Modi battles for con­trol of nation’s Apple heart­land

Elec­tron­ics power­house state Tamil Nadu con­tin­ues to spurn prime min­is­ter’s party

ANDRES SCHIPANI AND JYOTSNA SINGH THANJAVUR

Days after Apple decided to change its lead­er­ship, voters in the Indian state that is now one of the com­pany’s biggest pro­duc­tion bases were asked whether they should do the same.

Tamil Nadu has become a crit­ical hub for Apple sup­pli­ers such as Taiwan’s Fox­conn and domestic group Tata Elec­tron­ics, which assemble iPhones in the state, part of Prime Min­is­ter Nar­en­dra Modi’s “Make in India” drive to turn the coun­try into a man­u­fac­tur­ing power­house and sup­ply chain rival to China.

Last year, the state of 72mn accoun­ted for 41 per cent of India’s total elec­tron­ics exports.

Com­pan­ies “are here because they felt this is the right place”, industry min­is­ter TRB Rajaa told the FT as he was showered with flower petals in his con­stitu­ency of Man­nar­gudi. “You can blindly close your eyes, put your fin­ger on the state map, and place an industry there.”

Polls yes­ter­day offered a ref­er­en­dum on that indus­trial strategy, as a coali­tion includ­ing Modi’s Bhar­atiya Janata Party attemp­ted to unseat Rajaa’s sec­u­lar pro­gress­ive Dravida Mun­netra Kazhagam party, led by fiery chief min­is­ter MK Stalin. Res­ults are expec­ted on May 4.

Des­pite dom­in­at­ing Indian polit­ics for more than a dec­ade, Modi has struggled to make inroads in India’s pros­per­ous south. Tamil Nadu in par­tic­u­lar is a bas­tion of anti-Modi sen­ti­ment, with sec­u­lar lead­er­ship that has long res­isted the BJP’s hard­line Hindu nation­al­ism and efforts to pro­mote Hindi, which is unre­lated to Tamil, the state’s lan­guage.

The BJP “never tried to under­stand Tamil Nadu”, said Rajaa. “They try to bring in their ideo­logy and steam­roll it into every state. That will never work in Tamil Nadu.”

India’s south­ern­most state is among the coun­try’s most eco­nom­ic­ally suc­cess­ful. GDP per cap­ita is well above the national aver­age, and the state man­u­fac­tur­ing sec­tor’s share of real GDP is at 24 per cent, clos­ing in on Modi’s national tar­get of 25 per cent and well above the national aver­age of about 17 per cent.

Eco­nom­ist M Vijayabas­kar at the Madras Insti­tute of Devel­op­ment Stud­ies cred­its this suc­cess to a “Dravidian Model” of south­ern Indian gov­ernance that mar­ries indus­tri­al­isa­tion and social wel­fare and has kept local parties in power in Tamil Nadu since 1967.

The edu­ca­tion sys­tem churns out tens of thou­sands of engin­eer­ing gradu­ates annu­ally, who have con­trib­uted to turn­ing Tamil Nadu into India’s man­u­fac­tur­ing power­house, with more than 40,000 factor­ies.

India is now the second-biggest mobile phone maker glob­ally, with Tamil Nadu host­ing almost 47 elec­tron­ics man­u­fac­tur­ing units. The state’s motor industry is also one of India’s largest, with Tata’s Jag­uar Land Rover now pro­du­cing Range Rovers, help­ing push GDP growth to 11.2 per cent in the 2024-25 fiscal year — the fast­est among India’s states, accord­ing to offi­cial data.

“Today, the most valu­able sup­ply chain in the world is in Tamil Nadu,” said Josh Foul­ger, pres­id­ent of IT hard­ware at Dixon Tech­no­lo­gies in the state cap­ital Chen­nai.

Veera Shekharan, an engin­eer from Man­nar­gudi, said he planned to back the DMK, which he said had “brought devel­op­ment” to the area and turned the “land of temples”, as Tamil Nadu is known, into “a land of factor­ies”.

Regional elec­tions are chal­len­ging to pre­dict but ana­lysts believe it will be dif­fi­cult for the BJP, which is part of the local oppos­i­tion All India Anna Dravida Mun­netra Kazhagam (AIADMK) alli­ance, to over­come the his­tor­ical divi­sions between India’s north and south.

“The BJP is try­ing very hard . . . but that party doesn’t fit our DNA,” said J Jeyaran­jan, exec­ut­ive vice-chair of the State Plan­ning Com­mis­sion. “We don’t need reli­gion mixed with polit­ics. Even though we have the largest num­ber of temples in India, we just focus on busi­ness.”

Last week, Stalin burned a copy of a Modi-backed bill that would have expan­ded the size of the national par­lia­ment. Crit­ics said it would dis­pro­por­tion­ately empower north­ern states at the expense of south­ern ones.

Still, ana­lysts acknow­ledge that the BJP’s sup­port has increased, with Modi him­self cam­paign­ing in the state last week, as frus­tra­tion mounts with alleged venal­ity among local offi­cials and polit­ical dyn­asties.

“There is a very strong anti-incum­bency in this elec­tion,” said Kovai Sathyan, a spokes­per­son for the AIADMK.

Modi told a rally that the DMK was “a party centred around dyn­astic polit­ics” and that its local “gov­ern­ment is run­ning on the basis of the ‘three Cs’ — cor­rup­tion, col­lec­tion and com­mis­sion”.

Ana­lysts said that whichever party emerged vic­tori­ous, they would be loath to unsettle the state’s eco­nomic model, includ­ing a busi­ness envir­on­ment that cuts through India’s notori­ous red tape.

Arvind Sub­ramanian, a senior fel­low at the Peterson Insti­tute for Inter­na­tional Eco­nom­ics and adviser to the gov­ern­ment of Tamil Nadu, said there was a “polit­ical con­sensus” that “we should not make things dif­fi­cult for investors”.

“Once they set up shop, they should not face policy reversals if the gov­ern­ment changes because the bur­eau­cracy has con­tinu­ity across polit­ical parties,” he added. “All parties real­ise that if they mis­be­have, there will be longterm con­sequences.”