A Trillion-Dollar Investment Façade? How Credible is TN Global Investors’ Meet

Chennai: The two-day international investors’ summit in Tamil Nadu concluded on January 24, with most of mainstream media praising the Edappadi government’s achievement in securing Rs. 3.4 lakh crore as investment. This is a humongous success, media reports said, since the targeted investment was Rs. 2 lakh crore.

From Hyundai to Chennai Petroleum Corporation Limited (CPCL), major organisations and companies together signed 146 memoranda of understanding (MoUs).  Chief Minister Edappadi Palaniswami declared that these investments would bring job opportunities for about 10.5 lakh people in the state. As usual, he paid due respect to his predecessor and AIADMK supremo late J Jayalalitha, saying it was her1992 industrial policy that paved the way for the growth of the automobile industry in the state.

So, is the situation as hopeful as the government is claiming? Let’s take a look at the first edition of this global summit that took place in 2015.

Failed Attempt

The first edition of the Tamil Nadu Global Investors’ Meet was held during the tenure of former Chief Minister J Jayalalitha. More than Rs 2.4 lakh crore worth of investments were promised. The big names included Kuwait-based Al Kharafi group, OPG Power Ventures, Uber, WS Industries, etc. The full list of investors can be found in this report by The News Minute.

But, in February 2018, the government stated that investments of Rs. 62,738 crore from at least 61 companies were at various stages of implementation. In other words, only about 25% of the proposed projects had been implemented and the government did not have any explanations for that. The same report cited that, according to the Ministry of Commerce and Industry, the amount of foreign direct investment (FDI) received by TN fell by more than 50% in the next financial year. Also, the state’s  ‘ease of doing business’ rank fell from 12 to 18. These factors indicate the abject failure of the previous global summit.

The ‘Old Wine in New Bottle’ conundrum
 

There are a number of new players in the new list of investments this time. Whether it becomes old wine in new bottle, only time will tell.

However, it is to be noted that some of the companies that promised thousands of crores of investments have had a bad reputation on the labour front. Last year witnessed a series of protests and struggles in many companies across sectors.

Foxconn, which had promised to set a smart phone assembly factory in Sriperumbudur worth Rs. 2,500 crore, is facing allegations of defrauding workers. In 2015, Foxconn’s plant in Sunguvarchatram in the suburbs of Chennai in Kanchipuram district of Tamil Nadu was closed, where 1,300 workers lost their livelihood overnight. They had been promised their jobs back when the company reopened, but were denied the same.

Also Read: ‘Conning’ Workers, the Foxconn Way?

Another investor, Hyundai (which promised over Rs 7000 crore investment) also faced a workers’ strike last year. The workers in their subsidiary company MSI went on strike for more than 80 days demanding collective wage bargain and recognition of union.

The history of such global summits and their success rate in India has not been that promising. Whether Tamil Nadu will defy this trend is something we will have to wait and see.