Economic Performance of States in FY 2022-23

Skilled labor, strong infrastructure, industry promotion policies, and a competitive investment climate make South India a highly favorable regional destination for multinational firms looking to invest in India. By investing in states across South India, multinational firms can tap into their diverse and rapidly growing markets, gain a competitive edge, and expand their global reach. We discuss some of the economic parameters that underline the fiscal stability and investment appeal of the region.

Regional overview

South India is emerging as one of the most lucrative investment destinations in India, with five states – Karnataka, Andhra Pradesh, Telangana, Tamil Nadu, and Kerala – leading the charge. Boasting strong agriculture, manufacturing, and services sectors, these states offer a plethora of investment opportunities to multinational firms looking to expand their presence in India.

The opportunities range from production and sourcing to research and development (R&D) besides agriculture allied activities. Local supply chains are well developed in these states and compete for foreign investment in both mature sectors like electronics, textile and apparel, and automotive manufacturing, IT software and enabled services, as well as sunrise sectors like artificial intelligence, green energy, electric vehicles, and genomics and pharmaceuticals. Top start-up hubs in the region are Bengaluru (Karnataka state), Hyderabad (Telangana state), and Chennai (Tamil Nadu state).

Another key factor that makes South India an attractive investment destination is its robust logistics infrastructure. The coastal states, in particular, benefit from easy access to ports, making it easier to transport goods both domestically and internationally. This, coupled with the presence of skilled labor and reputed higher education and R&D hubs, makes South India a sought-after regional destination for businesses in the manufacturing and services sectors.

In terms of the local business ecosystem, South Indian firms are considered to be conservative. These businesses view their operations as long-term ventures, rather than short-term opportunities to be exploited. They tend to avoid excessive borrowing and are committed to following the law. Additionally, these companies typically keep a low profile. Such businesses are known for their consistent growth, performance, and dividends, which results in greater earnings predictability. There are always exceptions, and foreign companies seeking local enterprises for business matchmaking or to enter into local sourcing contracts are advised to conduct their due diligence.

Each of the South Indian states boast of corporate investments by leading multinational firms and Fortune 500 companies.

Major Multinational Companies Investing in South India

State in South India

Major investors

Andhra Pradesh

Foxconn, Gamesa, GlaxoSmithKline, ISUZU, Kellogg’s, KG, Mylan, Pepsi, Mondelez International, Godrej, GMR, Hero, Kia, Wipro, MI, Reliance, Walmart, LT, Biocon, Aditya Birla UltraTech


Cisco, Oracle, DreamWorks Studio, Saint-Gobain, Delphi, EA Sports, GE, Intel, Novozymes, Nvidia, Qualcomm, SONY, Texas Instruments, Rolls Royce, Toyota, Volvo, ABB


Xerox, Roots, a.hartrodt, reon technologies, Infosys, rrj communications, Collabera, Nissan, LuLu

Tamil Nadu

ABB, Accenture, Coca Cola, Daimler, Dell, flex Foxconn, GE, Renault-Nissan, Honeywell, Hyundai, Lotte, Michelin, Nokia, Nestle, Pfizer, ramco aviation, Samsung, Siemens, Wockhardt, Yamaha, Ola Electric, TVS Motors, Ather Energy, Ampere


Samsung, Microsoft, Facebook, Amazon, Ferring Pharmaceuticals, Lonza, Pratt & Whitney, Oracle, Cisco, Google, Coca Cola, Hyundai, GE

Economic performance in FY 2022-23

The five South Indian states are collectively responsible for 30 percent of India’s GDP as per data from the Reserve Bank of India (RBI) and the respective state budgets and economic surveys. This is a clear indication of their economic strength and potential for growth. Investing in South India is, therefore, a smart business decision that can yield significant returns.

Karnataka, Andhra Pradesh, Telangana, Tamil Nadu, and Kerala offer a wide range of investment opportunities across various sectors, such as information technology and electronics, pharmaceuticals and biotechnology, food processing and agritech, renewable energy, healthcare, start-ups, export-import trade, and infrastructure. These states also have favorable policies in place to attract foreign investment, including tax exemptions, subsidies, land availability, simplified regulations, and support from investor handholding agencies.

Below we take a quick look at the performance of the five South Indian states on key economic parameters in FY 2022-23 based on official data and reporting from Business Today.

GSDP output

In terms of contribution to the economy, Tamil Nadu leads the pack with a gross state domestic product (GSDP) of INR 24.8 trillion (approx. US$302.13 billion) (at current prices) and is the biggest state in South India. This is followed by Karnataka with a GSDP of INR 22.4 trillion (approx. US$297.26 billion), Telangana at INR 13.3 trillion (approx. US$162.03 billion), Andhra Pradesh at INR 13.2 trillion (approx. US$160.81 billion), and Kerala with INR 10 trillion (approx. US$121.82 billion). [US$1=INR 82.08]

Tamil Nadu is projected to grow 14 percent from the last fiscal to generate INR 28.3 trillion (at current prices) in GSDP in FY 2023-24, according to its current state budget.

Per capita income

Telangana reported the highest per capita income in the region at INR 275,443 (approx. US$3355.67), followed by Karnataka at INR 265,623 (approx. US$3236.04), and Tamil Nadu at INR 241,131 (approx. US$2937.66). Kerala is in the fourth spot with a per capita income of INR 230,601 (approx. US$2809.37), followed by Andhra Pradesh in fifth with per capita at INR 207,771 (approx. US$2531.24).

The South Indian states thus boast a higher regional per capita income – on average – than the national average of INR 150,007 (approx. US$1827.51).

State tax revenue

Tamil Nadu is the top ranked on this parameter, with the highest tax revenue collected in South India at INR 1.26 trillion (approx. US$15.42 billion). This is followed by Karnataka at INR 1.11 trillion (approx. US$13.58 billion), Telangana at INR 929.1 billion (approx. US$11.31 billion). In the fourth and fifth positions are Andhra Pradesh with tax revenue collected worth INR 852.65 billion (approx. US$10.38 billion) and Kerala with INR 718.33 billion (approx. US$8.75 billion), respectively.

Debt-to-GSDP ratio

The state of Telangana has the lowest debt-to-GSDP ratio at 25.3 percent while Kerala has the highest at 37.2 percent. Debt-to-GSDP ratio for Karnataka is 27.5 percent, followed by Tamil Nadu at 27.7 percent, and Andhra Pradesh at 32.8 percent.

Gross fiscal deficit

The southwest state of Karnataka boasts of the lowest fiscal deficit in gross terms at 2.8 percent. This is followed by Andhra Pradesh showing 3.2 percent, Tamil Nadu at 3.8 percent, Telangana at 3.9 percent, and Kerala at 4.2 percent.

Ratio of interest payments to revenue receipts

Of the five South Indian states, the state of Telangana has the lowest interest payment to revenue receipt ratio at 11.3 percent. This is followed by Karnataka and Andhra Pradesh at 14.3 percent, Kerala at 18.8 percent, and Tamil Nadu at 21 percent.

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India Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in Delhi and Mumbai. Readers may write to for more support on doing business in in India.

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