Thank you for subscribing to India Rising. Our community continues to grow and great to have you with us!

This is our very first India Rising Perspective! I’m not only super excited to share this series with you, but thankful for the contribution by our authors from Guidance Tamil Nadu.

Learned something? Help someone else and share India Rising with your friends, family and co-workers. Let’s grow our community together and thank you for supporting the Indo-European partnership.

Got feedback? Just hit reply, I’d love to hear from you!

India's story of becoming the world's 3rd largest economy isn't one single narrative. It's being written by its powerful, fast-moving states as well. Tamil Nadu embodies this ambition, targeting a $1 trillion economy by 2030. This requires a world-class strategy to attract global investment, build future-ready infrastructure, and foster deep innovation.

To understand this playbook, we want to understand it directly from the source. As our authors are from the state's official, UN-award-winning nodal agency, Guidance Tamil Nadu is the architect and driver of this mission.

In this series, Godson George Micheal Rai and Priyadarshini Samikumar will provide their playbook on several sectors from electronics to engineering, and why global giants should be looking closely at India and Tamil Nadu.

The authors of today’s issue of the India Rising Perspective - Inside the $1 Trillion Economy, are Ms Priyadarshini Samikumar, Associate Vice President (Exports) and Mr Godson George Micheal Rai, Manager (Investment Strategy, Business and Trade Intelligence).

Priyadarshini and Godson bring diverse corporate experience to their current roles at Guidance Tamil Nadu. Priyadarshini previously worked with Australia’s leading investment promotion agency, while Godson, with exceptional academics from University College London, has managed a $ 1.6 billion hedge fund portfolio. Both are now closely involved with Guidance Tamil Nadu, the state’s investment promotion agency that bridges government and industry to help businesses establish a strong presence in Tamil Nadu.

Enjoy the first issue of our series!

Part 1 of India Rising Perspective - Inside the $1 Trillion Economy
By Godson and Priyadarshini

Europe, and especially Germany, built its Industrie reputation on Präzision, engineering discipline and strong institutions. Over time, these Elemente formed the foundation of an economy recognised for its consistency and technical strength.

Tamil Nadu developed a parallel story. In Werkstätten, ports and industrial towns, the state built a culture of production that relied on Stabilität, technical skills and steady long-term planning. These factors shaped an environment where industries could take root and expand.

Today, the two trajectories show a clear point of resonance. Tamil Nadu is no longer described as a region catching up. It is emerging as a manufacturing centre that global value chains now factor into their decisions. The shift is most visible in electronics, where the state’s growing presence is reshaping its position in global industry.

The foundation of this journey traces back to India’s economic liberalisation in 1991. Tamil Nadu moved quickly in response. In 1992, the state set up “Guidance Tamil Nadu”, an investment and export promotion agency that became one of the first of its kind in the country. Its mandate focused on one objective, to position Tamil Nadu as a reliable industrial destination in Asia.

At the start of the 20th century, Tamil Nadu’s industrial base consisted mainly of textiles and engineering workshops. A gradual shift toward electronics was beginning, driven by global technological changes. The key transition began way back in the 1970s. Anticipating the rise of the electronics sector, the Tamil Nadu government started preparing for this shift. In 1977, it set up ELCOT (Electronics Corporation of Tamil Nadu), an agency created to support the growth of an electronics ecosystem. In its early years, ELCOT identified land for future technology projects, promoted initial electronics units and laid the administrative groundwork for a sector that was still in its infancy.

By the 2000s, as global supply chains shifted toward Asia, Tamil Nadu adjusted its strategy. ELCOT developed Special Economic Zones and dedicated IT and electronics parks, offering ready-to-use facilities for companies. This created an environment suited for the rapid expansion of electronics manufacturing and related services.

Today, the state hosts more than 100 global electronics companies, contributes significant production shares across multiple electronics categories in India and is developing its semiconductor strategy through the Tamil Nadu Semiconductor Mission 2030.

Tamil Nadu accounts for 30% of India’s electronics production, making it the second-largest contributor in the country. The state’s electronics exports have jumped nearly 9x in the last four years, rising from $1.66 Bn in FY21 to $14.65 Bn in FY25. Tamil Nadu is the country’s top exporter of electronics for FY25, representing 41% of India’s overall electronics exports.

Tamil Nadu has taken a leading position in India’s Electronics Component Manufacturing Scheme (ECMS). It became the first state to introduce a state-level ECMS, signalling a targeted effort to attract investment in the electronics supply chain. The initiative is expected to bring in about $ 3.6 billion in new investment and create roughly 60,000 jobs in the sector. In the first national round of ECMS approvals, Tamil Nadu secured five of the seven sanctioned projects. This represented about 77% of the total approved investment, amounting to roughly $515 Mn.

