indian financial institutions and foreign banks. Several banks have their back offices in Chennai. Some of the well known names in the banking and financial services sector are ABN Amro, Scope International and World Bank.

Chemicals & Petrochemicals

The chemicals industry has grown rapidly in India and overseas. The state of Tamil Nadu in particular, traditionally has a strong base in the 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. Tamil Nadu 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.

If we compare the growth of this sector in the year 2005-06 over its previous year, there has been a growth of almost 20 percent which is remarkable.

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With 12 well established plants, the state is counted among one of the leading cement manufacturers in the country. During 2005-06, cement production added up to 14.3 million tonnes per annum (mtpa). Its domestic consumption is almost 11.1 mtpa and its exports are around 0.3 mtpa. Key players in the cement industry having their base in Tamil Nadu are ACC, India Cements, Madras Cements, Chettinad Cements and Tamil Nadu Cements Corporation.


A strong engineering base exists in Tamil Nadu, mainly concentrated in areas such as Chennai, Coimbatore and Salem. In total, the exports of engineering products from Tamil Nadu are valued at US $320 million.

This strong engineering base consists of a network of nearly 3,000 units employing a skilled workforce of over 0.25 million, making high quality inputs such as castings and forgings and a wide variety of ancillary products.

Key Players within this industry in Tamil Nadu are Amalgamations Group, BHEL, Caterpillar, CPCL, LMW, Murugappa Group, Saint Gobain, Sanmar and the TVS group.

Information Technology

The State of Tamil Nadu is now a hot spot for investments in IT services and ITES as it possesses key resources of skilled and educated manpower, high standard of educational institutions, good infrastructure and an effective cost of operation. The ITES sector holds immense scope as it provides employment to technical and non-technical graduates.

A large number of successful IT companies were founded and still hold a high presence within Tamil Nadu. CTS founded in 1994 in Chennai, employs over 40,000 and has Global Delivery Centres across Asia, Europe and North America.


The state has 70 per cent of the total installed capacity of hide and skin. Leather and leather-based industries have witnessed phenomenal growth over the past years. The State Government has set up industrial estates and common effluent treatment plants. This has been done in the wake of providing all possible capital subsidies and infrastructure support by setting up.


The state has a good reserve of mineral resources. In the fiscal year 2006, the state witnessed phenomenal growth in the mineral products and its net sales grew by 28 per cent. It is the chief producer of lignite, limestone, magnesite, mica, quartz, salt, felspar, iron ore, bauxite and gypsum. The existence of lignite in the Neyveli area led to the establishment of Neyveli Lignite Corporation, which plays an important role in the power sector.


Chennai is known for woven garments and textile industry having near about 2,400 registered exporters. Tiruppur, known as the knitting city, has about 3,000 exporters and exports about $1.7 billion worth of T-shirts every year, and has about 25 per cent market share in the European Union in the T-shirts segment. Tamil Nadu has a big cluster of cotton textiles contributing almost 39 percent to the country's total production. The state's total volume of exports on a yearly basis is about $3 billion. Tamil Nadu houses over 59 per cent of the total spinning mills of the country. There are 1,734 large, medium and small spinning mills, including 18 cooperative spinning mills, eight National Textile Corporation mills and 26 composite mills. Tamil Nadu is the largest producer of cotton yarn and accounts for 41 per cent of India's production

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Key Players


The Amalgamations Group is one of the largest light engineering conglomerates in India consisting of 37 companies and 27 manufacturing plants. Its total strength of employees is over 14,000. The group is mainly engaged in the manufacture of diesel engines, agricultural tractors, auto components, batteries, cutting tools and paints. Its subsidiaries that have made their presence felt in Tamil Nadu comprise of TAFE, Higginbothams Pvt Ltd, India Pistons Ltd and Amco Batteries Ltd.

