Tamil Nadu’s Industrial Setbacks Spotlight Policy Roadblocks
Missed investments and stalled infrastructure revive debate on reform and industrial confidence
By : Guest Post
Update: 2025-12-04 07:20 GMT
Tamil Nadu’s industrial landscape is under renewed scrutiny after yet another high-profile investment slipped away from the state. The latest setback came when the Hwaseung Footwear Group, which was expected to set up a large manufacturing unit in Tuticorin with an investment of ₹1,720 crore and the potential to generate nearly 20,000 jobs, opted instead for Andhra Pradesh. The development, coming soon after Google chose Visakhapatnam over Chennai for a major data centre, has raised important questions about Tamil Nadu’s investment climate.
These episodes, although separate, point to a broader concern about the state’s diminishing ability to convert high-value investment opportunities. Such reversals risk creating a perception gap at a time when manufacturing states are competing intensely for global capital. The Hwaseung case is not the first instance in recent months where expectations raised in the state did not match eventual outcomes. Earlier, a claim that Foxconn had committed a ₹15,000-crore investment and 14,000 high-value engineering jobs was publicly contradicted by the company, which clarified that no new agreement had been reached. According to industry observers, contradictions of this kind create a credibility challenge for the state’s investment pitch and allow rivals to move swiftly.
Akhilesh Sinha
The concerns around Tamil Nadu’s current industrial position also draw attention to decisions affecting long-established assets. Among them, the closure of the Sterlite Copper plant in Thoothukudi in 2018 remains one of the most consequential. Before it shut, Sterlite Copper was among India’s largest copper producers and, according to industry estimates, accounted for nearly three per cent of Tamil Nadu’s gross state domestic product. The facility produced more than a third of the country’s copper output and supported extensive downstream manufacturing. Estimates indicate that during FY14 to FY18, the plant contributed around ₹13,500 crore to the national exchequer. It directly employed over 4,000 workers and enabled nearly 20,000 more livelihoods across associated sectors.
The closure led to a sharp reconfiguration of the country’s copper supply chain. India, which was among the top five exporters of copper cathodes in 2017-18, became a net importer the following year. Downstream industries that relied on the plant for raw material faced disruptions, while the region lost a major driver of economic activity and employment.
In this backdrop, the renewed discussion on a possible green restart of the Sterlite Copper facility has acquired significance. The company has proposed a re-engineered model that, it says, departs from earlier practices and relies on strengthened environmental safeguards. The plan outlines a shift to advanced smelting systems, upgraded emission controls and a redesigned water-management framework. According to industry estimates, the hybrid production model, which combines primary copper concentrate with recycled scrap, could reduce the plant’s carbon footprint by more than one-third, cut hazardous waste by nearly 40 per cent and ensure zero liquid discharge through the use of desalinated seawater and treated municipal wastewater.
The proposal also places considerable emphasis on continuous monitoring, with a digital ecosystem built around AI-based predictive maintenance, real-time emission optimisation and automated alerts for health and safety deviations. To address longstanding concerns about local engagement, the plan includes the creation of a Local Management Committee made up of plant officials, panchayat representatives, environmental specialists, civil society members and retired administrators. The company has also committed to supplying surplus desalinated water to nearby villages and setting aside a dedicated CSR fund of ₹100 crore for schools, health infrastructure, skilling and targeted support for disadvantaged groups.
This article is written by Akhilesh Sinha, a senior political analyst.