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This week's edition takes a look at European investments in Tamil Nadu, recent exchanges on EU and bilateral levels, and more must-know news.
Coming this week: our next guest article! Fellow Riser Vijay Kumar Vaddadi, a multi-faceted advisor, long-term supporter of the Indo-European partnership, and honoured with the Award of the Knight of the Order of Oranje-Nassau by the King of the Netherlands, will share with us “Why India Matters”.
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Rise of the Week: European Investments in Tamil Nadu
Tamil Nadu, India's southern powerhouse, has emerged as an important destination for European businesses seeking to establish or expand their Indian operations. With a growth rate of 9.69% for 2024-2025, the highest among all Indian states and Tamil Nadu's strongest performance in a decade, the state continues to attract significant international investment.
Infographic partially generated with ChatGPT (2025)
The state’s economy is based on the following key sectors:
Automotive
Electronics
Renewable Energy
Textiles
With a strong manufacturing base contributing 11.9% to India’s GDP, the state is home to a large number of European businesses, particularly from France and Germany:
Country of Origin | Number of Companies | Key Sectors | Notable Companies |
|---|---|---|---|
France | 170+ | Automotive, Industrial Services, Food, IT, Energy, Construction Materials | Renault, Michelin, Capgemini, Lactalis, Schneider, Accor, Saint-Gobain |
Germany | 120+ | Automotive, IT, Manufacturing, Logistics, Finance, Chemicals | Daimler Trucks, BMW, Siemens, Bosch, BASF, Festo, ZF, Schaeffler |
Others | Not specified | IT, Chemicals, Textiles, Plastics, Circular Economy | Nokia (Finland), SMEs such as Roca or Urbaser (both Spain) |
This growth aligns with India's broader manufacturing expansion and sectoral investments (covered in issues 6, 9, and 10). Notably, European companies entering or expanding in India are increasingly choosing Tamil Nadu as their gateway:
German automotive supplier ZF just inaugurated a new site in Coimbatore, ZF’s 19th site in India.
Festo, a German “Hidden Champion” (leader in its sector, family owned businesses) in automation and pneumatic technology, just inaugurated a new production site in Hosur.
German motion technology company Schaeffler inaugurated a new production site in Shoolagiri, Tamil Nadu (see India Rising issue 11).
The German company ebm-papst, the world’s leading manufacturer of fans and motors, recently announced its third factory in Chennai (see India Rising issue 6).
Nokia committed to establish one of its largest R&D centres and tech labs in Chennai.
Bonfiglioli, an Italian manufacturer of gearboxes, drive systems, and other products for the renewable energy, industrial and mobility sectors, plans to start operations at a new site in Cheyyar this year.
Industrial ecosystems have developed around Chennai, and Coimbatore, with Chennai being called the “Detroit of Asia” due to the high concentration of automotive companies.
A sign of the strongly established industry are major milestones that two German companies recently reached for their operations:
Daimler India Commercial Vehicles recently delivered its 200,000th BharatBenz truck, marking 13 years since the brand's establishment. The company operates production, R&D, and testing facilities across 160 hectares in Chennai, manufacturing BharatBenz, Mercedes-Benz Trucks, Freightliner, and FUSO vehicles for over 70 global markets.
In partnership with Force Motors, automotive leader BMW just finished its 100,000th engine at its plant in Chennai, which was established in 2015.
While this is only a sample of companies successfully active in Tamil Nadu, it demonstrates the market attractiveness for European companies. With Tamil Nadu targeting an ambitious one trillion dollar economy by 2030, the state appears well-positioned to capitalise on India's continued growth through its established industrial ecosystem and proven track record of supporting international businesses.
Sources: The Hindu, Business Standard, RPrealtyplus, Wikimedia, Autocarpro, DTNext, ETV Bharat
What Else is Rising?
The Indo-European Diplomatic and Economic Exchanges Continue
High-level diplomatic exchanges between India and European partners continued over the past fortnight, spanning both EU-level discussions and bilateral engagements with France, Belgium, Sweden, and Italy.
External affairs minister Jaishankar met with France’s foreign minister Jean Noel Barrot, covering a broad range of bilateral priorities. This complemented Union Commerce and Industry Minister Piyush Goyal’s participation at the CEO Forum in Paris, while the La French Tech India Summit 2025 in Bengaluru showcased the growing collaboration in Tech. All events highlight the momentum of the Indo-French exchange and set a positive foundation for the India-France Year of Innovation in 2026.
Earlier in the week, Jaishankar engaged with European Commission President Ursula von der Leyen as well as EU foreign policy chief and Vice President of the European Commission Kaja Kallas in Brussels for the inaugural strategic dialogue between both regions, a milestone in the Indo-European cooperation.
As political democracies, market economies and pluralistic societies, India and the EU share many convergences in an increasingly multipolar world.
While defence and artificial intelligence dominated the agenda, Jaishankar also highlighted the good progress on the India-EU Free Trade Agreement (FTA) during his speech at the German Marshall Fund Forum. Both sides anticipate concluding the FTA negotiations by the end of 2025.
Minister Goyal's European tour preceded Jaishankar's diplomatic rounds, featuring productive meetings with government officials and business leaders in Italy and Sweden as well to explore investment opportunities and strengthen economic ties. These discussions generated substantial commitments, according to The Economic Times and Business World:
Carraro Group (Italian automotive supplier): EUR 350 Million investment
UFI Filters (Italian leader in thermal management): doubling existing investment in India
Swedish companies in the automation, renewable energy, food systems, or advanced materials industry: multiple large-scale investment pledges
The continuation of high-level meetings confirm the focus of India’s leadership on Europe. Already the largest trade partner in goods, Europe recognises India’s strong fundamental growth, and the upcoming India-EU FTA positions the economy well for continued expansion. Opportunities that European companies are actively preparing to capitalise upon.
Sources: Upstox, MSN, The Tribune, The Economic Times, Business World
Quick Risers
Hyundai Motors’ plant in Chennai is about to become the company’s largest export hub outside of South Korea. (Source: Business Standard)
US tech company Apple leased space for its fourth store in India. The over 12,000 sqft large store will be located in Mumbai. (Source: The Hindustan Times)
The British semiconductor company ARM plans to open a second office in Bengaluru. (Source: The Economic Times)
Due to growing demand, the global logistics provider UPS will double freight routes between India and Germany. (Source: Maritime Gateway)
Spotlight: Guest Article by Vijay Kumar Vaddadi
Next guest article incoming: "Why India Matters" by Vijay Kumar Vaddadi.
Image: Vijay Kumar Vaddadi (2025)
Vijay is a multi-faceted advisor (i.e. for the Honorary Consul of the Netherlands in Tamil Nadu), and a long-term supporter of the Indo-European partnership, for which he was honoured with the Award of the Knight of the Order of Oranje-Nassau by the King of the Netherlands in 2016 on King’s Day.
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Curiosity Corner
Your random facts and stories about India and the Indo-European friendship.
One of the oldest languages in the world: Tamil!
Spoken by 78 million people and the official language in Sri Lanka and Singapore, Tamil is one of the oldest languages in the world. It is the only ancient language that has survived to the modern world. Part of the Dravidian family, which comprises of some native southern and eastern Indian languages, Tamil is the most widely spoken language in the state of Tamil Nadu and is also one of the official languages of India. Inscriptions dating back to the 3rd century B.C. have been found in Tamil.
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