Motoring Ahead

With its diverse economy and strong local workforce, Chennai is proving to be a draw for foreign investors

- Amar Grover

Formerly known as Madras, Chennai is the state capital of Tamil Nadu, one of the largest of India’s southern states. Unless driving through this sprawling city in its dead-of-night calm, the first thing you’re likely to notice is the traffic. Dense, seemingly relentless and apparently governed by the simple maxim that everyone always has right of way, it might prove a stern test of newcomers’ nerves, as well as their vehicles’ horns.

Set by the Bay of Bengal alongside a vast sandy beach, it was here that Britain’s East India Company first gained a toehold on the Coromandel Coast in 1639. Fort St George initially dominated its leased strip of land and its subsequent expansion reflected both sporadic threats (from the French and various regional rulers) and the company’s increasing dominance of South India. The city gradually became the South’s principal naval base and administrative hub.

Today, Tamil Nadu is India’s second-largest state economy. It contributes 8.4 per cent to national GDP and ranks fourth in terms of foreign direct investment. It has more factories and Special Economic Zones than any other state, and ranks third in terms of both gross industrial output and overall exports (which in 2017-18 exceeded US$46 billion). Per-capita income is 31 per cent higher than the national average.

Independent indices also place Tamil Nadu among the country’s most “successful” states. The 2018 Public Affairs Index, published by India’s Public Affairs Centre think-tank, ranked it the second-best-governed state. For the second year running, Frost and Sullivan’s 2018 Growth Innovation Leadership Index for Economic Development in India – which evaluates 100 indicators across parameters such as economic prosperity and investment attractiveness – ranked Tamil Nadu second for overall economic development.