One State, One Bet: How Tamil Nadu Rewired India’s Electronics Map

Tamil Nadu’s dominance in India’s electronics exports is not a statistical quirk; it is the outcome of a conscious and sustained industrial bet. In 2024-25, the state accounted for more than 41% of India’s electronics exports, with shipments valued at $14.65 billion, almost twice the level of the previous year and three times that of two years earlier. Electronics has now become Tamil Nadu’s second-largest export sector, overtaking garments and cotton textiles. 

Electronics today accounts for 28.1% of the state’s total exports, while readymade garments have declined to just over 10%.

This is not merely a story of trade performance; it marks a restructuring of Tamil Nadu’s economic foundation. The numbers reveal a decisive shift away from legacy, low-margin sectors toward a globally traded, technology-intensive industry with scale, productivity, and export pull. In economic terms, the state has moved up the value chain by building on comparative advantage and agglomeration effects.

The industrial clusters around Sriperumbudur and Oragadam did not emerge by chance. They developed because factories, suppliers, logistics firms, and skilled workers were encouraged to grow together. When Foxconn, Pegatron, and Tata Electronics established operations, they pulled an entire ecosystem in their wake, shortening lead times, cutting costs, and enabling rapid scaling.

Policy Discipline
This is not a laissez-faire story. The Tamil Nadu government invested heavily in infrastructure, building high-capacity industrial parks, specialised logistics corridors, and digital single-window clearance systems. Public capital expenditure lowered entry barriers for private firms and helped crowd in investment at scale.

Labour policy has been equally deliberate. State-supported housing for 19,500 electronics workers and targeted skilling programmes aligned to factory needs have reduced workforce friction, improved mobility, and stabilised labour supply, critical advantages in an industry where production schedules are tight and margins thin.

There is also a macro-stability logic at work. Reliable power, four international airports, four ports, and relatively predictable labour relations have enabled manufacturers to meet just-in-time export commitments without generating cost spirals or logistical bottlenecks. The result has been rapid export growth without the strains that often accompany industrial booms.

Equally important has been the conscious reshaping of the export basket. Tamil Nadu has steadily shifted away from a textile-centric model toward engineering and electronics, sectors with higher productivity and deeper integration into global value chains. In doing so, the state has avoided the low-value-added manufacturing trap that constrains regions overly dependent on labour-intensive assembly.

There are, of course, limits to replication. Tamil Nadu’s success rests on decades of institutional stability, a deep skills base, and a favourable geographical location, advantages that cannot be recreated overnight elsewhere. But the governing principle is widely applicable: align policy, infrastructure, and export orientation, and sustain that alignment over time. The next frontier lies in value retention, moving from assembly to design, research and development, and intellectual property creation.

Tamil Nadu’s experience shows that industrial success is not built on incentives or slogans alone. At its core, this story is about sequencing, coordination, and patience. The state chose electronics, stayed the course, and invested steadily in the conditions required to make the sector globally competitive. In doing so, it has not just altered its own economic trajectory but shown what India’s manufacturing ambitions truly demand.