As India aims to become a global economic powerhouse, Gujarat has emerged as a leading destination for major projects, including the Micron semiconductor plant, the Tata-Airbus facility, and numerous infrastructure investments. However, this influx has sparked allegations that the Modi government is channeling investments disproportionately to Gujarat, at the expense of states like Tamil Nadu, Karnataka, Telangana, and Maharashtra and the one leading the pack is none other than a leftist mouthpiece, The News Minute.
TNM’s Pooja Prasanna allegedly spoke to political leaders and industry insiders from these states who allege that federal incentives, fast-tracked approvals, and “helicopter diplomacy” are redirecting investments to Gujarat, creating an economic imbalance. Are these allegations founded, or is Gujarat’s success the result of strategic, criteria-based planning? Is this yet another hitjob by TNM now that Maharashtra elections are just around the corner?
First of all, the article that they promised would “expose” this disturbing truth is behind a paywall. Second, the video that was published alongside the article is full of gas as expected – with no credible source or numbers and data, just speculation after speculation for 10 whole minutes. After going through the video, we decided to list out their allegations and counter them factually.
Allegation 1: Shifting Projects Away From Other States
According to “opposition leaders” TNM spoke to, multiple high-value projects originally destined for Tamil Nadu, Karnataka, Telangana, and Maharashtra have been redirected to Gujarat. They claim that initiatives such as the Micron plant, initially slated for Telangana, and the Tata-Airbus project initially planned for Maharashtra, were rerouted under pressure from the Prime Minister’s Office (PMO).
What’s The Truth?
The federal government’s investment strategy encourages competitive readiness. Projects are awarded to states based on various factors, including accessibility to resources, logistical advantages, and infrastructure suitability. Gujarat’s success in securing these projects reflects its infrastructure preparedness, rather than political favoritism. Similar high-profile investments continue to flow into other states where conditions align with the requirements of PLI (Production-Linked Incentive) and other competitive, criteria-based frameworks. Maharashtra, Tamil Nadu, and Telangana, for example, remain leaders in sectors like manufacturing, technology, and aerospace.
With regard to the shift of Tata Tata-Airbus project to Gujarat, a white paper from Maharashtra’s Industrial Development Corporation (MIDC) revealed that the then MVA government had not signed any formal Memorandum of Understanding (MoU) for land acquisition for the Tata-Airbus project.
Allegation 2: Exclusive Incentives For Gujarat’s GIFT City And Dholera
TNM argues that the Central Government granted Gujarat’s GIFT City (India’s first International Financial Services Centre) exclusive benefits, such as extensive tax exemptions and currency transaction flexibilities that were initially meant for Mumbai. They also allege that Dholera, another industrial hub in Gujarat, receives state-of-the-art infrastructure support and that both hubs attract disproportionate central assistance.
What Is The Truth?
GIFT City and Dholera are part of a broader “Industrial Corridor” strategy aimed at boosting economic growth through specialized hubs across the country. Originally proposed in the early 2000s, GIFT City’s selection over Mumbai was based on Gujarat was chosen for the development of GIFT City over Mumbai primarily due to a combination of strategic factors, including the state’s pro-business policies, availability of land, and a focused vision for creating a world-class financial hub. In 2004, when the proposal for an International Financial Services Centre (IFSC) was under consideration, Mumbai faced regulatory challenges, with the Reserve Bank of India rejecting the idea. Meanwhile, Gujarat, with its strong industrial base and support for business initiatives, positioned itself as a more attractive location for such an ambitious project. The Gujarat government offered land at a more favorable rate and introduced favorable incentives, making it easier to create a greenfield financial hub like GIFT City. Additionally, GIFT City was conceived as a self-sustaining, modern urban area, designed to attract global financial firms with its ease of doing business, tax benefits, and infrastructure, a vision that resonated well with the state’s long-term economic goals. This strategic alignment with Gujarat’s broader development agenda, along with its proactive government policies, allowed GIFT City to take off, positioning it as India’s sole greenfield IFSC, while Mumbai’s natural business ecosystem remained hampered by existing regulatory and infrastructural constraints.
Allegation 3: Pressure Through “Helicopter Diplomacy”
TNM alleged that in 2022, a US semiconductor company, initially planning to invest heavily in Chennai, allegedly found itself subjected to unexpected pressure. After a meeting with the Commerce Minister in New Delhi, the company’s officials were allegedly “whisked away” by helicopter to Gujarat, allegedly to convince them to shift their investment to Prime Minister Narendra Modi’s home state. This ‘helicopter diplomacy,’ they claim is just one example of what political leaders from opposition-ruled states have called the Modi government’s heavy-handed tactics to divert investments from other regions to Gujarat. Tamil Nadu Chief Minister MK Stalin claimed that a ₹6,000 crore investment intended for his state was coerced into relocating to Gujarat, while Telangana’s former IT Minister KTR and Karnataka’s IT Minister Priyank Kharge both accused the Union government of pressuring multinational companies to move their projects to Gujarat, citing influence from the Prime Minister’s Office.
