Tamil Nadu continues to be a major hub for special economic zones (SEZs), with the highest number of operational zones in India and the second-largest SEZ employment base. However, its lead in exports is narrowing as Gujarat and Karnataka pull further ahead.Of the 277 operational SEZs in the country as of July 31, 2026, TN had the highest number at 49, followed by Karnataka and Telangana with 38 each and Maharashtra with 36.SEZs in India are purpose-built industrial zones offering sector-based clusters and policy support to businesses serving domestic and global markets. They provide incentives such as tax and duty exemptions, single-window clearances and relaxed land-use norms to reduce costs and ease operations.These SEZs function as integrated industrial systems rather than isolated enclaves, giving investors scale, policy certainty and multi-sector optionality within a single state jurisdiction.TN’s SEZs employed 6.27 lakh people in FY26, second only to Maharashtra’s 6.52 lakh. Telangana, Karnataka and Uttar Pradesh followed with 5.27 lakh, 4.67 lakh and 2.56 lakh jobs, respectively.Employment in TN’s SEZs has grown nearly 20% from 5.24 lakh in FY22, broadly matching the 21% growth in SEZ employment nationally, from 26.96 lakh to 32.61 lakh during the period. However, employment fell from a record 7.28 lakh in FY25 to 6.27 lakh in FY26, after rising from 5.24 lakh in FY22 to 5.92 lakh in FY24. Total exports from SEZs in the country grew from `9,90,447 crore in FY22 to `16,36,192 crore in FY26.TN’s SEZ exports increased from `1,36,329 crore in FY22 to `2,12,288 crore in FY26, an increase of nearly 56%. This growth has helped the state stay in the top tier of SEZ exporters, but the state’s growth has lagged that of the leading exporters. Gujarat’s SEZ exports jumped 70% to `4,05,595 crore during the period, nearly twice Tamil Nadu’s. Karnataka’s exports rose 60.8% to `2,69,004 crore, while Maharashtra’s increased 52.1% to `2,43,423 crore.TN’s export growth was uneven, rising 26.6% in FY23, slowing to 3.1% in FY24, before recovering to 14.3% in FY25 and 4.4% in FY26. The state’s diversified industrial base, spanning engineering, automobiles and components, electronics, IT/ITES and manufacturing, continues to support its large employment base. But the widening export gap with Gujarat and Karnataka highlights the need to attract fresh investments and increase the export intensity of its SEZs.State Industries Promotion Corporation of Tamil Nadu Ltd (SIPCOT), which is engaged in developing and managing industrial parks as well as providing other industrial infrastructure, has created 8 SEZs to drive industrial growth and exports. It is also developing a multi-product SEZ at Panapakkam in Kancheepuram district for general manufacturing and non-leather footwear.SEZs support a sector-agnostic industrial architecture spanning engineering, automotive manufacturing, pharmaceuticals, textiles, IT/ITES, and free trade & warehousing zones, allowing investors to locate manufacturing, services and logistics operations within a single state ecosystem, says Guidance Tamil Nadu, the state investment promotion agency.Industry representatives said recent policy initiatives and growing interest in high-end electronics and other sectors, such as non-leather footwear, could help boost exports in the coming years. For Tamil Nadu, the challenge is to translate its large SEZ network and employment base into faster export growth and more job creation.
