Analysis
Analysing Chief Minister MK Stalin’s Visit To Singapore And Japan To Drum Up Investments In Tamil Nadu
- While some MoUs have been signed with industries, the visit is more in the nature of preparing the ground for the state's upcoming Global Investor's Summit in January 2024.
Chief Minister MK Stalin addressing investors in Singapore
A delegation led by Chief Minister MK Stalin and Industries Minister TRB Rajaa is in Japan to attract investments to the state. They arrived in Japan after the completion of the Singapore leg of the visit.
In Singapore, 6 MoUs were signed between organisations like the Singapore Indian Chamber of Commerce and Industries (SICCI) and the Singapore University of Technology and Design and Tamil Nadu government bodies like the investment promotion agency Guidance, State Industries Promotion Corporation of Tamil Nadu Ltd (SIPCOT), Facilitating MSMEs of Tamil Nadu (FaMe TN) and Tamil Nadu Startup and Innovation Mission (TANSIM).
While one of the MoUs was regarding setting up an industry, i.e., an electronics parts manufacturing unit by Hi-P International Pvt Ltd, the others were qualitative in nature, i.e., focused on skill development, technology transfer, assistance in exports etc.
The delegation also sought investments and collaborations in the fin-tech, renewable energy, startups and food processing sectors.
The relationship with Japan is different as it is more into the manufacturing industry than services. It already has a significant presence in the Chennai-Kanchipuram-Sriperumbudur-Oragadam region.
This was highlighted by the delegation. Chief Minister Stalin had tweeted “...Companies from Japan have so far concentrated mainly on the manufacturing sector. I have invited them to diversify our engagement by investing in the sector of industrial infrastructure development and R&D…”
Till the time of writing, the delegation has signed an MoU with Daicel Safety Systems for expansion of its airbag inflator unit, visited a factory of Komatsu, an industrial equipment manufacturer and addressed a conference of investors organised jointly with Japan External Trade Organisation (JETRO) in Osaka.
He then took Japan's famed bullet train to cover the around 500 kilometre distance to Tokyo.
While it remains to be seen as to what agreements are signed during the remainder of the visit to Japan, there is no doubt that the state government is making a push to bring in as much foreign investment as possible.
At the same time, it is important to also look at this visit as a means of preparing the ground for the Global Investors Summit to be held in January 2024. The talks held during this visit might result in increased participation and deals being signed.
A close look at the choice of countries in this visit shows that Tamil Nadu is betting on countries with which it already enjoys a close relationship. While in the case of Singapore, it is due to the diaspora, with Japan it is because of the country’s already significant presence in the state.
That the state has the potential to do well is not in doubt given the way it has reportedly attracted Rs 30,000 crore in investments in the Electric Vehicle manufacturing space.
The state still has a long way to go in achieving its $1 trillion economy by 2030 dream and for that it will have to rope in new players, undertake reforms like allowing the 12 hours work policy (especially in the electronics manufacturing sector), corner more of the information technology industry, and tap into semiconductor manufacturing opportunities.
An important step in this direction was taken last month, by roping in the Boston Consulting Group (BCG) to prepare a comprehensive plan to achieve the target.
At the same time, an investment and industry friendly climate must be maintained by avoiding situations like the Sterlite protests.
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