TN targets defence, aerospace investments of $10 billion

Our Bureau Chennai | Updated on January 23, 2019 Published on January 23, 2019

(from left) Nirmala Sitharaman, Defence Minister; Michael Brielmaier, President and MD, Ford India; Edappadi K Palaniswami, Tamil Nadu CM; O Panneerselvam, Deputy CM; MC Sampath, TN Industries Minister; K Gnanadesikan, TN Industries Secretary; Venu Srinivasan, Chairman, TVS Motor Co; Karan Adani, CEO of Adani Ports; and MM Murugappan, Executive Chairman, Murugappa Group at the inaugural session of the TN Global Investors Meet 2019, in Chennai on Wednesday   -  Bijoy Ghosh

Announces aerospace, defence industrial policy offering incentives, support

Tamil Nadu is keen to replicate its success in building a strong automotive base with the defence and aerospace sector. It has set an ambitious target of attracting investments worth $10 billion in ten years generating direct and indirect employment opportunities for one lakh people.

The State government has announced a slew of incentives, including subsidy for allotment of land, capital subsidy for individual units and for development of aerospace and defence industrial parks to make the State a preferred destination for investments.

The ambitious target and incentives were unveiled in the Tamil Nadu Aerospace and Defence Industrial Policy 2019 released at the second edition of Tamil Nadu Global Investors Meeting 2019 (GIM). Defence Minister Nirmala Sitharaman released the policy with Tamil Nadu Chief Minister Edappadi K Palaniswami receiving the first copy.

To attract global OEMs, tier-I suppliers and Indian majors to set up their units in Tamil Nadu, there will be flexibility in employment conditions including hiring of contract labour and working hours for women; 24X7 operations (three shifts), employment of women in night shifts.

Special incentives

The policy also states that new/existing manufacturing units with projects under the offset obligations requirement of the Defence Ministry will be offered special package of incentives. Concession will be given up to 30 per cent of land cost and 100 per cent reimbursement from stamp duty on land leased or purchased in the industrial parks/aerospace and defence parks promoted by State-run industry promotion agencies Sipcot/Tidco.

Further, both the industries will be given 100 per cent exemption on electricity tax on power purchased from public sector utility, Tangedco.

On capital subsidy for units, the policy says a new venture or expansion of existing aerospace and defence MSME industrial units with investment up to ₹10 crore will be given a back-ended capital subsidy at 10 per cent on its eligible fixed assets in ten equal installments over five years.

An infrastructure back-ended subsidy at 10 per cent of the eligible fixed assets with a ceiling of ₹10 crore for the development of aerospace and defence industrial parks will be given to developers, provided the project has a minimum of 50 acres. Development of MRO complex is also eligible for the subsidy, the policy said.

In her remarks, Sitharaman said the Defence corridor in Tamil Nadu is a vision of the Prime Minister Narendra Modi to make sure that defence production is not just for Indian consumers (Indian Armed Forces), but also for exports. Chief Minister Palaniswami, in his opening remarks said that the second edition of GIM targets an investment of ₹2 lakh crores, “which I am happy to say has already been exceeded.”

“I would like to share with you that our Government has approved an investment proposal by Foxconn to assemble premium brand smart phones at Sriperumbudur,” said Palaniswami.

At the inauguration, Japanese Ambassador to India Kenji Hiramatsu announced that All Nippon Airways will expand its operations in India by launching a direct flight from Chennai to Narita airport from October.

Industry leaders, including Venu Srinivasan of TVS Motors, Karan Adani of the Adani Group spoke on the State’s strengths in various sectors, including education.

Published on January 23, 2019
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