The foreign direct investment (FDI) in Tamil Nadu grew about 41.5% to ₹17,696 crore (about $2.4 billion) in April-December 2021 from ₹12,504 crore (about $1.7 billion) in the same period of 2020 (when the first wave of COVID-19 started).
Of this, 53% or ₹9,332 crore came in the October-December 2021, the third quarter of the financial year 2021-22.
According to data from the Department for Promotion of Industry and Internal Trade, under the Union Ministry of Commerce and Industry, Tamil Nadu’s share in the total FDI in the country increased to 5% from 4%. Tamil Nadu has the fifth highest share, after Maharashtra (26%), Karnataka (23%), Gujarat (21%) and Delhi (13%). In April-September 2021, the State attracted ₹8,364 crore.
Tamil Nadu’s growth came despite a fall in the overall FDI flow into India by 16% to ₹3,19,976 crore in April-December 2021, compared with the same period of 2020.
According to the data shared recently by Union Minister of State for Commerce and Industry Som Parkash in the Lok Sabha, Tamil Nadu attracted about $3.02 billion in foreign direct investment in the calendar year 2021.
FDI is a matter of commercial business decisions and FDI inflow depends on the availability of natural resources, market size, infrastructure, political and general investment climate as well as macro-economic stability and the investment decision of foreign investors. In the calendar year 2021, India’s FDI inflow decreased 15%, compared with the calendar year 2020, he said in a written reply.
Earlier this year, Pooja Kulkarni, MD and CEO of Guidance Tamil Nadu, the State’s nodal agency for investment promotion, told The Hindu that key sectors which attracted significant FDI were construction, financial services, manufacturing (auto, electronics, machinery), retail and information technology services.
She pointed out that Mumbai and Delhi had several corporate offices; as a result, FDI meant for other States like Tamil Nadu was accounted for in Mumbai and Delhi.
Ms. Kulkarni also said FDI investment in manufacturing was hit harder by the pandemic. This affected Tamil Nadu more than other States.
According to her, Guidance is taking initiatives, including setting up country-specific desks and attracting anchor clients across sectors, which in turn help in the development of upstream and downstream industry linkages.
Chief Minister M.K. Stalin told investors in the UAE that despite the pandemic, in the last 10 months alone, the State had signed 124 memoranda of understanding for investment of $8 billion, creating employment opportunities for nearly 2 lakh persons.
