VinFast pledges to invest ₹16k cr to build EV unit in Thoothukudi

Vietnamese automaker VinFast Auto committed to invest ₹16,000 crore, or $2 billion, to build an electric vehicle (EV) manufacturing unit in Thoothukudi, part of ₹60,000 crore worth investments in that companies announced for Tamil Nadu during the third edition of the Global Investors Meet held in Chennai on Sunday.

Among the pledges were those made by Apple Inc supplier Pegatron, Tata Electronics, other automakers and energy companies, who were among a dozen to sign memorandum of understanding (MoU) deals with the state.

The Dravida Munnetra Kazhagam (DMK) government led by chief minister MK Stalin launched its first investors’ meet amid expectations that it will surpass the two previous meets by the previous All India Anna Dravida Munnetra Kazhagam (AIADMK) regime in 2015 and 2019 under late J Jayalalithaa and Edapaddi K Palaniswami, respectively.

The earlier editions drew investment pledges worth ₹242,160 crore and ₹268, 296 crore, respectively, but several firms dropped their plans in the following years. The southern state this time wants to attract investment pledges of ₹5.5 lakh crore in the two-day summit.

On Sunday, Tata Electronics inked a deal to invest ₹12,082 crore to expand its enclosure manufacturing unit and mobile assembly plant for various brands in Krishnagiri district. Taiwan’s Pegatron, which assembles Apple’s iPhones, will invest ₹1,000 crore in Chengalpattu district to manufacture computing, communications and consumer electronics devices.

While China has been Apple’s largest production hub, India has been key to its supply chain with its share in exports in smartphones rising from 1% in 2020 to 7% in 2023 after Apple began assembling iPhones through contract manufacturers last year in the country.

For Tamil Nadu, which emerged as the top electronics export state in 2022-23 at $5.37 billion, the investments by Tata and Pegatron are another boost. The state’s electronics exports for the initial months of the 2023-24 was $4.8 billion, twice that of Uttar Pradesh, which followed with $2.5 billion.

JSW Energy signed the second-largest MoU at ₹12,000 crore, followed by Hyundai at ₹6,180 crore, TVS at ₹5,000 crore, Godrej Consumer with ₹515 crore, Mitshubishi with ₹200 crore and Qualcomm at ₹177 crore. The deals are expected to generate thousands of jobs in the state, the government said.

After the DMK formed the state government in May 2021, it framed an ambitious plan to become a $1 trillion economy by 2030. “What is more important than actually achieving the goal of a $1 trillion economy are the kind of forces that it propels within the state,” former Reserve Bank of India governor Raghuram Rajan said during a discussion at the event.

CM Stalin also launched the state’s policy for semiconductors and advanced electronics on the first day of the summit. One of its key objectives is to ensure Tamil Nadu contributes to 40% of India’s electronics exports by 2030.

“There are more people working on chip design in India as compared to the rest of the world. Owing to the intense work force, many multinational firms prefer setting up offices in the country. So, it is not a surprise that Qualcomm has chosen to set up a facility in Tamil Nadu,” Chris Miller, author of Chip War, said during a chat on semiconductors with Rahul Sharma, managing director of APCO Worldwide, a consultancy.

India has the advantage of having one of the world’s youngest populations, which is prepared to work collectively to build a developed nation by 2047, Union commerce minister Piyush Goyal said.

“Tamil Nadu is on the fast track to economic growth and has attracted substantial investments,” Stalin said. “This Global Investors Meet will pave the way to further accelerate the quantum of investments to the state and consequent industrial growth.”