We Are Making Tamil Nadu The Best EV Investment Destination In Country: V. Vishnu

Tamil Nadu has emerged as one of the most favoured investment destinations for not only the domestic, but also the global E-mobility companies during recent years. The ride-hailing company Ola has come up with its largest EV two-wheeler manufacturing facility, while companies like Tata, Hyundai and Vinfast have planned to pour in Billions of dollars to develop manufacturing units in this southern State of India. What is there for the State to offer to these companies? How Tamil Nadu succeeded to lure investment of such a scale and magnitude? During his inaugural address at two-day India EV Expo and Conference on June 29-30, 2024 in Chennai, the MD & CEO of Guidance Tamil Nadu, Mr. Vishnu Venugopalan (IAS) who is at the forefront of attracting investments in the State unfolded the strategies. Here are the excerpts:

At the outset let me thank Entrepreneur India for consistently hosting this 2^nd edition in this beautiful city of Chennai. I don’t think there is more apt location to host the EV Conclave than this beautiful City.  Before I begin, let me just Introduce the organization I represent. I head the Guidance Tamil Nadu. Guidance is an Investment promotion agency for state of Tamil Nadu, it is in fact, one of India’s oldest investment promotion agency set up in 1992.

 What we do - we attract investment into the state of Tamil Nadu. Why was it started in 1992 - because till 1991 which is pre-liberalization era, we really never needed States to actively look for investment. By and large it was regulated by the central government and once the markets opened up, more and more States started attracting investments by their own post 1991. That is the significance of 1991 reforms.

What exactly do we look at - we look at three verticals of Investment. First vertical looks after those Companies looking to enter India for the first time. How do I pitch the state of Tamil Nadu as most prefered destination of the country - we had fair amount of success on that front during last two-three years. I am sure all of us have been following the news on Electronics and EV. Let me tell you in a span of two months two global OEMs (Original Equipment Manufacturers) have entered the state of Tamil Nadu. I don’t think anywhere in the world two greenfield projects would have been announced back to back by two OEMs. The first one is TATA Motors – where it is the first time that premium car will be manufactured in India – Jaguar & Land Rover is starting facility in Tamil Nadu which is the matter of pride for not just the state but for the whole country. The 2^nd is company from Vietnam - Vinfast. I will come to the significance on why these two global OEMs announcement of the investment is very very critical for state and the country little later.

The 2^nd vertical that the guidance looks at are those companies which are in India but not in Tamil Nadu currently which traditionally include large Indian corporate houses we are not had a fair bit of presences of those. The classic example is that Tamil Nadu never had a large presences of TATA group.

But in Last three years we have got three major arms of Tata Group expanding in the state of Tamil Nadu, TatA Power for solar photovoltaic manufacturing, TATA Electronics for apple I phone and masses plant coming up in Hosur area which is likely to be employ 40000 people and is one of the biggest electronics manufacturing plants coming up in the country, and the 3^rd is TATA Motors.

Investors Trusted..

The 3^rd and probably the most important category we look at are those companies which have trusted the State, trusted the government, trusted the  beautiful state of Tamil Nadu have been investing reinvesting continue to go  in the state of Tamil Nadu. I think there is a most import client many of you fall in that category and continue to have faith in the state and continue to invest. These are the things guidance Tamil Nadu looks at. First those companies which are not in India, second those which are in India but not in Tamil Nadu, and third those which are in Tamil Nadu and continue to have faith and grow. Definitely as far as the news value is concerned, the first one takes up lots of space in term of visibility and we have been doing extremely well on two particular sector which are automobile/EV and the electronics.

Now where does it leave us in the EV Front – Tamil Nadu government released the Tamil Nadu Electric Vehicle Policy in March 2023. Honourable Chief Minister in presence of several CEOs launched the Policy and in the policy we had put a target around Rs 50,000 Crore of likely investment that the Policy was set to attract and let me tell you that we have already crossed the target and we are at Rs 70,000 Crores plus and moving. Thanks for the global investors’ meet which many of you were a part of including the Stellantis, many others also. Hyundai signed a massive MOU of 20000 crore Indian Rupees immediately after the launch and another 5000 are closed during the global investment meet. Pretty much every global OEM continues to invest in EV and future technical innovations.

Historic Export Numbers...

Second big development is that Tamil Nadu is at the cusp of what I would say historic movement for the country. From a mere 1.6 billion USD worth of electronic exports in 2021, last financial year Tamil Nadu clocked 9.6 billion USD, unprecedented. Today, 30 percent of India’s electronics exports is of Tamil Nadu. We were at 4^th position in 2021 financial year. Today we are number one, leaps and bounds ahead of the other States, thanks to multiple factors, definitely the mobile phone market played a big role, the Apple ecosystem did play a big role, but also coupled to it is several other advancements in AI related, Data Centre related, whole lot of component manufacturing that Tamil Nadu is currently in the forefront of. Let me tell you that to set the tone for not just the State but for the whole country! Tamil Nadu released the advance electronics and semiconductor policy. While we do that, fine we have done electronics manufacturing - the low end supply chain part of it. But it’s time we move up the value chain, it’s time we show the world that advance manufacturing capabilities do exist in the country. Thanks to again a very very strong and robust automobile ecosystem.

so I think many of you are in the automobile ecosystem, I must thank you the reason why we have been able to do consistently well in the electronics and associated manufacturing sector and thanks to the strong work ethics and the high quality of talent available  here. The already existing ecosystem, the strong MSME sector the new Start-up system doing the State proud, number of start-ups being registered are skyrocketing every year. Some total of all of this is driving the overall investment in the State of Tamil Nadu in the EV sector.

