The ambitious project is expected to create over 5,000 employment opportunities–both direct and indirect–and drive significant skill-building in the local community.
Panapakkam has a population of around 11,536 as per 2011 census with residents primarily engaged in agriculture and weaving. The town is known as the production centre for power loom lungis, the sarong-like wrap favoured as everyday wear by multitudes of south Indian men.
The Dravidian Model
The hum of power loom units reverberates across Panapakkam, but it’s also grappling with dwindling wages in the textile sector.
Another reason why the residents now hope the advent of the Tata group will dramatically alter their fortunes.
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“Tata Motors setting up its plant in our town has given us much hope and filled us with a lot of optimism,” said R Srinivasan, 54, a textile manufacturer in Panapakkam. “We are waiting for it to come up eagerly because it gives our youngsters an opportunity to work at home rather than go to places like Chennai for jobs. Our only wish is that this area develops and the locals get a shot at working for a big company like the Tata group. We have already seen real estate prices go up and businesses like provision stores, food stalls and hotels doing much better than before.”And, this project is not a one-off.
Across Tamil Nadu there is a veritable tsunami of investment that is being driven into the state’s hinterlands. The southern state, long hailed as India’s Detroit because of its sprawling auto factories, has directed investments out of well-developed hubs like the Chennai-Sriperumbudur-Hosur belt into lesser-known districts.
This includes Vietnamese major VinFast’s Rs 16,000 crore project in Thoothukudi to make EVs and batteries. American contract manufacturer Jabil, too, is due to set up its Rs 2,000 crore electronics manufacturing services facility in Trichy.
Tata Power Solar’s Rs 4,300 crore investment in Tirunelveli is expected to make the region a key player in the renewable energy sector, specifically in solar power manufacturing.
These investments are expected to propel these lesser-known districts into manufacturing hubs, triggering more equitable industrial growth and also serving to decongest metro cities like Chennai.
“Tamil Nadu has been proactive in attracting anchor investments across the state, particularly in regions beyond the traditional industrial hubs,” Industries Minister TRB Rajaa told ET. “These anchor investments are pivotal in diversifying Tamil Nadu’s industrial landscape and spreading economic growth across the state.”
In his interaction with ET in August, Foxconn Chairman Young Liu had said that the company was looking to build industrial parks and townships “in Tamil Nadu (but) outside of Chennai” as Chief Minister MK Stalin had asked the company to actively look at expanding its footprint outside of Chennai.
“Distributed growth is a cornerstone of CM’s vision for Tamil Nadu, and a key pillar of the Dravidian Model of development,” Rajaa said.
Chennai is just one of the state’s ‘economic engines’, with Tamil Nadu boasting several others like Coimbatore, Trichy, Madurai, Thoothukudi, Salem, Tirunelveli, Thanjavur, Hosur and more.
“This balanced development allows us to offer investors a diverse range of options based on their sector-specific needs, whether it’s automotive, electronics, textiles or food processing,” according to the state’s industries minister.
“We have the talent and skills available in every corner of the state, and that is a key differentiator when we pitch to global investors,” he added.
Historian Arup K Chatterjee said big-name investments could have enduring sociological changes. While they are a reasonably recent phenomenon in the Indian economic and industrial landscape, he said, their cultural and demographic consequences will be longstanding.
“It is plausible to expect a changing demography in places where large companies set up as they will likely accommodate people from all across India, if not also the cream of India-origin talents from abroad,” he said. “Naturally, the impact of this will be felt on education and healthcare, which will trigger the need for better amenities. CSR initiatives, trustee-led organisations, insurers, and those with expertise in healthcare and education are probably surveying the milieu in and around these sites carefully to assess their emerging relevance in regions where anchor investments are slated to occur.”
Diversified growth
Thoothukudi, the location for Vinfast’s Rs 16,000 crore facility, is known as the “Pearl City” because of its history of pearl fishing in the coastal waters. It is also famous for salt production and shipping activities.
However, with the Vietnamese EV player setting up shop there, the region is set to witness an auto overhaul with several new suppliers and component makers coming in.
Taiwanese contract manufacturing giant Foxconn calls Sriperumbudur home but Hosur, too, continues to grow as a thriving electronics hub with Tata Electronics’ investment driving the region’s growth in precision components and advanced electronics manufacturing.
Now, with key Apple and Cisco supplier Jabil setting up a Rs 2,000 crore manufacturing facility in Trichy, the city known for its ancient temples and rock fort is all set for a face-lift. Traditionally known for its heavy industries, Jabil’s entry is expected to give the district–renowned for fabrication industry, gem cutting, korai mat weaving and readymade garments–a chance to diversify into electronics manufacturing.
“The presence of Jabil is already sparking interest from other companies keen to leverage the region’s growing capabilities in electronics manufacturing,” said Rajaa.
“We are in discussions with several potential investors, including electronics and semiconductor firms, although we are not at liberty to disclose names at this stage.”
About 300 kilometers from Trichy, Tirunelveli is seeing a huge shift with Tata Power Solar’s investment in the region. “The project will not only boost solar panel production but also foster a comprehensive ecosystem that includes component manufacturing, supply chain integration, and the development of a local vendor network, further strengthening Tamil Nadu’s leadership in the green energy sector,” Rajaa added.
