From Our Correspondent
Sparks political row in Chennai
Vijayawada/Chennai: South Korean footwear maker Hwaseung, which had earlier signed a memorandum of understanding with the Tamil Nadu government, has formally committed to a greenfield manufacturing project in Andhra Pradesh — a move that has touched off sharp political criticism in Tamil Nadu and renewed debate over states’ investment strategies.
Andhra Pradesh’s State Investment Promotion Board has cleared Hwaseung’s proposal for a non-leather sports-footwear facility on a 100-acre site in Pogurupalle, Gudupalle mandal near Kuppam. The investment, reported at about ₹898 crore (roughly $150 million) and to be executed in three phases, is expected to create more than 17,000 direct jobs when fully ramped up. The state has offered a tailored incentive package including a 30% investment subsidy (capped), stamp-duty exemptions, power-tariff support and other concessions to fast-track the project.
Hwaseung had earlier signed an MoU with the Tamil Nadu government — plans that Tamil Nadu officials and the company described only months ago as the first step toward a plant in Tuticorin. But at a Confederation of Indian Industry event in Visakhapatnam this week, the company signed a fresh commitment with Andhra Pradesh and said it had chosen Kuppam after “a long review” of options.
The switch has triggered a political backlash in Chennai. Opposition leaders from AIADMK and the BJP accused the ruling DMK of letting a major investment and thousands of jobs slip away, characterising the development as evidence of poor industrial planning and weak governance. AIADMK leader Edappadi K. Palaniswami used the episode to argue that Tamil Nadu has become “a land of missed chances.” BJP state leaders made similar allegations, saying administrative inefficiency drove the investor away.
Tamil Nadu’s industries minister, T.R.B. Rajaa, rejected the charge that the state had lost the project because of policy failure or mismanagement. He said the decision reflected practical differences in land availability and that Tamil Nadu would not “join a race to the bottom” by offering unsustainable concessions. State officials pointed out that established industrial states often cannot match headline-grabbing land or subsidy offers made by less industrialised competitors.
Andhra Pradesh’s switch of fortunes underscores a broader competition among states to attract global manufacturing. Andhra’s government has been aggressively courting investors with land allotments, fiscal incentives and promises of rapid clearances — an approach that has paid off in a string of recent commitments but also raised questions about long-term fiscal cost and industrial policy coherence. Analysts say companies weigh land, logistics, labour, incentives and ease of doing business; while incentives matter, availability of contiguous land and a clear timeline for approvals frequently determine the final choice.
For Hwaseung, the immediate priority appears to be scale and exports. Company statements highlight plans to supply global brands and to expand production in phases; Andhra officials say the project will fit into the state’s push to build manufacturing hubs in Rayalaseema. For Tamil Nadu, the loss — real or perceived — has become political ammunition ahead of future state-level contests, with opposition parties demanding a detailed explanation from the government on what went wrong.