Tamil Nadu’s electronics and automotive sectors are expanding under China’s +1: Minister strategy

Tamil Nadu Information Technology Minister P. Thiaga Rajan praised the state’s growing electronics and automotive sectors, pointing to the successful implementation of the China +1 strategy, which has encouraged manufacturers to diversify production outside China.

“The electronics and automotive sectors are doing well in Tamil Nadu, while the leather and footwear industries have seen tremendous growth,” he said.

The China +1 strategy, aimed at reducing dependence on Chinese manufacturing by investing in other countries, has significantly benefited Tamil Nadu, positioning it as a major destination for electronics manufacturing.

Minister Rajan noted that shifting iPhone production from China to India is a compelling example of this trend. “If you look at the last 2-3 years, last year we moved from third or fourth in assembled electronic goods to number one,” he explained. “Most of this growth can be attributed to changes in China, especially as companies like Apple shift their operations to India.”

Rajan emphasized the need for better government support to ensure potential investors can easily navigate the opportunities available in the Indian market. “People should be able to easily explore the opportunities that the Indian market offers,” he said. “The government should support individuals and businesses to help them take advantage of these opportunities.”

While celebrating the success of the China +1 strategy, Rajan also addressed remaining challenges. He criticized India goods and services tax (GST) system, calling it a “poorly designed and ineffective system.” He stressed that “the GST Secretariat needs deep reforms”, advocating for as many as 20 improvements to make it more effective. “The reforms we need to carry out are to ensure the reliability, speed and transparency of processes,” he said, adding: “These are key elements influencing investment decisions.”

Rajan further noted that attracting significant investment, particularly in semiconductors and manufacturing, requires a comprehensive understanding of market opportunities. He advocated for better support systems for investors, including assistance in land acquisition and regulatory processes.

“We need to make it easier for people to access and realize our market and the potential opportunities available,” he said. “Continued support is essential until businesses stabilize.”