Ashok Leyland

Ashok Leyland, flagship of the Hinduja Group was set up in the year 1948 and is vigorously involved in the production of Leyland commercial; vehicles. In the fiscal year 2007-08, it had a turnover of US$ 1.9 billion. It is India's largest exporter of medium and heavy duty trucks. It is the first automobile company in India to achieve the ISO 9002 certification in 1993. The company's main plant is located at Ennore, near Chennai. Some time back, it announced that it will soon be taking over the Avia Truck Business Unit in Czech Republic enabling it to set its foothold in the highly competitive European truck market.

Bharat Heavy Electricals Ltd (BHEL)

Bharat Heavy Electricals Ltd. has made a special position for itself in the energy related infrastructure sector and has emerged as the largest engineering and manufacturing enterprise in India. Set up in late 1950s, its core areas of functioning are to produce and distribute electronic, electrical, mechanical and nuclear power equipment. It has a well developed infrastructure consisting of 14 manufacturing divisions, four Power Sector regional centres, over 100 project sites, eight service centres and 18 regional offices. BHEL offers a vast array of products and services for various sectors such as power, transmission, industry, transportation, oil & gas, telecommunications, non-conventional energy systems etc. One of the foremost manufacturing facilities of BHEL is the Tiruchirappalli (also known as Trichy/Tiruchi) Complex. It comprises a high-pressure boiler plant, seamless steel tube plant and boiler auxiliaries plant.


Caltex commenced operations in the country in 1936 through a joint venture between Chevron Corporation and Texaco Inc. The company's manufacturing and refining operations are through its LPG bottling plants at Chennai and Madurai, its import terminal with refrigerated link at Tuticorin and a 51 per cent stake in Caltex Spic India Ltd.

Caterpillar India Pvt Ltd (CIPL)

Caterpillar India Pvt. Ltd., headquartered at Illinois, USA, is a wholly owned subsidiary of Caterpillar Inc. it is engaged in the production of a range of earthmoving products including dumpers, front-end loaders, backhoe loaders, crawler tractors and hydraulic excavators. One of its manufacturing units is at Melnallathur, Thiruvallur district. It is a global manufacturer of construction and mining equipment, diesel & natural gas engines and industrial gas turbines. It was established after the acquisition of the Earthmoving Equipment Division of Hindustan Motors in 2001, involving the cost of US$ 71 million.

Chennai Petroleum Corporation Ltd (CPCL)

Chennai Petroleum Corporation Ltd, widely known as Madras Refineries Ltd (MRL) is involved in the manufacturing and marketing of lubricants, fuel products, and additives. CPCL is one of the largest and most integrated refineries based in south India. Its products include propylene, superior kerosene, butylenes, naphtha, paraffin wax and sulphur. With staff strength of about 1,670, CPCL operates refineries at Manali and Cauvery Basin. CPCL was honoured with the Green Tech Environment Excellence Award in 2002-03 for Environment Management at the Manali refinery.

EI DuPont India (EIDI)

EI DuPont India is a subsidiary of EI DuPont de Nemours and Company, USA. It is engaged in formulation and trading of crop protection products, engineering polymers, specialty fibres, specialty chemicals and polymers. The company started its operations in 1994 with an investment of US$ 80 million at Madurai.

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Ford Motor Company India

Ford Motor Company India was established with an investment of US$ 351.1 million under single window policy at Maraimalai Nagar, near Chennai in 1995. It has the capacity to manufacture almost 100,000 vehicles per year. The company is presently engaged in the manufacturing of three models with a number of variants and is one of the chief players in the Indian automotive industry. Ford Endeavour captured over 40 per cent of the emerging SUV market within six months of its launch. The company aims to export its vehicles from the Chennai plant to various destinations and in this endeavour, it has the support of the state government in terms of incentives. In the mid size car segment, Ford Ikon is India's largest exported car.

Madras Cements

Madras Cements, the flagship of the Ramco Group, is one of the key players who have made their presence felt all over South India. In 2007, it had an installation capacity of 5.99 mtpa occupying a market share of 11 percent. It has four manufacturing facilities, out of which 2 are in Tamil Nadu itself at R.R Nagar and Alathiyur.

