Foreign Direct Investment inflows into Tamil Nadu declined by 8.5% in 2019-20

A senior State government official however said it had been a good year for investments for Tamil Nadu

Foreign direct investments into Tamil Nadu declined by 8.5% to ₹16,624.44 crore in the financial year (FY) 2019-20 from ₹18,164 crore in FY 2018-19, official data showed. However, a senior State government official said it was a good year for investments for Tamil Nadu, pointing to the number of ‘consent to operate’ issued.

According to provisional data released by the Department for Promotion of Industry and Internal Trade, Tamil Nadu had attracted an investment of ₹7230.44 crore for the October 2019 to March 2020 period and had accounted for 4.21% of the inflows into the country, the sixth-highest among States. For April-September 2019-20, Tamil Nadu saw foreign direct inflows of ₹9,394 crore.

Source: Department for Promotion of Industry and Internal Trade

At the beginning of the calendar year 2019, the State held the second edition of the Global Investors’ Meet (GIM), during which it signed Memorandum of Understanings with as many as 304 companies, securing investment pledges worth ₹3,00,431 crore.

In December 2019, Chief Minister Edappadi K. Palaniswami had said that 53 projects resulting from deals inked during GIM 2019 have commenced commercial production, while another 219 projects are under various stages of implementation.

He had also said that post-GIM 2019, Tamil Nadu had attracted 63 projects, with an investment of ₹19,000 crore, which would create 83,300 jobs. These include investments from Japan, Germany, South Korea, the United States of America and the United Arab Emirates.

A senior government official said the data might not be the correct reflection of the investments happening in the State. “For companies head-quartered in places like the Delhi-NCR Region and Mumbai that are investing in Tamil Nadu, it gets recorded at the local regional office of RBI,” he contended.

The official also pointed out that 2019-20 has been a good year for the State in terms of the number of ‘consent to operate’ issued. He added that since 2015-16, 18,376 ‘consent to operate’ were issued, out of which 5,544 was in the last financial year 2019-20 up to February.

For October 2019 to March 2020, with inflows of ₹52073.01 crore, Maharashtra accounted for 30.35% of the inflows, followed by Karnataka with 17.92%, Delhi 16.6%, Gujarat 11.05% and Jharkhand 7.7%.

Overall, India’s foreign direct inflows increased 14% to ₹353,558 crore in rupee terms in FY19-20, from ₹309,867 crore during the same period last year.