What Is The Truth?
Encouraging investors to consider strategic hubs is part of the Central Government’s broader foreign investment outreach. This approach is not exclusive to Gujarat; many states actively market their investment zones and offer unique incentives to attract global companies. The government’s outreach to foreign investors emphasizes India as a whole, with regional hubs offering competitive policies to create an attractive investment environment. Investors’ final decisions largely rest on each state’s readiness and alignment with project needs.
The allegation of “whisking away in a helicopter” is just that – an allegation. The article does not provide proof of these incidents and does not provide proper sources – they state anonymous sources who are either opposition party leaders or some random anonymous person.
It is also not clear which company is exactly in question. Based on news reports, Vedanta-Foxconn signed an MoU in 2022 to invest 1.54 trillion rupees. It was reported that Gujarat pipped Maharashtra to win the deal.
However, while crying foul for TN, TNM did not look at the other deal that was inked with the state. In 2023, TN signed an agreement with Foxconn to build a mobile component manufacturing facility in Kancheepuram with a ₹1,600 crore investment, creating 6,000 jobs.
TNM also doesn’t mention 2 semiconductor companies which moved out of Telangana to TN
Corning International Corporation and Kaynes Semicon both shifted operations from Telangana to other states. Corning moved its Gorilla glass facility to Tamil Nadu in January 2024, while Kaynes relocated its semiconductor unit in March 2024 to Gujarat, despite initial agreements with Telangana. Both companies cited evolving ecosystems and growing opportunities in their new locations.
Allegation 4: Undermining Federal Principles By Favouring BJP-Ruled States
Some opposition leaders assert that the Modi government is systematically favoring BJP-ruled states. They argue that recent PLI-enabled projects, as well as critical infrastructure investments, have disproportionately benefited Gujarat and other BJP-led regions like Uttar Pradesh, sidelining opposition-ruled states.
What Is The Truth?
The allocation of federal projects and investments follows a competitive, structured model in which states are encouraged to create investment-friendly policies. For instance, Karnataka and Telangana, both opposition-led, remain hubs for technology and manufacturing, and they continue to receive high-profile investments. The Modi government has also launched region-specific initiatives like the Northeast Industrial Development Scheme (NEIDS) to bring investment to previously underserved states, underscoring a national approach that includes diverse regions in India’s growth story.
Allegation 5: Tilting Foreign Direct Investment (FDI) Towards Gujarat
Some critics argue that Gujarat receives a disproportionately large share of FDI compared to other states, citing the Modi government’s promotion of Gujarat-based hubs during international visits. They allege that Gujarat’s prominence in FDI flows undermines other states’ attractiveness to global investors.
What Is The Truth?
FDI trends reflect investor confidence, often based on factors like ease of doing business, infrastructure, and local government policies. Gujarat’s readiness to meet these expectations makes it a competitive location, yet it does not dominate FDI inflows across all sectors. States like Tamil Nadu, Maharashtra, and Karnataka remain FDI magnets for industries such as IT, automotive, and finance. The government’s national outreach emphasizes India’s advantages as a whole, with individual states competing based on their respective strengths.
Allegation 6: Regional Economic Imbalance And Impact On Jobs
TNM’s video argues that steering investments disproportionately to Gujarat stunts economic growth and job creation in other regions, with Maharashtra and Tamil Nadu, for instance, missing out on major projects. Critics say that this strategy could deter future investments and diminish states’ economic reputations.
What Is The Truth?
The government’s industrial development model prioritizes regional investment hubs in line with each state’s core strengths. Maharashtra continues to attract significant FDI in sectors like automotive and aerospace, while Tamil Nadu remains a powerhouse in electronics manufacturing. Each state has unique strengths, and the federal government’s role is to foster regional competitiveness rather than enforce a single economic center. The allocation of projects is a balanced endeavor that positions states to leverage their distinct advantages.
TNM very nicely turns a blind eye to the “huge” number of MoUs signed since 2021 by their favourite Chief Minister MK Stalin – be it in Dubai, Japan, Spain, and more recently in the US which promised a big number of jobs. Did they forget the Investor Summit that took place in January 2024?
