CHENNAI: Industries Minister TRB Rajaa, reacting to the decision of South Korean footwear major Hwaseung Enterprises shifting its investment to Andhra Pradesh, said on Saturday that Tamil Nadu will resist escalating incentive battles among the Indian states and would never join the “race to the bottom” by offering unrealistic incentive packages to lure investors.
He said the State will instead pursue a calibrated, region-specific strategy for attracting investment. He was responding to reports about the decision of the company, which had earlier signed a Memorandum of Understanding with the Tamil Nadu government to set up a non-leather footwear manufacturing facility in the southern Tirunelveli district.
The investment was expected to generate 20,000 jobs. Opposition parties in Tamil Nadu reacted strongly on Saturday, blaming the ruling DMK for the company’s decision to shift its investment to Andhra Pradesh.
Sources told TNIE that Andhra Pradesh had offered the company free land along with higher subsidies for power and other resources. “The firm asked Tamil Nadu to match the package, but the request was declined,” sources familiar with the discussions said.
Rajaa, in his statement, said Tamil Nadu would not treat investment promotion as a “daily competitive game,” arguing that decisions on incentives must be guided by sectoral needs, the economic value of jobs created and the government’s broader goal of distributing new investments across districts.
The approach, he said, aligns with Chief Minister M K Stalin’s agenda to expand industrial growth beyond traditional manufacturing corridors.
“Incentives and grounding of projects depend heavily on where companies are willing to locate,” Rajaa said. “High-value land cannot be handed out casually without understanding the outcomes. Some governments have large tracts of arid land; we have land with different economic pressures.”
He added that Tamil Nadu would “at no point join a race to the bottom” by offering “unrealistic packages” to lure investors—a stance aimed at critics who have accused the state of losing large projects to more aggressive competitors. The state, he said, would continue to prioritise “jobs for Tamil Nadu,” tailoring incentive structures to the skill base of each region.
Rajaa described Tamil Nadu as “the most trustworthy and the most industrialised state in India,” arguing that its mature manufacturing ecosystem allowed it to negotiate from a position of strength. He criticised “proxies of the opposition” for attempting to belittle the government’s investment record and said forthcoming announcements would underscore continued investor interest.