State‑Level Success of Tamil Nadu and Karnataka in India’s Electronics ‘China+1’ Drive
India’s push to shift some manufacturing out of China – known as the China+1 – is being realised not at the national level but through individual states. Tamil Nadu and Karnataka have emerged as the leading hubs for electronics assembly and component manufacturing, thanks to long‑term policy continuity, skilled labour pools and targeted incentives.
Key Developments (2026)
- In January 2026 the Centre approved new projects in Tamil Nadu under the ECMS, including mobile‑phone enclosure units by Yuzhan Technology and Tata Electronics.
- The PLI for large‑scale electronics ended on 31 Mar 2026; a successor scheme was approved on 15 Jul 2026.
- 22 ECMS proposals worth ₹41,863 crore were cleared, projected to create 33,791 direct jobs across eight states.
- The Cabinet eased Press Note 3, removing curbs that had deterred some investors.
Important Facts
• Foxconn operates a 300‑acre campus at Devanahalli, Karnataka, employing around 50,000 workers, 80% of whom are women.
• Tata Electronics took over Wistron’s iPhone plant in Narsapura (Karnataka) and is expanding rapidly.
• Tamil Nadu’s electronics exports reached $48 billion in FY 2025‑26, while imports of electronic components stood at $116 billion, indicating a large trade gap.
• The DPIIT data shows Tamil Nadu contributed only about 6% of total FDI equity inflows (Oct 2019‑Mar 2026), ranking fifth after Maharashtra, Karnataka, Gujarat and Delhi.
Exam Relevance
Understanding the state‑wise dynamics of the FDI landscape helps answer questions on industrial policy, regional disparities and the effectiveness of incentive schemes. The case of Tamil Nadu and Karnataka illustrates how long‑term skill development, land allocation and consistent governance can translate national policies into tangible outcomes – a theme often examined in GS III (Economy) and GS II (Polity) papers.
Way Forward
- Replicate Tamil Nadu’s model of sustained investment in technical education and supplier ecosystems in other high‑potential states.
- Accelerate backward linkages by encouraging component manufacturers through expanded ECMS and renewed PLI incentives.
- Address regional imbalances by extending infrastructure support to less‑developed states such as Bihar, Chhattisgarh and Jharkhand.
- Monitor the impact of the relaxed Press Note 3 on new foreign investments and ensure that policy continuity survives political changes, as highlighted by the recent government transition in Tamil Nadu.
Overall, the success of Tamil Nadu and Karnataka underscores that India’s “China+1” ambition hinges on state‑level readiness, not just central announcements.