The World Needs Tamil Nadu

Now let us just take a slight detour from Tamil Nadu and look at what is happening globally. We need to look at Tamil Nadu in global perspective. We are at around 280-300 billion USD GSDP and this the second largest economy in the country. We are the second largest after Maharashtra which is number one. But if you take out Mumbai then we will become number one. You should discount the Mumbai factor as it is financial capital of the country. So with second largest economy in the country, where does it leave us on global map? We will be among the 50 largest economies in the world if you look at in a global perspective in term of GSDP Value of it which means Tamil Nadu is closely integrated with the global value chain. And where does it leave us at EV fronts specifically? If you look at EVs, there are OEMs which we have been attracting well. Pretty much every brand you think of is present in Tamil Nadu in some way or the other. The second part are the EV component parts of it and the third is battery and the power part of it. But the fourth part which is particularly the most important of the State and I feel has been left out from overall EV discourse which I would like to throw some light upon is circularity and the sustainability part of it.

Let me tell you Tamil Nadu government yesterday on the floor of the Assembly. Our honourable industry Minister announced that Tamil Nadu will come out with India’s first circular economy investment policy. I don’t think any other state has come forward to it, particularly drive investments into the overall circularity and sustainability. Why do we need to do that? When we look at investment, when we look at large scale investment, there are three factors that attract investment into the state of Tamil Nadu what makes the State very appealing. Number one - availability of green power. We talk about source of energy being the most important thing, 50 percent of the installed capacity today comes from green sources, so that makes Tamil Nadu in forefront of the attracting investments. It pretty much takes the ESG (Environment, Social and Governance) check boxes of the every global company.

Women Empowerment At Forefront..

Second most important thing is - availability of highly skilled workforce and more importantly women workforce. Not so many of you know the fact that 42 percent of women working in factories across the country are from the state of Tamil Nadu. So, women in manufacturing is something which is unprecedented. I think that’s been our strength. Today we have phenomenon what is we call all-women factory yet again from a strong EV player Ola. All of you know that one of India’s largest EV two-wheeler manufacturer Ola has pretty much all-women factory being set up in the western part of the Tamil Nadu. There are other companies which are also following the suit of having shop floor being filled with women workers. This is probably one another ESG  tick box that attracts global companies to prefer the state of Tamil Nadu.

Third, we are at a very critical intersection of electronics, data sciences, sustainability - all at put together which means Tamil Nadu sets a perfect platform to look at future of connected vehicles, autonomous vehicles, entire system of innovation and technology and hard core research into the sector and we have nobody less than Mr. Ashok Jhunjhunwala who has been the inspiration for pretty much everybody in this part of the State as well as whole country. The IIT Madras Research Park is a big enabler when it comes to pitch the State of Tamil Nadu as preferred investment destination. Companies like Coherent – those who are in semiconductor industry would know that Coherent is one of the largest and most important in terms of value chain in semiconductor sector – Coherent decided to set up its first centre of excellence in India and also evaluating multiple locations including China, Malaysia & Vietnam. The company Cherry picked Chennai as a preferred destination simply for the fact that IIT MADRAS Research Park is here. And we have a try-party agreement with IIT MRP, Coherent and Guidance Tamil Nadu that we signed last year and thanks to Mr. Jhunjhunwala for that.

So data, Sustainability, EVs, automobiles - the whole lot of things are happening and thankfully the State has been able to leverage into that. When we talk about EV, there are two parts. One is the supply part which is into the manufacturing side. The second is actually absorption part. While we may not top the chart in terms of absorption of EV Vehicles, fair bit of activities have been taken up after several round of interaction with charging point operators and the connected place. Hopefully we will see a better absorption and adoption rate of EVs in the public fleet as well as in B2B context.

Developing Corridors..

Another critical aspect which Tamil Nadu has been looking at from supply side is that we are trying to spread our Investment outside Chennai. Chennai is not the only growth centre we are looking at. We are looking at the western cluster which is the Hosur belt which today is the global EV hotspot. We are looking at Trichy as an important EV destination. We are looking at the Thoothukudi which is at the southern part of Tamil Nadu as EV cluster. Thanks to Tata investment which is coming up in Ranipet which is midway between Kanchipuram and the vellore. We are sure that Bengaluru-Chennai Industrial Corridor will get further impetus. I am sure that will develop whole new Ecosystem thanks to another announcement by state government that a new airport is coming up at Hosur. This is going to be a complete new development corridor going connect from Chennai to Bengaluru. So all these put together, Let me tell you that its being good time for Tamil Nadu in terms of the overall EV story. In fact that the second consecutive EV Conference is being hosted here stands testimony to that we have more exciting news Line-up. This particular Event is just stepping stone into something much bigger. I can see whole stakeholder in the event. Wish you all the very best. Thank You.