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Saturday 4 July 2020

Tamil Nadu constitutes team to attract cos fleeing China

Tamil Nadu is already one of the best destinations in India for FDI, which is the primary message the team will convey to these companies

Tamil Nadu has set up a crack team of bureaucrats to see if companies fleeing China could be brought to the southern Indian state — that will carry the message to these global businessmen that it is one of the top destinations for foreign investment in the country.

The state’s chief secretary will head this committee. It will submit a report within a month.

The panel will include representatives of potential investors from countries like Japan and South Korea, which have already indicated they are moving their production units out of China. “Reports indicate that countries like the USA, South Korea, Japan, Taiwan and Singapore are likely to diversify by establishing supply chains originating in India. Tamil Nadu, which is already a favoured investment destination, is well placed to attract these investments and needs to take pro-active steps to attract them,” a government order stated.

Internationally, companies are evaluating their supply chains, with Japan allocating a portion of its stimulus package to help manufacturers with bases in China to move their units out.

The panel will work out an incentive package and facilitation process to draw investments, identifying sectors where the state can develop ecosystems. The panel will also identify measures to fast track clearances to promote the investments.

Prime Minister Narendra Modi had, in his interaction with chief ministers, urged all states to woo these companies looking to move their facilities out of China. BJP-ruled Uttar Pradesh and Gujarat are already in the race.

Why Tamil Nadu is a preferred FDI destination

Tamil Nadu had been wooing FDI before coronavirus struck. The state had taken a lot of measures to draw investments in the electric vehicle industry. These attractions included road tax waivers for consumers and sops for charger manufacturers. The state put out a comprehensive policy for e-vehicles.

Taiwanese phone maker Foxconn, which runs a contract for Apple among other phone brands such as Xiaomi, is another interesting feature in the industry of Tamil Nadu.

Foxconn was employing labour forces for its Sunguvarchathiram facility off Chennai before coronavirus derailed its plans. This company is one of the trusted investors in Tamil Nadu: top executives of Foxconn were present alongside Chief Minister Edappadi K Palaniswami during his meeting with investors in the US last year.

Car-making companies like Hyundai, Renault Nissan and Ford are located in Tamil Nadu too. Not just commercial vehicle makers like Daimler, luxury brands have arrived in the state for its labour as well. BMW’s plant in India plant is in the state.

Tamil Nadu highlight all these points before out-of-China investors, said an official privy to the development.

The state must overcome some challenges too

However, not everything is rosy about Tamil Nadu. The existing investors complain of a lack of clarity about the phased exit plan.

The first-ever area to register a COVID victim in Tamil Nadu was the Sriperumbudur-Oragadam belt in district Kanchipuram, the location of the state’s biggest factories.

Finally, the state is not sure factories will re-open on 4 May after the second phase of the lockdown ends.

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