Tier II, III cities becoming viable investment options

The Tamil Nadu Government's proactive investment policy has led to the emergence of Tier II and Tier III cities as attractive investment destinations with more companies opening businesses there in the past few months, according to an analysis by the Confederation of Indian Industry-Southern Region. Companies operating out of Tier II cities such as Coimbatore, Madurai and Tiruchi and Tier III cities such as Virudhunagar, Tuticorin, Karur, Sivagangai and Tirunelveli have doubled, or even tripled, their turnover in just two years, Sanjay Jayavarthanavelu, chairman, CII Tamil Nadu State Council, told reporters at the inauguration of Innovision 2007, a symposium on innovation in industries, on Thursday. With Tamil Nadu in general and Chennai in particular becoming one of the most favoured investment destinations, the CII, together with the Government, was promoting Tier II and III cities as hubs for IT and manufacturing industries. For example, a city like Tiruchi had witnessed a buoyant growth with many companies touching the Rs.100-crore mark and some even exceeding Rs. 1,500 crore. Boilers, energy and fabrication units catered both to the export and import markets. The cut-flowers industry in Virudhunagar had several units doing business above the Rs. 200-crore mark annually. Many IT majors were now looking towards Tier II cities. About 40 companies had come up in Tiruchi in the past few months. There were immense possibilities for industrial units to foster innovation in process development and services delivery, said Ajai Chowdhry, chairman and CEO, HCL Infosystems. However, the lack of an enabling research and development atmosphere in academic institutions was a major hurdle in creating innovations in industries. Only an industry-academia link could solve this.