Tamil Nadu’s industrial policy has been tweaked to dole out an impressive list of incentives for emerging sectors and new investment targets. While the state has reportedly netted a whopping Rs 1 lakh crore in investments in the last 12 months, the Tamil Nadu Industrial Policy 2021 projects a total of Rs 10 lakh crore in investments over the next five years.

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“The targets reflect our ambition, and our combined efforts will make it (target) reasonable,” said Neeraj Mittal, MD and CEO of Guidance Tamil Nadu, the agency entrusted with the responsibility of drawing up the state’s new industrial policy, of which Mittal is the chief architect.

“What we are trying to do is focus on sunrise sectors, and that includes renewable energy, electric vehicles, pharma, med-tech, technical textiles, food processing, defence and aerospace as sectors which have seen new investments come in,” he added.

Truly enough, the new policy allows “sunrise sectors” to avail of a slew of incentives and subsidies, including a land cost subsidy of up to 50 percent, 100 percent exemption on stamp duty, an intellectual property-creation incentive subject to a subsidy of 50 percent, an interest subvention scheme of 5 percent and an SGST-refund on capital goods.

The incentives seem to be working even if only for the moment. The last two months alone, have seen brands like Ola and Ather Energy set up electric-vehicle plants in Tamil Nadu’s Krishnagiri district, capitalizing on these incentives. While Ather will invest Rs 635 crore over five years here, Ola has already parted with Rs 2,400 crore to build the world’s largest e-scooter plant.

However, an impressive list of incentives wasn’t the only factor that guided these companies to Tamil Nadu. “We’re starting with 1.2 lakh square feet today; we can knock down that wall and expand to four lakh square feet in the next couple of years,” said Tarun Mehta, Co-Founder and CEO, Ather Energy, “So, scope for expansion, access to headquarters, access to great talent here — Hosur is a big industrial belt — is really good on all these fronts.”

“There’s a lot of trained manpower here, because there have been a lot of automotive factories here in Tamil Nadu,” added Ola Co-Founder and CEO, Bhavish Aggarwal, “So that was one of the key reasons that attracted us, here.”

As Tamil Nadu heads into a crucial assembly election, the incumbent AIADMK Government is banking on industrial development as one of its key poll planks. To this end, the state’s new and improved industrial policy could well be the government’s ace up its sleeve.

Aside from emerging sectors, the TN Industrial Policy 2021 also has incentives for companies setting up plants in tier-2 and tier-3 industrial towns. As a result of this, the likes of TVS Srichakra, Tata Electronics and Tata Coffee have begun drawing up plans to open factories in locations like Madurai, Krishnagiri and Theni.

(Edited by : Ajay Vaishnav)