After Manufacturing, R&D is Tamil Nadu’s New Destination

After successfully building Tamil Nadu into a manufacturing powerhouse, the state government is now ready to take the next step: turn the South Indian state into a hub of research and development (R&D) activity.

"Tamil Nadu is going beyond the manufacturing story. Our strength lies in the talent that we have. I think R&D is the right way to go forward," Dr TRB Rajaa, the Minister for Industries, Investment Promotions, and Commerce, said while speaking at the Future Powertrain Conclave organized by Autocar Professional and Government of Tamil Nadu.

TRB Rajaa at the Autocar Professonal Future Powertrain Conclave in Chennai

Tamil Nadu has firmly established itself as the major pillar of India's automotive manufacturing space, with the presence of global OEMs including Hyundai, TVS, Ashok Leyland, BMW, Daimler, Renault-Nissan, Mahindra and Stellantis, and tier 1 suppliers such as Rane, Sundaram Clayton, Brakes India, Lucas TVS, BorgWarner, MRF, CEAT and Apollo.

Around 40% of electric vehicles sold in India in early 2024 were manufactured in Tamil Nadu, with the state having a share of over 70% of electric two-wheelers sold in the country. The state has garnered multi-billion dollar investments from companies such as Hyundai, Tata Motors, Ola Electric, Ather Energy and VinFast for electric vehicle manufacturing

Tamil Nadu's ambitions in R&D come at a time when several global automotive players are expanding their R&D operations to India, particularly those in the software, engineering and electronics side. India's appeal as an R&D hub is driven by its large pool of diverse, experienced, and cost-effective talent.

"We are reaching for the sky in every sector that we have managed. And I think R&D, when I'm looking at R&D in [various sectors such as] electronics and textiles, R&D in automotive is the first thing that I will choose," Rajaa said.

The minister added that to successfully emerge as a hub of R&D activities, the state needs to go beyond giving tax incentives and low-cost land: It needs to invest in the people.

"R&D requires a lot of hand-holding. It needs to be backed by big funding by the Union and the State…We have already brought in a lot of labs. We have brought in a lot of testing facilities. We're giving it out to students from across the state. Many colleges are using top-notch software. We've done that, but it needs more," he added.