TRB Raja, TN Industries Minister Image Source: BIJOY GHOSH
Welfare measures or ‘freebies’ are a key driver of Tamil Nadu’s outstanding economic growth and boost the local economy by pushing money back into the system, said state industries minister TRB Rajaa. In a recent RBI report, Tamil Nadu’s nominal gross domestic product (GSDP) growth is estimated at 16 per cent in FY25 (highest among all top states), the minister said business area that inclusive distribution growth is key. The state sources its investments not only from the US, but also from Germany, Britain, Japan and other countries, which makes us more resilient to geopolitical shocks, he added.
The minister discussed the emerging field of shipbuilding, GCCs, competition from other states and more.
Edited excerpts:
Doubtful GDP growth and highest among top states for Tennessee in FY25. Is it just manufacturing or something else driving growth?
Targeted welfare measures and not blanket measures lead to really good results. Mobility is everything and giving free mobility to half your population (through CM’s Free Bus Ride for Women program) is a huge boost. Nearly 1.5 million women earn ₹1,000 every month – all of them have contributed to GDP growth. So every single rupee spent on social measures goes back into the national treasury and the wheels of the economy keep turning. It takes decades of work until the results are available.
The manufacturing sector appears to have performed particularly well in FY25. What are the drivers other than electronics?
In Tamil Nadu, we are in a position where we can produce anything there is. Our capabilities are immense. The next focus is on research and development. We consistently focus on high-quality, high-value manufacturing facilities and workplaces. Our commitment to education has provided us with enormous human capital, and that is highly qualified talent. For this reason, we focus on emerging sectors in this pool.
We have seen successive shipbuilding investments in TN. What potential do you see?
For every job created by a shipbuilder, 7 secondary jobs are created. It is a sector with one of the largest multiplier effects. We have the second largest coastline in India and the blue economy needs to be developed on a large scale. And we haven’t played an incentive game with the shipbuilding MOUs, it’s more about the infrastructure and the talent pool. We gave companies a true picture and got them to all of these goals. They were happy with what they saw, the speed of governance and decision-making. For Thoothukudi in particular, this will be a complete transformation. As an anchor company, Vinfast helped us position the district.
What impact did the tariffs have on the export-heavy TN economy?
We are a very resilient state. Our bets and sectors are diverse. I think we can weather the storm. The textile sector is currently suffering a setback and we have asked the Union to step in and help. We hope they will do more to help. The seafood sector also needs help. The Union said that the UK’s free trade agreements would help, and we agree, but the US is such a big market that we simply cannot ignore them. Tamil Nadu’s investments also come from different regions and not just the US. Next I will also travel to Korea.
Will Tamil Nadu have a fab? Are you looking for one?
Our pitch for fabs was never about jobs, it was always about national security, because a fab on the northern borders is not a very smart move. This is also because we have the production ecosystem here that is needed for the fabs. We definitely want to continue to have a Fab and avoid the Union blockade. We are working on building a small training ecosystem factory to train our design talent. A fab coming to Tamil Nadu will have much higher productivity than any other state in India.
What about GCCs? Other southern states are ahead when it comes to the necessary social infrastructure.
I think as a state we are focusing more on the physical and mental well-being of employees. Tamil Nadu’s idea of leisure is slightly different. We have more good food, music, art and culture and relaxation. And lots of nature, trekking, forests and adventure tourism. These are all things we are working on to provide value to GCC employees. I think young people will need these special leisure opportunities to distract from the stress of work. Due to the lack of commercial space, we are also considering expanding the FSI. Certain parts of the city may get FSI relaxation. We put pressure on the industry department
Has there been strong competition from other states for major investments lately?
Tamil Nadu knows what it wants. We will be very selective about what kind of investments and jobs we support. Today we are able to choose our investors ourselves. We are not a desperate state, but a very selective one. We also have limited resources when it comes to land. We can’t just brag about incentives. When we sign MoUs, we convert. That’s why no other state comes even close to our conversion rate of 80 percent.
What about data center projects? We’re seeing a lot of them go to other states lately?
A few projects going to other states mean nothing. Tamil Nadu is the largest gateway in India with seven submarine cables landing in Chennai. There’s a new one coming down south too. We are looking for high-quality green data centers in certain locations to also balance energy and water requirements. Data centers also don’t offer you the number of workstations that other high-end investments bring.
Published on December 13, 2025