Foxconn, Flextronics, Salcomp Show Interest In Investing In Tamil Nadu As State Goes All Out To Set Up Electronics Manufacturing Clusters

Some of the prominent electronics manufacturers such as Taiwan's Foxconn, US' Flextronics and Finland's Salcomp have evinced keen interest in investing in Tamil Nadu, which is developing new manufacturing clusters.

State Principal Secretary-Industries, N Muruganandam, told Swarajya that Tamil Nadu government has come up with an investment policy for companies, particularly in the electronics sector.

According to an official press release, Tamil Nadu made a strong case for international firms, especially in mobile and electronics manufacturing, to invest in the state during the 2 June “Invest India” webinar on electronics system design and manufacturing.

On 29 May, another Tamil Nadu government press release had said that state Chief Minister Edappadi K Palaniswami had decided to reach out to 13 global heads of prominent multinationals such as Apple Inc, Samsung, Amazon, and Hewlett and Packard.

Muruganandam said that the state government has adopted a vigorous approach to attract investments from multinational companies and it was offering various incentives based on the investments proposed.

“We have classified investments into categories such as A, B and C based on money ploughed in, like up to Rs 300 crore and up to Rs 500 crore for example,” the Industries Secretary said.

Again, these clusters will come up in various parts of the state, starting from the outskirts of Chennai city like Sriperumbudur to other parts like Coimbatore.

Invest India is working in tandem with state governments and Tamil Nadu is benefitting from this.

“Invest India is giving leads, besides Tamil Nadu’s Industrial Guidance and Export Promotion Bureau, on possible sources to tap for investment. This is a continuous process and we are trying to attract a good number of investors,” Muruganandam said.

During the webinar, Tamil Nadu showcased its diversified manufacturing base in the state, its vibrant ecosystem and quick clearances through a single-window system, while inviting industries to invest.

To Tamil Nadu’s advantage, Josh Foulger, Foxconn Managing Director, told the webinar that the state has been critical for the success of his firm’s project.

He said the state government was ‘proactive’ and the investment climate was ‘favourable’ in Tamil Nadu.

One of the crucial decisions taken by the state government, with regard to promoting cluster development, is that it upgrades infrastructure development in these clusters in collaboration with the industry, and the Municipal and Rural Development Department.

Besides, local bodies, Highways Department, Electricity Board and chambers of industries and commerce are also involved in the development.

Muruganandam said that the state was not offering any additional package, but only tailor-made its packages to suit the needs of investors as per the schemes that are already being implemented.

Also, incentives are decided on a case-to-case basis, taking into account how much employment the investment will generate, the principal secretary said.

Stating that the full impact of its efforts will be known only after two-three months, he said the state was waiting for international flights to resume from the country so that the prospective investors could come to Tamil Nadu and see the officials and assess the physical infrastructure on offer.

Muruganandam said the Centre was helping the states through Invest India, which is currently arranging webinars with investors in countries such as Japan and Taiwan.

“The Ministry of Electronics and Information Technology and the Department for Promotion and Industry were coordinating with Invest India to help states attract investors,” the principal secretary said.

Amidst this, the state government is sounding positive in attracting more investments after it settled a dispute with Nissan Motor Co. over unpaid dues and payments totalling Rs 5,000 crore.

The dispute arose after Nissan complained that the Tamil Nadu government did not pay incentives under an agreement it signed in 2008.

It even went in for an arbitration process.

Sources in the Tamil Nadu government said the dispute arose as no incentive was paid between 2012 and 2017 as per the agreement.

With the issue being settled, the arbitration process has been withdrawn.

Confirming the settlement of the dispute, Muruganandam said it was a positive development for Tamil Nadu as it showed the state as a ‘proactive’ one, out to settle such disputes amicably and quickly.

The Tamil Nadu government’s efforts to develop manufacturing clusters is in line with the Centre’s recent initiative to scale up electronics manufacturing rapidly.

Towards this end, it has come up with three new schemes — production-linked incentive, promotion of manufacturing of electronic components and semiconductors and modified electronics manufacturing clusters — entailing an incentive outgo of Rs 50,000 crore.

On its own, the Tamil Nadu government signed 17 memoranda of understandings (MoUs) involving investments to the tune of Rs 15,128 crore with a potential to generate over 47,000 jobs.

Companies that signed the MoUs include Daimler India and Salcomp besides, those from Japan, Korea, the US, Germany, Taiwan, China, France, Australia, England and the Netherlands.