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Electronics Manufacturing in Tamil Nadu, India

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Tamil Nadu is one of the 29 states of India. Chennai is its capital and largest city. This state lies in the southernmost part of the Indian subcontinent and is bordered by the union territory of Puducherry and the South Indian states of Kerala, Karnataka, and Andhra Pradesh. Tamil Nadu is the 11th largest Indian state by area and the 6th largest state by population. It was ranked as one of the top 7 developed states in India, especially with higher education: 27+ universities and 550+ engineering colleges, as well as a high literacy rate of 74%. This state has a high human development index (HDI) ranking among Indian states as of 2015. [1

The economy of Tamil Nadu is the 2nd largest state economy in India with a gross state domestic product (GSDP) of USD 215.81 billion from 2017-2018. It ranks as the 2nd most economically free state after Gujarat. Tamil Nadu has maintained an average economic growth of ~7%, well above the average for all of India. 35% of state’s contribution is from manufacturing. Tamil Nadu is a popular destination for foreign direct investments (FDI) and 3 times more FDI in 6 years than in previous 11 years. Last year, it received USD 3.47 billion in FDI. The state has dispersed their economic resources. It has the 2nd lowest cost of living city compared to Hyderabad: 65, Chennai: 68, Pune: 68, Delhi: 79, Bangalore: 80, Gurgaon: 82, and Mumbai: 89. [1]

Tamil Nadu has strong industrial, social, and physical developments. It has many existing and proposed electronics manufacturing infrastructures: over 220 000 registered micro, small, and medium enterprises (MSME). This state contains 100 industrial parks with developed plots that are offered to people wanting to start a new business. It also has the 3rd largest airport in India (4 international and 2 domestic), 4 large and 22 minor seaports, an extensive railway network, and roads to major cities and rural areas. The government recently created the Golden Quadrilateral project that links four major cities: Delhi, Mumbai, Chennai, and Kolkata. Tamil Nadu also provides reliable electricity generated by windmills. [2]

Electronics Manufacturing in Tamil Nadu

The state has high rankings for electronics manufacturing: computers and peripheral equipment accounted for 62% of its total electronics output. Tamil Nadu ranks 2nd in India for computer, electronics, and optical products manufacturing accounts for 16% of national production; it ranks 3rd in terms of electronic exports, which was worth USD 1.27 billion in 2018. This state offers a huge market for downstream industries, such as automotive, smartphones, computers, industrial, and electronics. There’s two sector-specific SEZs for electronics and hardware sector in the Kancheepuram district, an electronic/telecom hardware Hi-Tech SEZ in Sriperumbudur, and an electronic hardware Hi-Tech SEZ in Oragadam. [1]

Tamil Nadu’s top electronics industries include:

  • Automotive: India’s auto industry became the 4th largest manufacturer in the world with sales increasing 9.5% year-on-year to 4.02 million units in 2017. There’s strong automobile export growth expectations for the near future. The rate was 20.78% in April-November 2018 and it’s expected to grow at a CAGR of 3.05% until 2026. Several government initiatives and major automobile players in the Indian market are expected to make India a leader in the automotive market in the world by 2020. Chennai is called the “Detroit of India” and supports more than one-third of India’s automobile industry. [3]
  • Defense: Tamil Nadu’s share of defense electronics will be over USD 50 billion in 10 years. The Aerospace and Defense Policy was just created and the Tamil Nadu defense corridor was proposed. The overall future of defense electronics looks promising due to increased budget allocations, replacement of old equipment/modernization of forces, and procurement of state-of-the-art electronic equipment and technology. Platform electronics and data links have the highest demand under current and anticipated defense communication/network programs. [4]
  • Medical: India’s medical device market has steadily grown and witnessed a surge from USD 2.02 billion in 2009 to USD 3.9 billion in 2015 at a CAGR of 15.8%. India is in the top 20 global medical devices market and is the 4th largest medical devices market in Asia. There are currently 750-800 medical device manufacturers in India. The Indian medical devices market will grow to USD 50 billion by 2025. It’s presently valued at USD 5.2 billion and contributes 5% to the USD 96.7 billion Indian healthcare industry. Tamil Nadu already attracts 40% of country’s medical tourists with 200 foreign patients everyday. [5]
  • Phones: India is the 2nd largest mobile phone producer in the world. In 2014, there were a mere two mobile phone manufacturing units in India. Now, India is home to 123. This dramatic rise in production has come about as the result of a combined effort involving the government of India, the Indian Cellular Association (ICA), and the Fast Track Task Force (FTTF). By 2019, FTTF has set India the target of producing 500 million mobile phones locally, at an estimated value of around $46 billion, and export at least 120 million units, around $1.5 billion worth. FTTF has also set its sights on establishing a component manufacturing sector of $8 billion by 2019. [6]

Backed by 40 Years of Expertise

We contribute our 40 years of design and manufacturing expertise spanning multiple diverse markets, and we look forward to discussing how we can deliver world-class products for OEMs across the globe. We understand our home India market, familiar with its vast regulatory and selling environments. We foster growth opportunities within India through our strong technology incubation ecosystem. We also assist global OEMs seeking to enter the India market by leveraging the local supply chain and favorable operating environments for cost reductions.

Our flagship Chennai location opened in 2006 and lies within a Special Economic Zone (SEZ) for electronics manufacturing, offering economic incentives for imports and exports. This primary facility is within 90 minutes of the Chennai seaport and 20 minutes to the international airport, with additional road and rail, connectivity linking to the rest of India and beyond, as well as infrastructure advantages with faster import and export clearances. We also have labor force availability, both technical and manual, to rapidly scale to client demand.

To learn more about this topic, please contact us.

Rene VarroElectronics Manufacturing in Tamil Nadu, India

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