Tamil Nadu’s electronics sector is not driven by a single dominant city. It operates through a distributed industrial structure built across multiple regions, similar to the network-based model that supports Germany’s manufacturing economy. As Germany relies on specialised hubs across Bavaria, Baden-Württemberg, North Rhine-Westphalia and Saxony, Tamil Nadu’s electronics hubs are spread across Chennai, Coimbatore, Hosur, Trichy, Thoothukudi and Tirunelveli with each region contributing a specific capability to the value chain.

In Chennai, global technology firms such as Foxconn, Pegatron, Samsung, HP, Dell, Panasonic, Murata, Nokia, Flex, BYD, Mitsubishi, Visteon, Salcomp, Tessolve, Qualcomm, Microchip, Schneider, Rockwell and Advantest drive large-scale manufacturing, process discipline and advanced design work. The region functions much like Northern Germany’s electronics clusters, where volume manufacturing and innovation operate together.

In Coimbatore, industry reflects a strong engineering orientation. Companies including Schneider Electric, Eaton, Bosch, Elgi, Pricol, LMW, Mindox, VVDN and Yess-Tech support sectors rooted in mechanical engineering, automation and integrated production. The pattern aligns with Germany’s Mittelstand, where mid-sized firms play a central role in technical capability and steady product performance.

In Hosur and nearby districts, firms such as Tata Electronics, Exide, WEG, Ascent Circuits, Delta and HIQ shape a corridor focused on component manufacturing and power electronics. The region’s development resembles the industrial areas of Eastern Germany that have become competitive bases through renewed investment and high-tech manufacturing.

In Trichy, Thoothukudi and Tirunelveli, the landscape supports advanced components, renewable technologies and electronics assembly. Companies including Pulse Electronics, Yageo, Vikram Solar, Bosch and Tata Power contribute to a supply chain that emphasises process efficiency, export orientation and technology-led production. Jabil and Kaynes have been evaluating this cluster as a potential base for expanding their electronics manufacturing operations.

Together, these regional clusters form an integrated industrial network. Each area adds distinct capabilities while remaining part of a connected state-wide system. This distributed structure enables Tamil Nadu to expand production, maintain operational reliability and offer coordinated supply-chain solutions, positioning the state as one of India’s closest parallels to Germany’s diversified, network-driven industrial model.

Tamil Nadu is assembling a complete semiconductor value chain, with companies spread across materials, equipment, design, ATMP, and emerging technologies.

At the entry point of the chain, material suppliers such as MacDermid Alpha, Chettinad Morimura, Maruwa, and CUMI provide raw materials for making silicon wafers, chemicals, and packaging materials. These firms ensure the steady availability of inputs needed for chip manufacturing and component preparation.

The equipment and testing segment brings global players into the state. Applied Materials, Coherent, ASM Technologies, KLA, Anora, and Mindox Techno supply fabrication tools, measurement systems, and assembly equipment. Their operations form the backbone of fab-support functions.

Tamil Nadu has also become a base for several international design houses. Qualcomm, Microchip, MaxLinear, Tessolve, and iVP Semi run R&D and chip design centres that develop IP, carry out verification, and work closely with global semiconductor supply chains. While fabrication is outsourced, the design activity anchored in the state contributes to high-value engineering work.

Downstream, companies such as ADATA (yet to come, investment plans announced) handle assembly, testing, marking, and packaging. These ATMP units perform the final steps needed before chips move into production and distribution.

Startups are adding new layers to the ecosystem. Firms like e-con Systems, Mindgrove, Incore, Edveon, iVP Semi, and Enixs work on SoCs, imaging solutions, and embedded semiconductor technologies, signalling a rise in home-grown innovation.

Taken together, these companies show how Tamil Nadu has built a semiconductor ecosystem that stretches from raw materials to advanced design and testing. The state now plays a central role in India’s semiconductor ambitions by linking suppliers, equipment makers, design centres, ATMP units, and startups into one continuous value chain.

Tamil Nadu’s semiconductor roadmap sets out a plan to build an ecosystem that can support long-term innovation. The strategy begins with talent, the base of the semiconductor value chain.

The state aims to train more than 4,500 engineers and technicians by 2028 in chip design, fabrication, packaging and testing through national and international programs. A key institutional effort, a Centre of Excellence for Advanced Semiconductor Technologies, will be established near the Chennai IT Corridor with a $12 Mn seed grant. The centre will work on advanced chip design, packaging and emerging technologies. By prioritising workforce development, the state creates the foundation for its semiconductor plans.

With talent development underway, Tamil Nadu advances into higher-value segments of the semiconductor ecosystem, particularly design. The state produces 143,000 engineers each year and maintains more than 210,000 vocational and technical training seats, alongside a growing base of 100,000 specialists in cybersecurity, data science, and AI.

