Maharashtra Misses Out on Semiconductor Boom as Other States Surge Ahead

Maharashtra Misses Out on Semiconductor Boom as Other States Surge Ahead

Maharashtra lags behind in investment: Taiwanese companies are turning to other states due to the state's slow process.
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Despite India attracting significant foreign investment in the semiconductor and electronics sectors in recent years, Maharashtra appears to be lagging behind, missing several golden opportunities to establish itself as a major hub. Major global players such as Taiwanese giants Foxconn and Pau Chain, though initially signing agreements with the Maharashtra government, have ultimately chosen to set up operations in states like Gujarat, Tamil Nadu, and Uttar Pradesh. Notably, a $5 billion deal with Foxconn, signed in 2015, failed to materialize in the state. Several such companies expressed interest in Maharashtra at the initial stages but later opted for other states, citing more conducive investment environments.

Tamil Nadu's Proactive Approach Yields Results

In stark contrast, Tamil Nadu has adopted investor-friendly policies specifically tailored to attract Taiwanese and South Korean electronics firms. The state has implemented a range of strategic initiatives including the appointment of industry liaisons and consultants, creation of institutions offering ‘plug-and-play’ infrastructure, rapid availability of industrial clusters and land plots, and fast-track permit systems. These proactive measures have borne fruit. In FY 2023–24, Tamil Nadu recorded $9.56 billion in electronics exports, accounting for 33% of India’s total electronics exports.

Challenges in Maharashtra

Experts point out that Maharashtra’s shortcomings stem from slow processes, bureaucratic hurdles, and inefficient communication with foreign investors. The state has yet to appoint local experts, interpreters, or mentors experienced in dealing with Taiwanese companies — a crucial step in building investor trust and easing the business setup process.

In an effort to reverse the trend, Maharashtra now plans to establish an international investment facilitation desk, with a focus on improving engagement with Taiwan and other key investor nations. The desk aims to strengthen communication channels and speed up project approvals. However, in the face of aggressive industrial policies adopted by competitor states like Gujarat, Tamil Nadu, and Uttar Pradesh, Maharashtra must act swiftly and decisively if it hopes to regain its position as a preferred investment destination.

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