Once the cradle of Dravidian culture, today Tamil Nadu is the most urbanized state in India. A leader in auto parts and components, readymade garments and leather and leather goods, Tamil Nadu also accounts for the largest number of Micro, Small and Medium Enterprises (MSMEs) in the country with 6.89 L registered MSMEs, producing over 8,000 varieties of products for a total investment of more than Rs.32,008 Cr.


Manufacturing & Engineering Industry


Leather and tannery Industry

Automobile industry

Paper Industry

Chemical & Plastic Industry


Renewable Energy, Tourism

New Entrepreneur Cum Enterprise Development Scheme (NEEDS)

    1. To provide educated youth entrepreneurship training to make them as entrepreneur.
    2. To assist them in project preparation and in getting financial assistance with 25% subsidy and 3% interest subvention.
    3. To provide them with a reservation of 25% in allotment of plots / sheds in SIDCO estates subject to availability.
    4. The state has also doubled the funding given to NEED to INR 100 crore which will be utilised for capital subsidy of 25 per cent and training support.

Entrepreneur Development Scheme

  • Aim: Encouraging entrepreneurship amongst persons from economically and socially disadvantaged backgrounds who wish to promote their own enterprise, to generate income and to lead a life of dignity.
    Loan assistance: From Rs.50,000/ to Rs.5.00 lakhs (or 30 times on the net salary of the two guarantors put together, whichever is lower)

Unemployed Youth Employment Generation Programme (UYEGP):

  • This scheme entails financial support for economically viable manufacturing, service and business activities excluding agricultural activities. Under this scheme, loans up to Rs 5 lakh can be availed of by the manufacturing sector, up to Rs. 3 lakh by the services sector and up to Rs 1 lakh by the business sector from nationalized banks, private banks and Tamil Nadu Industrial Cooperative Bank. No collateral security is needed to procure these loans.

Incentive schemes: The state government has formulated some incentive schemes to boost the MSME sector. Some of them include:

  • Capital subsidy at the rate of 15% on the value of plant and machinery subject to maximum of Rs.3.75 lakh for all micro manufacturing enterprises
    Low Tension Power Tariff Subsidy at a flat rate of 20% for the first
    three years from the date of commencement of production or from the date of power connection, whichever is later
  • A 100% subsidy on the net Value Added Tax paid by micro manufacturing enterprises for the first six years from the date of commencement of production, up to the value of the investments made in plant and machinery

The Center for Entrepreneurship Development (CED): Established an IT Incubation Center where 80 IT entrepreneurs can be supported at a time.

IITM incubation cell

Entrepreneurship Development Institute- Tamil Nadu: Entrepreneurship Development Institute (EDI), Chennai is an apex organization in the field of entrepreneurship education and self-employment promotion in the state of Tamil Nadu.

In summary – Tamil Nadu and Entrepreneurship:

As the engine of economic growth and for promoting equitable development, the Micro, Small and Medium Enterprises play a pivotal role in the overall industrial economy of the state. With the government almost doubling its efforts to boost free enterprise in the state, the outcome now depends heavily on the implementation and the ability of aspiring entrepreneurs to adopt this support.

To know more about how Tamil Nadu is building a vibrant entrepreneurship ecosystem, click here.

Data Sources for Tamil Nadu: 

Note: Policy details provided here are for the purpose of information only. Please verify the latest information from the relevant Government or MSME website of the state. Other data and information is curated from various websites and public documents. In case you have any corrections, additions, or suggestions, please share the same with us, and we’ll be happy to incorporate them here.