This talent pipeline feeds directly into advanced manufacturing and high-tech industries. The state is setting up Centres of Excellence through Special Purpose Vehicles that bring together government, industry and academic institutions. These SPVs will provide design, assembly, testing and fabrication services. To lower entry barriers, the state offers land at minimal cost, allows TIDCO (Tamil Nadu Industrial Development Corporation) to fund up to 40 % of project expenses and may take up to 20 % equity in establishing Centre of Excellence. The measures position Tamil Nadu as a destination for semiconductor design firms and startups.

Design alone does not sustain a semiconductor industry. Concepts must be converted into prototypes that can be tested and prepared for commercial use. Tamil Nadu addresses this through a Fab-Lite model spread across 40,000 square feet, supporting small-scale production, chip packaging, system-level testing, advanced test equipment, 3D printing and prototype development.

An InchFab-type facility allows early-stage companies to access certification and testing without the usual high costs of chip manufacturing. By lowering the barrier for physical production, the state shortens the path from design to market-ready products.

Tamil Nadu adds the final link in its semiconductor plan by supporting commercialisation. The state provides payroll subsidies, incentives for product development, reimbursement for prototyping and validation costs, assistance for IP protection and access to mentors and fabrication facilities. These measures reduce financial risk, shorten time-to-market and create conditions for scale-up.

Viewed together, the semiconductor mission operates as an integrated system rather than a set of isolated initiatives. Workforce training supports design, design feeds prototyping, prototyping drives equipment requirements, and equipment enables manufacturing. Commercialisation incentives close the loop. This framework positions Tamil Nadu to develop as a competitive hub for semiconductor innovation and production.

Tamil Nadu is not just a manufacturing base. It is a major electronics market in its own right. With over 70 million residents and high urbanisation (48%), demand for smartphones, appliances, EVs and automotive electronics continues to rise. Semiconductor capabilities feed directly into automotive, industrial automation, consumer electronics and renewable sectors.

High per capita income accelerates technology adoption across the state. Mobile and smartphone usage remains among the highest in India, supported by wide 4G access and expanding 5G coverage. As India’s top vehicle manufacturing base (35%), Tamil Nadu drives strong demand for chips, sensors and power electronics. Retail modernisation and full household electrification are increasing appliance purchases across cities and smaller towns. For electronics and semiconductor firms, Tamil Nadu offers what few locations combine: global export capacity and a large, ready market at home.

The European business community can view Tamil Nadu as a reliable manufacturing partner amid recent supply-chain disruptions. Reliance on a narrow set of supplier countries has produced persistent bottlenecks, with the global electronics chain strained by the pandemic, geopolitical tensions and component shortages. Europe’s successive shocks in semiconductors, PCBs and modules have pushed firms to acknowledge that their value chains are overly concentrated. The automotive and electronics sectors, in particular, were left exposed to risk through dependence on external suppliers.

The Nexperia episode underscored the peril. Disruption in Nexperia’s supply chain and consequent shortfall in chip supply to European carmakers demonstrated how failure at one node can ripple across an entire region. Tamil Nadu offers a direct counterweight. An electronics manufacturing ecosystem has been built around coordinated supply-chain linkages and shared logistics networks. Investors gain streamlined access to suppliers, transport hubs and policy support for electronics production.

For European companies seeking diversification and risk reduction, Tamil Nadu serves as a strategic base. Competitive operating costs, a trained technical workforce and immediate shipping connectivity enable firms to construct stable and scalable supply lines. With Europe still vulnerable to component shortages and transport delays, placing production and sourcing in Tamil Nadu would de-risk, reinforce continuity planning and improve long-term manufacturing security.

Tamil Nadu is emerging as a destination where Präzision meets scale and innovation finds its launchpad. Global leaders are choosing it for what it offers: skilled people, steady governance, and seamless delivery. It is no surprise that Tamil Nadu is increasingly auf dem Radar (“on the radar”) for the world’s most demanding industries.

Next in this series: A closer look at how global players are establishing their technology and innovation centers (Global Capability Centers / GCCs) in Tamil Nadu to design, build, and own the future of innovation.

Sources: ASI, Niryat, DGCIS, Guidance Tamil Nadu, Businessline, BBC

If you want to explore more on this topic or have questions, please reach out to the authors via LinkedIn:

Priyadarshini Samikumar, Godson George Micheal Rai

Disclaimer: Views expressed by authors are personal. Any use of the data or graphics require prior approval from Guidance Tamil Nadu.

Enjoyed this issue? Share India Rising with your network.

You can’t get enough or want to catch up on past editions? Follow the link!