GIM 2019: Corporates reaffirm their faith in Tamil Nadu
More than the quantum of investment, one clear outcome of Global Investors Meet 2019 held in Chennai last month is that existing investors have re-affirmed their faith in the State and its investment climate. As much as 90 per cent of the investment proposed through MoUs during the meet are from companies that already have a presence in the State.
The second edition of GIM saw 304 MoUs aggregating investments totalling over ₹3 lakh crore. Major companies, including Chennai Petroleum (CPCL), Hinduja Group, Royal Enfield, Adani Group, Wheels India, TVS Logistics, Foxconn and Hyundai, have committed large investments in the State. CPCL will invest ₹27,460 crore; Adani group ₹12,000 crore; and Hyundai ₹7,000 crore. Sector-wise, manufacturing saw the highest commitment of ₹1.55 lakh crore followed by housing at ₹49,980 crore, energy at ₹48,199 crore.
“Over 90 per cent of the investment was from existing investors,” said V Arun Roy, Additional Secretary, Government of Tamil Nadu & Special Officer, GIM 2019. He also added that repeat investment by existing investor is real recognition for the State. “Saint Gobain is doing its fourth expansion and Hyundai its third,” he told BusinessLine.
The focus on existing investors was a conscious strategy. Over 90 per cent of the investments was from such investors A conscious strategy
Focus on existing investors was a conscious strategy that the government followed this time.
“Many other States had started selling themselves well and Tamil Nadu, which had inherent advantages, has now come back at last to prevent existing investors from going away. It is only a matter of time before this leads to new investors making more investments in Tamil Nadu,” R Dinesh, Managing Director, TVS Logistics, and Chairman of CII Southern Region, said.
He said that existing companies committing more investments means that the MoUs will actually be implemented and jobs created than the promise of large investments by new companies, which may not fructify.
Unfazed by Sterlite
Roy also rubbished claims that the Sterlite issue (the shutting down of the Vedanta Ltd copper smelting unit) would hurt the investment sentiment in the State. “If Sterlite was an issue stopping new players from coming to the State, then it should equally scare away existing investors. With GST, the place of production does not matter for tax purposes. Companies like TVS, MRF, LMW and Chemplast could easily have moved to neighbouring States,” he said.
However, the State has attracted some new big names such as Groupe PSA, TPI Composites (USA), Luxshare of China and IKEA to name a few, Roy pointed out.