Hyundai Motor India Ltd

Hyundai Motor India Ltd is a subsidiary of Hyundai Motor Company, South Korea and was established at Irrunattukottia, near Chennai, in 1997 with an initial investment of US$ 614 million. The plant presently is the largest manufacturing facility of Hyundai Motor Company outside Korea. Hyundai is the second largest and the fastest growing car manufacturer in the country. Hyundai presently markets over 18 variants of passenger cars across four models. The company emerged as the second largest exporter of passenger cars from the country. The company intends to shift its manufacturing base to this plant. Hyundai is ISO 14001 certified and recorded sales of over 500,000 units in a period of five years.

Lakshmi Machine Works (LMW)

Lakshmi Machine Works is a leading textile machinery manufacturer in India and is one of the few companies to produce the complete range of spinning machinery. Established way back in the year 1962, it caters to almost 60 percent of the domestic market. Today, it is one of the prime exporters of textile machinery. Having its base in Coimbatore, it has also entered into the segment of CNG machine tools and today, LKW is a brand leader in manufacturing customised products.

Madura Coats Ltd (MCL)

Madura Coats Ltd (MCL), a subsidiary of Coats Viyella Plc, UK is a market leader in sewing and embroidery thread with 50 per cent market share in the organised sector. Some of its reputed clients are Clairborne, Lee, Levis, Gap, Nike, Adidas, Tommy Hilfiger, among others. It operates through three business units: Coats India, Madura Textiles and Intrad. MCL is engaged in the sourcing of textile products from the domestic hand loom and small scale industries for export markets.

Mitsubishi Motors

In India, it is working in collaboration with Hindustan Motors. Its one of the most sophisticated manufacturing unit having all the state of art facilities has been set up at Tiruvallur near Chennai and for establishing it, the company had borne the cost of US$ 71 million. Its main areas of functioning are the body (weld) shop, paint shop, assembly shop and quality line.

Matsushita Electric

Matsushita Electric is Japan's leading consumer electronic company with brands such as Panasonic and National. The company has two of its production plants in Chennai, Indo Matsushita Carbon Company Ltd which manufactures carbon rod for dry battery and Indo Matsushita Appliances Company Ltd (IMACO) which manufactures products such as rice cooker and mixer grinder. Both plants obtained ISO 14001 certification in 1998. The company has invested US$ 12 million approximately, under single window policy of the Government to expand its operations.

Muruguppa Group

Muruguppa Group is a US two billion conglomerate headquartered in Chennai. It deals in varied areas which include engineering, fertilizers, abrasives, sanitary ware, finance, bio-products and plantations. It has almost 40 manufacturing units spread across 12 states in India . Muruguppa Group is one of the oldest business houses in India. Some of its subsidiaries include Carborundum Universal Ltd, Cholamandalam Investment & Finance Co Ltd, Coromandel Fertilisers Ltd, EID Parry (India) Ltd, Godavari Fertilisers & Chemicals Ltd, Parry Agro Industries Ltd and Tube Investment of India Ltd. It is a leader in manufacturing ceramic sanitary products and also it has been the first one to enter into the Indian bicycle industry and in developing neem-based applications.

Neyveli Lignite Corporation (NLC)

Neyveli Lignite Corporation, a public sector enterprise, was established in 1956.The company is involved in the production of lignite, urea and the generation of power. It has three opencast mines and three pithead thermal power generating stations. NLC serves as an important source of energy for state electricity boards in the southern states. Power generation accounts for 90 per cent of the company's revenues.

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Orchid Chemicals and Pharmaceuticals Ltd

Orchid Chemicals and Pharmaceuticals Ltd specialises in the manufacture of bulk cephalosporin antibiotics. The company is the largest producer in the country and has also established itself as a leader in its production in the global market.

The company has a bulk drug facility at Alathur, which has a manufacturing capacity of over 500 tonnes of oral and sterile cephalosporins. It has dedicated plants for most of its products. It is setting up a US$ 10.3 million formulations facility at Irungattukottai.

