A hat tip to Tamil Nadu’s industrial strength, reforms Premium

The Economic Survey of India (2025-26) gives significant recognition to Tamil Nadu’s performance across a range of development indicators

The Economic Survey of India (2025-26), while underscoring India’s strong macroeconomic fundamentals and its resilience amid geopolitical fragmentation and global economic turbulence, accords significant recognition to Tamil Nadu’s performance across a range of development indicators.

As India emerges as the fastest-growing large economy, Tamil Nadu stands out as the fastest-growing State economy, registering 11.19% real growth in 2024–25. As India’s second-largest State economy, Tamil Nadu is also a major contributor to national growth. This performance is driven primarily by the secondary sector, which grew by 13.43%. Within this, manufacturing has emerged as a key growth engine, recording 14.74% real growth — more than three times the all-India average of 4.5%. Tamil Nadu also leads every State in four-year average real manufacturing growth (2021-22 to 2024-25) at 9.38%, while its overall GSDP grew by 8.63%. Headline CPI inflation declined to 2.45% in 2025-26 (till December). The State’s merchandise exports have nearly doubled from $26.15 billion in 2020-21 to $52.07 billion in 2024-25, reflecting rising global competitiveness and industrial diversification.

The Survey makes multiple references that reinforce Tamil Nadu’s position as an investment-ready, industry-first State, highlight its strength in manufacturing employment, ecosystem-led cluster development, and also its enablement of reforms that support faster project execution and sustainable industrial growth. It also highlights achievements in urban development, skill development, higher education, agriculture and services output.

Building on its legacy in textiles and leather, Tamil Nadu has developed a diversified industrial ecosystem. The Survey cites the automobiles and auto components cluster and the electronics manufacturing ecosystem at Sriperumbudur as exemplary cases of effective industrial policy intervention. Tamil Nadu is among the few States where 85% of the cement industry is concentrated. It is also one of three States to receive final approval for financial assistance of ₹100 crore to establish a Medical Devices Park under the Scheme for Promotion of Medical Devices Parks.

According to the Survey, Tamil Nadu contributes 15% of India’s manufacturing employment — the highest among all States — surpassing Gujarat (13%), Maharashtra (13%), and Uttar Pradesh (8%). This leadership is attributed to the State’s higher concentration of large-scale manufacturing units with superior productivity, supported by infrastructure development, availability of skilled manpower and investor-friendly policies.

Under the Business Reforms Action Plan (BRAP) 2024, Tamil Nadu has enhanced ease of doing business through single-window clearances, digitised approvals and land reforms, while promoting solar parks, district-level decarbonisation plans and energy-efficiency programmes. These initiatives accelerate industrial projects while strengthening environmental compliance.