CHENNAI: The Export Preparedness Index (EPI) 2024 has brought attention to Tamil Nadu’s gains, particularly in electronics, where high-value manufacturing has begun to shape its export trajectory.
The report also lays out a broader picture of how the export economy is structured, where growth is coming from, and which pressures continue to affect.
Manufacturing continues to form the base of exports. In 2023-24, TN exported around Rs 1.4 lakh crore worth of engineering goods, contributing 35% of India’s auto component exports, which was around half of the country’s leather exports. These sectors remain central to export volumes and employment, supported by long-established supplier networks and industrial clusters built over decades.
What has shifted is the source of fresh growth. Electronics manufacturing has expanded far faster than other segments in recent years. Electronics exports rose from $1.86 billion in 2021-22 to $9.56 billion in 203-24 – a 414% increase in three years, lifting Tamil Nadu to the top position nationally with about one-third of India’s electronics exports.
Mobile phones and telecom equipment dominate this segment allied with manufacturers spreading production beyond China as part of efforts to reduce supply-chain risk. Kancheepuram recorded exports worth about $20.4 billion, accounting for roughly 4% of India’s total exports, placing it among the country’s leading export districts.
In jewellery hubs such as Coimbatore and Madurai, export orders have fallen by nearly 70% during peak seasons, affected by high gold prices and competition from machine-made jewellery
Considerable export activity is spread across multiple sector-specific hubs. Tirupur is identified as a centre for knitwear exports, while Karur is associated with home textiles and furnishings. Leather manufacturing and exports are linked to clusters in Vellore, Ambur and Ranipet.
Coimbatore is identified as an industrial hub associated with light engineering, auto components and jewellery. Hosur is noted as an emerging centre for electronics and electric vehicle manufacturing, while Thoothukudi is identified as a port-linked industrial centre supporting exports from southern districts.
However, there are constrained stresses linking labour, infrastructure and the ability to sustain. The report sustained stress in several traditional export sectors. Agriculture-linked exports are noted as declining. Artisanal textiles and goldsmithing face prolonged pressure.
In jewellery hubs such as Coimbatore and Madurai, export orders have fallen by nearly 70% during peak seasons, affected by high gold prices and competition from machine-made jewellery. In handloom clusters such as Manamedu, the number of active looms has declined from around 400 to just over 120. And, the labour movement is noted as one of the reasons.
Workers have moved out of weaving and other artisanal export activities alongside declining order volumes. In Manamedu, fewer active looms have reduced full-time weaving employment. In jewellery clusters such as Coimbatore and Madurai, the fall in peak-season orders has limited continuous work availability, with public employment schemes such as MNREGA cited as alternative income sources in some areas.
Access to institutional credit is stronger in metropolitan centres, while MSMEs in smaller towns rely largely on collateral-based lending
It is also to be noted that industrial wages in Tamil Nadu are higher than in some competing States in labour-intensive exports such as textiles, leather and gems and jewellery, while capital-intensive segments such as electronics are less sensitive.
Micro, small and medium enterprises (MSME) remain central to the export ecosystem in terms of numbers and employment. TN has around 23 lakh MSMEs, employing over 1.5 crore people and producing more than 6,000 products. The report notes differences in how these firms participate in exports. Access to institutional credit is stronger in metropolitan centres, while MSMEs in smaller towns rely largely on collateral-based lending.
In logistical infra, Chennai port handled around 51.6 million tonnes of cargo in 2023-24. At the same time, congestion at Chennai and Ennore linked to limited berthing capacity has affected turnaround times. Inland, saturated highways, constraints on industrial land availability and weaker logistics networks in smaller towns add to transport costs. Customs inefficiencies in tier-2 export hubs are flagged as increasing delays and costs, particularly for smaller exporters.
The report also points to gaps between capacity and export outcomes in newer areas. TN ranks among the leading states in renewable energy generation, particularly wind energy, but this capacity has not yet translated into a significant export presence in green manufacturing or low-carbon goods.