Why Chennai has become a key industrial hub in the south

Why Chennai has become a key industrial hub in the south

by Godrej Properties Limited

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‘The Detroit of India’ Chennai is well on its way to becoming a key industrial hub in South India. This city has quietly spent the past few years building a reputation as one of the best places to do business in India.Why is that so?

Transformation to a warehousing hub

Chennai, with its strategic location on the Coromandel Coast, boasts excellent port accessibility. That is one of the major factors for it becoming an industrial and commercial hub. As per the Chennai Corporation, there are 15,000 factories and industries licensed in Chennai city alone, making it South India’s largest commercial and industrial centre.

With manufacturers re-envisioning global supply chains after the pandemic, the requirement for top-notch warehousing for storing the finished products has become critical. This is an excellent opportunity for a commercial hub like Chennai, which is famed not just for its infrastructure but also for its position as a strategic Asian seaport.

Chennai is not known as the “Detroit of South India” for nothing. Over the years, the city and its surrounding regions have become preferred locations for business for many automobile companies and their ancillary units. Further, the e-commerce sector has also seen significant growth in the Chennai region. All these have led to an increase in demand for warehousing facilities in and around the city.

Ease of doing business

Another reason for Chennai becoming a key industrial hub in the south is the infrastructure setup that has made doing business easier.

For one, the Chennai region has seen the development of many important industrial corridors, including the Chennai-Kanyakumari Industrial Corridor, Chennai-Bengaluru Industrial Corridor, and the Tamil Nadu Defence Industrial Corridor.They’ve offered effective integration between infrastructure and industry and have led to overall social and economic development in the region.

What’s more, the local government now provides most tax and property-related services electronically, thus greatly increasing the ease of doing business. The state has created a single-window facilitation desk for foreign investors to get timely approvals for land allotment, clearances for factories, electricity connections, etc. Since the region also has a well-educated workforce, Chennai has transformed into a major outsourcing hub for international insurers and banks that have shown interest in setting up facilities here.

Finally, the local government is also taking steps to build on the state’s automotive industry to developits aerospace and defence sector further.

Cultural history

Chennai is an extremely welcoming place as the city’s spirit is to absorb and learn as much foreign culture and knowledge as possible. The city is grounded and humble, which is what makes it immensely appealing to foreign investors. Finally, thanks to the strong industrial development, the disposable income of the population at large has generally been on the rise for the past few years. As such, the state is still widely used as a testing ground by producers of FMCG (fast-moving consumer goods), including major Indian and foreign multinationals.That’s what makes Chennai ideal for international companies to gain a foothold in the Indian market, thus leading to its growth as an industrial hub.

Well-planned real estate development

Last but not least, one of the biggest contributors to Chennai becoming a key industrial hub in the south is its well-planned and ever-growing real estate market.Over the years, it’sgrown to be an excellent residential real estate market.

But what makes this coastal city so great to live in? Aside from its advantageous location, it’s the thriving economy, the extensive cultural legacy, and the strong infrastructure that’s resulted in Chennai becoming the cosmopolitan metropolis that it is today.

Secondly, the city drew ex-pats and people from all over the country and the world due to a rise in employment opportunities when it was still growing. Over time, it made quick progress by pursuing economic growth, thus developing into an important industrial and commercial hub in India.

However, one of the chief reasons for Chennai’s real estate development is that the average property prices here are relatively more affordable than any other top industrial/IT hub in the country, including Bengaluru and Pune. With residential property being more affordable,IT and other professionals flocked to the city, resulting in the city’s real estate boom. In fact, most of the micro-markets that are witnessing growth lie on the city’s outskirts, like OMR, Ambattur, and Oragadam. These regions are located thick in the middle of or close to the city’s industrial corridors and upcoming financial hubs.

Final thoughts

Chennai might have started out as an industrial hub, but it’s gone from that to becoming a residential hotspot, which in turn has bettered its prospects of being an industrial hub all the more. All these developments will certainly result in the city expanding outwards and giving its many regions a new lease of life as residential and commercial markets.

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