Tamil Nadu logs 11.19% growth in 2025 as industrial push gathers pace

Known for its vibrant industrial ecosystem, Tamil Nadu continued to post steady gains in 2025, witnessing record IT and electronics exports, attracting new investment proposals in sectors such as automobiles and aerospace, and heading into 2026 with double-digit growth.

The re-entry of US-based car maker Ford Motor Company brought optimism, even as concerns emerged in the knitwear hub of Tirupur following revised US tariffs on Indian imports.

The state recorded an all-time high growth rate of 11.19 per cent, which Chief Minister MK Stalin attributed to the sustained economic policies of the DMK government that assumed office in 2021.

According to industry department officials, Tamil Nadu had earlier recorded its highest growth rate of 9.69 per cent during the 2010-11 financial year, when late DMK patriarch M Karunanidhi was Chief Minister.

“We are not saying this. As per the Union Ministry of Statistics and Programme Implementation’s revised estimates, during 2024-25, Tamil Nadu has achieved 11.19 per cent growth,” Stalin said.

In 2025, Ford Motor Company decided to invest Rs 3,250 crore for the production of new-generation engines at its facility in Maraimalai Nagar, near Chennai. The company had announced in 2021 that it would cease vehicle manufacturing in India and exit the market, including shutting its Tamil Nadu factory spread over 400 acres, located about 45 km south of Chennai.

In 2024, the company submitted a Letter of Intent (LoI) to the Tamil Nadu government, confirming its intention to use the Chennai facility for engine manufacturing. The proposed investment is expected to create 600 direct jobs and build on the state’s automobile ancillary ecosystem, Stalin had said.

Tamil Nadu also recorded a significant milestone with electronics exports touching a historic high of USD 14.65 billion in FY 2024-25, marking a 53 per cent increase over the previous year. In FY 2023-24, the state had recorded USD 9.56 billion in electronics exports.

Industry department sources said the latest export figures account for 41.23 per cent of India’s total electronics shipments.

In August 2025, as per the Centre’s Annual Survey of Industries 2023-24, Tamil Nadu ranked first in industrial employment, accounting for 15.24 per cent of all factory workers in India. The state also has the highest number of factories at 40,100 units.

The state government has been focusing on inclusive and equitable growth. To boost industrial development across regions, it conducted region-specific ‘Rising Investor’s Conclaves’ in August and November.

Such conclaves were held in Coimbatore and Tuticorin to attract investments. At the Coimbatore edition in November, the state signed 158 memoranda of understanding (MoUs) involving investments worth Rs 43,844 crore, which are expected to generate over one lakh jobs.

At the Tuticorin conclave, Tamil Nadu secured over Rs 32,000 crore in investments by signing 41 MoUs for new projects focused on sectors such as renewable energy and shipbuilding.

At the maiden edition of AeroDefCon 2025 held in October, the state secured Rs 23,000 crore in investments in the aerospace and defence sector, with a target of Rs 75,000 crore by 2032.

However, the US government’s decision to levy a 50 per cent tariff on Indian exports had an adverse impact on Tirupur, known as the knitwear capital of India. Exporters in the region reported a loss of Rs 15,000 crore in orders, production cuts of up to 30 per cent across units, and job losses.

Stalin had urged Prime Minister Narendra Modi to prioritise resolution of the tariff issue through bilateral agreements with the US government.

Textile and apparel exports from Tamil Nadu account for 28 per cent of India’s total textile exports and employ about 75 lakh people.