Tamil Nadu failed to woo as many foreign direct investments (FDIs) as Gujarat or Maharashtra did in the pandemic year of 2020-21, says data released by the Union commerce ministry.
Tamil Nadu in total wooed foreign investments worth ₹17,208 crore ($2,323 million) while Gujarat at the top was able to get a total of ₹1.62 lakh crore ($21,890 million). Maharashtra is at second with ₹1.19 lakh crore ($16,170million) worth of investments while the same for Karnataka was ₹56,884 crore ($7,670million).
In percentage point terms, Tamil Nadu attracted 4.1 per cent of all FDI inflows (in US$) into the country while Gujarat wooed 30 per cent of the inflows, Maharashtra 28 per cent and Karnataka and Delhi 14 cent and 11 cent respectively.
Although the investments in Tamil Nadu have shown an increase from ₹7,230 crore in the last fiscal to ₹17,208 crore this year, the state still fell behind other industrial states. Sources said Tamil Nadu failed to garner more foreign investments compared to the top four states mostly because investors weren’t sure which party would win the assembly polls and were thus wary of pumping their money into the state.
Former chief minister Edappadi K Palaniswami claimed in December 2019 that 53 projects resulting from deals inked during the Global Investors Meet 2019 have commenced commercial production, while another 219 projects are under various stages of implementation.
“Post-GIM 2019, Tamil Nadu had attracted 63 projects, with an investment of ₹19,000 crore, which would create 83,300 jobs. These include investments from Japan, Germany, South Korea, the United States of America and the United Arab Emirates,” Palaniswami said.
Government officials say that the data might not be a correct reflection of the investments happening in the state. “Many companies head-quartered in places like the Delhi-NCR Region and Mumbai that are investing in Tamil Nadu, get recorded at the local regional office of RBI,” the official contended.
“The intense lockdown for nearly one quarter of the last financial year affected investments and coupled with that is the assembly elections. Since December, all political parties have gone on the election mode and many companies have decided to wait and watch for the elections to get over,” said the official.
In the financial year ending March 31, 2021, a total of ₹81,722 crore has been received as FDI inflows into the country. The year marked an increase of 10 per cent over the previous year’s FDI inflows as per the data.
Mauritius and Singapore were the main sources of foreign investments into the country. Nearly 50 per cent of all the FDI inflows were from these two countries with Mauritius topping with 28.01 per cent and followed by Singapore at 21.73 per cent. The US came a distant third with 8.23 per cent and Netherlands and Japan contributing nearly 7 per cent each.
Services sector cornered 16 per cent of the investments. Services include finances banking, insurance, business outsourcing, R&D, courier, technology testing and analysis. Computer software and hardware cornered 13 per cent of the investments.