Regimes may come and go. But Tamil Nadu has always seen policy continuity on the industrial front. The nascent TVK government has set the ball rolling on the new industrial policy. Guidance Tamil Nadu, the state’s nodal agency for investment has been holding discussions with key staekholders. The industrial policy would be one of the key pillars for achieving the state’s vision of becoming a USD 1.5 trillion economy by 2036. Tamil Nadu is ranked third among larger states in the NITI Aayog Investment Friendliness Index (IFI) report with a score of 53.3, ranking in both the overall and the large-state category. Gujarat and Maharashtra top the list. The score is driven by the state’s strong performance in the infrastructure and business climate pillars. The state excels in export performance, with its 36 per cent export-to-GSDP ratio being higher than the category average. In FY 2025-26, Tamil Nadu recorded the highest export growth among India’s top 10 exporting-states, with exports reaching USD 59.31 billion from USD 52.17 billion last year a growth in share of India’s exports from 11.9 per cent to 13.4 per cent. Tamil Nadu, which is strong in electronics manufacturing, is also set to reap benefits from the centre’s recent announcement of Semicon 2.0 for the development of semiconductor design and manufacturing ecosystem, with a total budget outlay of Rs.1.27 lakh crore  and a Mobile Phone Manufacturing Scheme with outlay of Rs 62,500 crore. According to an official Union government statement, mobile manufacturing units in Hosur & Sriperumbudur belt in Tamil Nadu and Bangalore in Karnataka alone are providing quality employment to more than one lakh people driven by production-linked incentive schemes. Around 25 lakh jobs were created in electronics manufacturing of which 12 lakh are in mobile manufacturing. In these sectors, women constitute nearly 70 per cent of direct workforce.
The state had been a lager in terms of the start-up ecosystem but is gaining momentum in recent years and officially crossed the milestone of 15,000-Department for Promotion of Industry and Internal Trade-recognised start-ups. With many brownie points, the new government would do well to bring out an updated industrial policy which focuses on addressing the challenges in the current AI era and with stiff competition from other states. The Niti Aayog report has also flagged some areas which need improvement like financial health, flight connectivity from Chennai airport, water availability in certain parts and improving road infrastructure around Chennai port. The upcoming state budget, TVK government’s first, may also offer some hints.