Building on a strong foundation of inclusive policies, Tamil Nadu has demonstrated remarkable economic resilience, consistently achieving growth rates of 8% or more since 2021-22. The state is expected to maintain a growth rate above 8% in 2024-25, according to the first Economic Survey of Tamil Nadu 2024-25.
The Tamil Nadu economy in 2024-25 faced global headwinds with its innate economic strength. The pandemic, coupled with geopolitical tensions and extreme weather events, disrupted global supply chains and triggered crises in the energy and food sectors. The global economy posted a real growth rate of 3.33 per cent in 2023. India’s economy recorded 7.61 per cent growth in 2022-23, 9.19 per cent in 2023-24 and 6.48 per cent in 2024-25, it said
The Survey highlighted that Tamil Nadu’s strong social policies, advanced infrastructure and skilled workforce have propelled its economic growth. Despite accounting for just 4 per cent of India’s land and 6 per cent of its population, the state contributed 9.21 per cent to the national GDP in 2023-24. Its Gross State Domestic Product (GSDP) reached ₹27.22 lakh crore, recording a nominal growth rate of 13.71 per cent and a real growth rate of 8.33 per cent.
In 2022-23, Tamil Nadu’s per capita income stood at ₹2.78 lakh, 1.6 times the national average of ₹1.69 lakh. Consistently surpassing the national average, the state ranks as the fourth-highest in per capita income in India.
Unlike other states where economic activity is centered around a single metropolitan hub, Tamil Nadu’s growth is spread across multiple cities. Urban centers like Coimbatore, Madurai, Tirupur, Tiruchirappalli and Salem play a vital role in the state’s economy, fostering balanced development and reducing the urban-rural divide.
Tamil Nadu is an industrial powerhouse, contributing 11.90% to India’s manufacturing GDP and leading the country in the number of factories. With 35.56 lakh Udyam-registered Micro, Small, and Medium Enterprises (MSMEs), the state ranked second nationally in 2023-24. Known as the “Detroit of India,” it hosts over 1,500 automobile and auto component factories while also excelling in textiles, leather and electronics manufacturing.
Tamil Nadu ranks first in motor vehicle production, apparel and leather goods and second in textiles, machinery and electronics. It is also a top exporter of engineering goods, electronics, garments, cotton yarn and leather products. In 2023-24, 33.31 per cent of the state’s workforce was engaged in industrial activities, with 15.97 per cent in manufacturing and 17.2 per cent in construction. The manufacturing sector grew at 8.33 per cent between 2021-22 and 2023-24, while construction expanded by 9.03 per cent, driven by double-digit growth in transport equipment, rubber and plastic products and chemicals.
Tamil Nadu’s service sector is a key driver of economic growth, spanning industries such as IT and IT-enabled services, finance, healthcare, education, tourism, hospitality and entertainment. Rapid urbanisation has fueled demand for essential infrastructure services, including transportation, housing and utilities.
In 2023-24, 54.63 per cent of the state’s urban workforce was employed in the service sector, nearing the national average of 58.07 per cent. Key employment areas included trade and motor vehicle repair (16.28 per cent), transport and storage (7.53 per cent), information and communication (6.28 per cent), education (5 per cent), accommodation and food services (4.86 per cent), financial and insurance services (2.84 per cent) and other services (11.84 per cent).
Tamil Nadu’s service sector has rebounded strongly post-pandemic, growing at 7.97 per cent between 2021-22 and 2023-24. The expansion was led by real estate (9.41 per cent), trade, repair, hotels and restaurants (7.98 per cent), and transport and storage (7.67 per cent).