What are the key differences between the growth models of Gujarat and Tamil Nadu?

Gujarat's model focuses on rapid industrialization and megaprojects, leading to high GDP growth but also high poverty levels. In contrast, Tamil Nadu has balanced economic and social development, investing in human capital and ensuring the benefits of growth are more widely shared.

How has Tamil Nadu's electronics manufacturing sector performed?

Tamil Nadu exported around $15 billion worth of electronics last year, about 40% of India's total. This growth has been driven in part by Apple's decision to increase the number of devices it manufactures in the state.

What factors have contributed to Tamil Nadu's success in providing a skilled workforce?

Over 80% of Tamil Nadu's youngsters stay in school for the maximum period, and around half of young adults go on to college or university. The state also has a well-developed public healthcare system, with more doctors and hospital beds than Gujarat.

Home / Business and Economy / Gujarat vs. Tamil Nadu: India's Divergent Growth Models Revealed

Gujarat vs. Tamil Nadu: India's Divergent Growth Models Revealed

13 Nov, 2025

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Summary

Gujarat's rapid industrialization vs. Tamil Nadu's focus on human capital
Gujarat's high GDP growth but high poverty, Tamil Nadu's balanced approach
Tamil Nadu's success in electronics manufacturing and skilled workforce

In 2025, India's Prime Minister Narendra Modi has set a goal for the country to gain "rich-country" status by 2047, the centenary of its independence. To achieve this, India's economy would need to expand by around 8% annually, up from the 6% average over the past 25 years. Two states, Gujarat and Tamil Nadu, are held up as exemplars of India's growth potential.

Gujarat, a heavily industrialized western state, has seen its economy grow by around 8% annually over the past decade. It is home to 5% of India's population but produces more than 8% of the country's GDP and accounts for over a quarter of exports. However, this rapid industrialization has come at a cost, with nearly 12% of Gujaratis living in "multidimensional poverty," five times more than in Tamil Nadu.

In contrast, Tamil Nadu in the southeast has been growing by double digits, making it India's top performer last year. The state's success is largely driven by the growth of electronics manufacturing, particularly Apple's increased production in India. Tamil Nadu also excels in providing a well-educated and healthy workforce, with over 80% of its youngsters staying in school and around half going on to college or university.