How Chief Ministers are becoming Marketers-in-Chiefs

India’s manufacturing map has witnessed a visible change over the past decade. Largely agrarian states such as Uttar Pradesh and Haryana, where growth lagged, are emerging as new hotspots for manufacturing. Both states saw over 50% decadal rise in the number of operating factories since FY14.

Tamil Nadu continues to hold on to the number one position as home to the largest number of factories, as it has for years, and has successfully attracted new-age industries. However, its lead over other states narrowed significantly, with Gujarat emerging as the main challenger. In FY14, Tamil Nadu had at least 60% more factories than Gujarat. By FY24, that lead narrowed to just 20%, as Gujarat effectively wooed businesses to expand their manufacturing footprint in the state. Annual Survey of Industries data show that the number of factories in the western state rose by 46% over the decade.  

Gujarat eclipsed neighbour Maharashtra as it aggressively pursued a strategy to become a favoured manufacturing base for businesses, large and small. Until FY18, Maharashtra had the largest number of factories after Tamil Nadu. Undivided Andhra Pradesh had more factories than Maharashtra at the time of its bifurcation in 2014. Now Gujarat ranks second with the largest number of factories, about 25% more units than Maharashtra, which is at the third place.

Tamil Nadu has also been the top employer of factory workers and has managed to defend that position. About 16% of factory jobs are in the southern state. But Gujarat is fast narrowing the gap, having overtaken Maharashtra on that count also. These three states together account for more than 40% of factory jobs in the organised sector.

When it comes to total investment, Gujarat has sprinted ahead of competition, thanks to mega investments in petroleum refinery and related projects by Reliance Industries, renewable energy related manufacturing by Adani Group, and automobile manufacturing by Tata and Maruti Suzuki, among others. In recent years, the state has also attracted investment in semiconductor facilities.

This is a result of persistent efforts made to attract investors over the last two decades, even persuading companies to drop plans to invest elsewhere. It began under Narendra Modi as the chief minister of the state when he organised the first Vibrant Gujarat Global Summit in September 2003, as an initiative to rebuild and rebrand Gujarat. Modi’s counterpart in undivided Andhra Pradesh, N. Chandrababu Naidu, was focused on making the Hyderabad-Secunderabad belt into a global technology hub.

What’s clear is that investment decisions of businesses are increasingly influenced by persuasive skills and deals offered by states. This required chief ministers to don the hat of Chief Marketing Officer and Chief Executive Officer of their state. Andhra Pradesh CM Naidu has often referred to himself as a CEO of the state and functioned as one since the late 1990s.  

In many instances, chief ministers reinvented under compulsion, rather than by a desire, to be more than a politician. Changing demographics, rising aspirations of the youth and their demand for jobs, state’s fiscal condition, and the need to improve rankings on various indicators exerted pressure. The Centre’s Make in India initiative, and more lately, the Production Linked Incentive scheme also contributed to the rise of competition among states to attract investmen.

Most states rolled out red carpet, offering monetary and non-monetary sops. They ramped up infrastructure and logistics or gave subsidies to incentivise investors. Single window and time-bound clearances became a norm in some states as restrictive local rules and regulations were struck down. Chief ministers and other ministers who spoke to Business Today for the India@100 special issue emphasised ease of doing business and strengthening infrastructure among the key measures they implemented to create conditions to attract investors.

Highlighting the measures taken by the state, Gujarat Chief Minister Bhupendra Patel said: “We have strengthened ease of doing business through single-window clearance mechanisms, simplified regulatory processes and decriminalised more than 500 provisions under the Gujarat Jan Vishwas (Amendment of Provisions) Act, 2025. Sector-specific industrial parks through GIDC, early adoption of public-private partnerships for ports and infrastructure, and reliable power supply have further enhanced the state’s competitiveness.”

States are making conscious efforts to widen the spread of industrial units, with stress on developing regions that have lagged until now. Maharashtra has proposed dedicated projects for regions such as steel city in Gadchiroli and Chandrapur, Aurangabad Industrial Township Ltd (AURIC) in Chhatrapati Sambhajinagar and pharma city in Raigad. It has also taken several measures to smoothen processed for investors. “The Maharashtra Industrial Development Corpora­tion (MIDC) is the direct link between government and industry, handling land acquisition and disposal, and giving investors a one-stop point for investor relations across over 143 large industrial areas and 108 mini-industrial areas,” chief minister Devendra Fadnavis said.

Infrastructure development is being addressed on urgent basis across states. Like Maharashtra, Haryana is trying to promote underdeveloped regions. “Our approach is to create world-class industrial infrastructure before the investment arrives,” Haryana chief minister Nayab Singh Saini told us.

As states are rushing to industrialise, they need to identify sectors where they want investments as the nature of manufacturing is changing rapidly due to advances in technology and electronics and the introduction of artificial intelligence. “The future belongs to integrated industrial ecosystems rather than isolated sectors,” says Nara Lokesh, Andhra Pradesh Minister for Information Technology, Electronics & Communications and Human Resource Development.

Punjab too has recognised it need to move beyond traditional volume-led manufacturing towards high-value, technology-driven production. “Our focus is not merely on expanding industrial output, but on building a future-ready manufacturing ecosystem driven by world-class infrastructure, policy stability, ease of doing business and a highly skilled workforce,” state Minister for Industries & Commerce, Aman Arora said.  

The investment summits fetch states crores of rupees worth of investment commitment and become a talking point. The proof of the pudding lies in translation of those commitments into investment on the ground. At the Vettri Tamil Nadu Investment Conclave mid-August, investments involving more than Rs 67,000 crore were announced and several memorandums of understanding signed. As Uttar Pradesh’s Minister for Industrial Development, Export Promotion, NRI Affairs, and Investment Promotion Nand Gopal Gupta Nandi said, “Signing an MoU isn’t a legal commitment—there’s no penalty if a project doesn’t go ahead.”

States chief ministers and ministers describe businesses and investors as partners in growth. Telangana Minister for Information Technology, Electronics, Communications, Industries & Commerce and Legislative Affairs D. Sridhar Babu said: “We do not see companies as investors who come, establish operations, and leave. We see them as long-term partners. Our role is to help them grow through talent, world-class infrastructure, and faster decision-making.”

What India’s manufacturing map looks like in two decades from now will depend on how states navigate the changes happening around them and the partnership each of them builds with businesses and investors. For now, there’s healthy competition among Indian states to attract the biggest names.

 

@tinaedwin