History
The allegations of favouritism toward Gujarat ignore the context and history of how states attract investments based on governance, incentives, and local policies. When Tata’s Singur plant faced political resistance in West Bengal, Gujarat seized the opportunity to host the project, even though Narendra Modi was merely the state’s Chief Minister and the UPA held power at the centre.
This is a prime example of a state capitalizing on opportunities without federal intervention. Similarly, investors prioritize stable governance, ease of doing business, and competitive policies over political alignment. Gujarat, for instance, established a semiconductor policy in 2022, well before other states like Tamil Nadu introduced theirs, and firms gravitate towards states with consistent policies and incentives.
Moreover, when major companies have withdrawn from Tamil Nadu or Kerala, it has often been due to local opposition or resistance—such as Vedanta’s Sterlite plant being pushed out by protests. In contrast, Taiwan companies and other major firms are currently thriving in Tamil Nadu, demonstrating that each state’s success in attracting or losing investments hinges on local conditions rather than federal nudging.
TNM does not acknowledge that Tamil Nadu has a history of protests which led to shut down of factories like that of Sterlite in Thoothukudi, or the Kudankulam nuclear power plant, and alleged “fire incidents” at Foxlink and Pegatron plants that led to brief operational halts in the past, with Foxlink’s facility lacking functional fire safety equipment. States like Tamil Nadu and Karnataka also have a history of labour unrest at the Wistron and Foxconn plants which has affected production in India in recent years. Take the recent labour unrest at the Samsung Chennai plant, spearheaded by the Centre of Indian Trade Unions (CITU) which turned into a headache for the DMK government.
With such history, why would any straight-thinking corporate house want to invest in such states?
TNM’s video and the article focus on allegations that investments are being systematically redirected to Gujarat and overlook examples that illustrate investments continuing to flow into other states, including those not governed by the BJP. For instance, Corning International Corporation’s decision to relocate its Gorilla Glass manufacturing facility to Tamil Nadu in early 2024 is a significant counterpoint. Initially planned for Telangana, this ₹1,000 crore investment—now in partnership with Bharat Innovative Glass Technologies Private Limited (BIGTECH)—has shifted to Pillaipakkam, Kanchipuram in Tamil Nadu, promising employment to 840 people.
This example undercuts TNM’s propaganda of a one-directional flow of investments exclusively towards Gujarat. Economic diversity across states also reveals that investment flows are far from Gujarat-centric. Tamil Nadu and Karnataka continue to lead in technology and manufacturing sectors, while Telangana’s financial district remains a top destination despite challenges. States attract investments based on competitive factors like manpower availability, infrastructure, incentives, and land policies. FDI flows to multiple regions are driven by local advantages, not central government biases, as shown by the investments signed under Tamil Nadu’s industrial policies and the investments streaming into Karnataka. This pattern suggests that investor decisions are driven by a combination of state policies, stability, and infrastructure readiness, not political favoritism.
Additionally, it is more profitable to establish an industry away from the south as per the below infographic.
Setting up an #industry is least profitable in the South states due to scarce availability of raw materials, ores, coal to generate power/buy power. For 70 years we have done blunders after blunders. #TamilNadu is the least #profitable large state in India. #Factory #industrial pic.twitter.com/ccAV0L3kUp
— A Prakash (@nandighosha) November 6, 2024
Strategic Investment Or Favoritism?
The debate surrounding Gujarat’s role in India’s investment landscape highlights the complexities of a competitive economic model. While Gujarat’s success may appear to favour a single state, a closer analysis shows that the Modi government’s investment strategy is shaped by criteria-based incentives and nationwide competitiveness. States with established infrastructures, investor-friendly policies, and industrial ecosystems continue to thrive, regardless of political alignment.
This balanced approach strengthens India’s federal structure by encouraging states to create favorable conditions for investment, ensuring that India’s economic growth is inclusive and sustainable. In a global economy where investors seek predictability and efficiency, India’s regional hubs provide a varied and robust investment landscape that supports a diversified, balanced growth trajectory.
The News Minute’s piece is not an exposé—it’s a desperate and poorly executed smear campaign. By relying on unverified sources, politically motivated narratives, and hollow allegations, TNM has just shown that it is ‘The Wire’ of the south employed for partisan propaganda.
The Commune could just as easily assert that The News Minute’s entire hit job was commissioned by a prominent Opposition party—but unlike TNM, we value evidence over conjecture. Wild accusations and whispered narratives from “friendly politicians” or shadowy “anonymous sources” don’t constitute proof. If TNM wants to be taken seriously (not many do), it must rise above the gutter of partisan spin and present verifiable facts. Until then, this remains nothing more than a paid narrative masquerading as journalism.
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