News / Multinationals pledge major facility investment in India's Tamil Nadu

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The state government of India’s Tamil Nadu has signed investment pacts worth over $4.39bn with shippers such as Apple and Hyundai, as multinationals continue to diversify their global supply chains.  

Tamil Nadu is the third-largest contributor to India’s GDP, and is set to move up to second by next year after the recently announced developments.  

It is the country’s third-largest exporter and is home to Chennai Port, the second biggest container port.  

Sunday’s deals in Tamil Nadu include an agreement with JSW Energy to invest $1.4bn in renewable energy projects, Tata Electronics to invest $1.5bn for mobile phone assembly operations and Nike shoemaker Hong Fu being set to invest nearly $125m. 

Hyundai Motors, long established in the Chennai region, will invest $743m, in part for electric vehicle battery and car manufacturing, while, Pegatron, Apple’s Taiwan supplier, will invest $120m to expand production. 

Reuters reports that Apple is counting on India to be the next big driver of its growth, as it looks to diversify some production away from China. 

And the deals were followed today by the signing of a memorandum of understanding (MoU) between the Tamil Nadu government and Maersk Line, to “explore opportunities to invest in land development to create logistics hubs”.

The carrier will also “study customer needs for storage facilities and build modern, state-of-the-art warehousing facilities that would incorporate the latest warehouse management systems”, and it will also invest in “building a fleet of electric trucks that will ensure sustainable and environment-friendly distribution”. 

A Tamil Nadu official directly linked the Maersk MoU with the recent investment into the state’s manufacturing facilities. 

V Vishnu, MD and CEO of Guidance Tamil Nadu, said: “We are happy to collaborate with Maersk as a strategic logistics partner. To attract global investments into the state, the availability of effective logistics and supply chain solutions is key. 

“We believe this collaboration would bring the right global expertise, network and ambition to enable the growth of trade in the state. Guidance Tamil Nadu shall facilitate necessary support and bolster the existing conducive environment to implement best global practices for proposed investments,” he added. 

A Maersk spokesperson told The Loadstar: “We believe a lot of global manufacturers are looking at diversifying their sourcing locations to reduce their reliance on a single source. This provides an opportunity for several countries, including India, to play a big role in the sourcing strategies for such companies.  

“We have already seen some of the key multinationals move some parts of their production to India. In addition to that, the Indian government has laid a lot of focus on creating an ecosystem that is favourable for global manufacturing to turn towards India.” 

Maersk’s main verticals in Tamil Nadu are automotive, electronics, textiles, chemicals, footwear, pharma and renewables. It also runs a cold storage facility near Chennai Port. And said it hoped to also involve Maersk Air Cargo, as Tamil Nadu’s export needs grow. 

“Maersk already offers ocean and air transport out of Tamil Nadu. Air is becoming increasingly important, especially for sectors such as electronics and automobiles,” the spokesperson told The Loadstar. 

Other carriers have also been investing in the region and Tamil Nadu’s port capacity is receiving some serious capacity injections. While Chennai remains the main hub, Indian terminal operator Adani has also been building up container services at nearby ports Ennore and Kattapulli and, last month, MSC terminal subsidiary TIL bought a 49% stake in Ennore for around $30m.