Premier Instruments & Controls Ltd (Pricol)

Premier Instruments & Controls Ltd was established in 1974 at Coimbatore and commenced manufacturing operations in 1975 in the precision engineering field of automotive instruments. At present, it is a leader with 53 per cent share in the automotive instruments market. In 1997, exports accounted for 12 per cent of the company's turnover with exports to USA, Canada, Mexico, South America, Europe, Turkey, Egypt, the Middle East, Asia, Australia and New Zealand. Pricol is certified ISO 9001 since 1993 and QS 9000 since 2001. It has initiated Total Quality Management (TQM), Total Productive Manufacturing (TPM), Supply Chain Management (SCM), Enterprise Resource Planning (SAP R3 ERP) and Collaborative Product Commerce (CPC -Windchill).

Rane TRW

Rane TRW, the flagship of Rane Group has its manufacturing facility at Alwarpet. It is engaged in the manufacture of steering systems and seat belt. Both divisions have joint venture partnership with TRW automotive JV LLC, USA. For its outstanding performance no the industrial front, it succeeded in winning the Deming Prize in 2005.

Saint-Gobain Glass India

Saint-Gobain Glass India is a subsidiary of Compagnie de Saint-Gobain, France and is the second largest producer of laminated and toughened glass. With an initial investment of US$ 108.4 million, the company started operations at Sriperumbadur, near Chennai, in 2000. Glass accounted for the majority (49 per cent) of sales, followed by abrasives (24 per cent), ceramics and plastics (15 per cent) and reinforcements accounting for the rest.


Polaris is India's one of the leading solutions and service provider actively involved in the banking, financial services and insurance sectors. Headquartered in Chennai, the company is widely appreciated for having made it possible to achieve highest Compounded Annual Growth Rate (CAGR) in the IT sector. It is also credited for being world's first CMMi (Capability Maturity Model Integrated) Level 5 Certified Company.

Scope International

Scope International is a wholly owned subsidiary of Standard Chartered Bank, UK having its base in Chennai. It has grown over 7,000 employees servicing 70 countries in the Standard Chartered Group. Despite being a relatively late entrant in the BPO business, it has emerged as one of the top five back offices in the country for international companies. The company has adopted the Six Sigma quality methodology in the organisation to create a highly effective metrics driven performance culture.

TVS Group

TVS group was established way back in the year 1911. It is a leading supplier of automotive components and is also one of the most well known business conglomerates in India. Consisting of more than 29 companies, it operates in diverse areas such as automotive component manufacturing, automotive dealerships and electronics. It has a turnover of over US$ four billion and workforce of over 25,000. Some of its subsidiaries based in Tamil Nadu are TVS Motors, Brakes India, Lucas TVS Ltd, Sundram Fasteners and Wheels India.


Visteon is a long established company having more than 80 years of experience in accomplished integrated systems. It has been instrumental in automotive engineering. It commenced its business operations way back in 1999 under the single window clearance policy system. It began with two projects spread on a 50-acre facility at Maraimalai Nagar, near Chennai. It has a wide customer base and includes almost all the global vehicle manufacturers. The company has over 170 technical, manufacturing, sales and service facilities in 26 countries. In the year 2006, its revenues from sales touched $11.4 billion in 2006.

World Bank

The World Bank commenced its BPO operations at Chennai in 2001 with an initial workforce of 80. At present, its employee strength stands at 180 and aims to expand its operations from basic processing to value-added work. The size of the commercial bonds portfolio is estimated at US$ 100 billion approximately. World Bank plans to outsource IT work worth US$ 10 million to its Chennai centre through its Indian partners, Satyam Computers, HCL Technologies and MegaSoft.


Xansa is a well known name in the Indian market that has been performing well on the industrial front. It was established under the single window policy after making an initial investment worth US$ 47 million. Its business services include business and technology consulting, IT implementation, IT outsourcing and BPO. Its campus at Chennai is spread over an area of 27 acres and it can capacitate as much as 6,000 employees.


Export Profile

Tamil Nadu has performed well in the thrust industries recording a healthy-growth rate in exports. Exports from agro-based industries and software sector have shown a CAGR of 60 per cent approximately.

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More Information on Tamil Nadu

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