Before Chennai became a city of multinational firms, Global Capability Centres, semiconductor ambitions, aerospace and defence majors, automobile giants, footwear factories, startups and home grown firms, it was Madras — a city whose business story was already taking shape several centuries ago. From a colonial trading centre to a manufacturing hub and now a diversified global business destination, the city has repeatedly reinvented itself.
Business really mattered to Madras. The industrial development of the Madras Presidency was a matter of serious concern and in 1899, a whole time officer (later Sir) Alfred Chatterton who was then with the College of Engineering, Guindy, was appointed to stimulate industrial technical education in the region, according to details documented in a coffee table book titled Championing Enterprise – 175 years of the Madras Chamber of Commerce and Industry. The government decided to create a department to survey existing industries and investigate the possibility of creating new ones, it said.
“Trade came first. From Fort St. George in 1639, Madras shipped rather than made — cotton piece goods, indigo, hides. The artificial harbour of the 1880s turned an open roadstead into a working port, and that decision still explains where our industry sits. Then factories. Binny’s Buckingham Mill in 1876 and the Carnatic Mill in 1881 employed tens of thousands at Perambur. Parry moved from trading into sugar and chemicals. Simpson began coach building in 1840,” said Deepak Jacob, Managing Director and CEO of Guidance the nodal agency instrumental in bringing investments into Tamil Nadu.
“Trade built the port. The port brought the mills. The mills and the PSUs built the engineering base. That base brought the automakers, and the automakers brought electronics. What we build now is not for the investor in front of us. It is for the one who arrives in 2045,” he added.
Long before Chennai became known as the Detroit of India, Madras was already laying the foundations for the automotive sector. The first car to arrive in Madras was in the early 1900s. Simpson’s, the city’s famed coach builders then, played a role in this. In 1948, Madras had become home to automotive pioneers such as Standard Motor Products of India and Ashok Leyland (Ashok Motors), while Enfield India began two-wheeler manufacturing in 1956. Today, Chennai is home to several leading automobile companies, including TVS Motor Company.
A view of Simpson Bus Stop on Anna Salai on July 06, 1987.
| Photo Credit:
The Hindu Archives
Chennai has also embraced the electric-vehicle revolution, with several companies entering the EV space and adding a new dimension to the city’s automotive story.
Tractors and Farm Equipment Ltd (TAFE), headquartered in Chennai, is another interesting chapter in the city’s business story. India’s second largest tractor manufacturer, TAFE is led by Mallika Srinivasan, one of the few prominent women business leaders in the city, who has significantly expanded the company through strategic acquisitions and expansions across geographies.
The Madras Rubber Factory, known as MRF, began its journey in Madras as a small toy-balloon manufacturer and went on to become one of India’s largest tyre makers. Business conglomerates such as Murugappa Group, Sanmar Group, India Cements were all headquartered in Madras and expanding their businesses. Banks, too, joined the race. Indian Bank began its journey in Madras in 1907, followed by Indian Overseas Bank (IOB) in 1937. “Madras built its banks before its factory base, which was part of why services took root here so easily later,” Mr. Jacob said.
A view of the Madras Rubber Factory Limited on December 04, 1962.
| Photo Credit:
The Hindu Archives
In 1958, Madras opened the Guindy Industrial Estate, one of India’s first industrial estates alongside Delhi’s Okhla. And the first phase was inaugurated by Prime Minister Jawaharlal Nehru.
Then came the IT revolution and the multinationals. “While much of the growth was led by home-grown companies, the participation of multinationals was largely through joint ventures and other forms of partnerships. It was only in the post liberalisation era that multinationals made a beeline for Chennai,” Ramkumar Ramamoorthy, Partner, Catalincs and former CMD, Cognizant India.
“Some of the biggest names in global business such as Ford, Cognizant, St. Gobain, and Hyundai made Chennai their home. This was followed by a flurry of investments by companies from across the globe. Examples include Caterpillar, Standard Chartered, Grundfos, Danfoss, Yamaha, Renault-Nissan, IBM, Accenture, BMW, World Bank, and Cap Gemini,” he added.
In the last two decades, Chennai has added a new chapter to its business story — startups. Once known primarily for factories, automobiles, and manufacturing, the city is now know as the SaaS (Software as a Service) hub. Chennai now has 5,134 startups, according to StartupTN. The IIT-Madras ecosystem has created a new generation of entrepreneurs, while the IIT-Madras Research Park has become a hotbed for innovation, deep tech and ideas moving from the lab to the market.
IIT-Madras Incubation Cell (IITMIC) began in 2013, at a time when “deep tech” was not a popular word, its Chief Executive Officer Tamaswati Ghosh said. She narrated that in the early days they were questioned how startups were staying with them. The answer came in the form of companies such as Ather Energy, which, despite eventually moving to Karnataka, became one of the early poster boys of Chennai’s startup ecosystem. Uniphore showed that founders need not be from Chennai to build here; its founders adopted the city and built the company from here, she pointed out.
Then came Agnikul, putting Chennai on the map for space tech innovation. In the past decade, Chennai has attracted several Global Capability Centers (GCCs). According to estimates, the city has over 300 GCCs. Logistics firms like Hapag Lloyd and United Parcel Service have chosen Chennai.
A view of the Agnikul facility in Chennai.
| Photo Credit:
BIJOY GHOSH
The least discussed of the new sectors is animation, VFX, and gaming. Phantom FX, Basilic Fly, Knack Studios, and BOT VFX are already here, hiring on a diploma rather than a doctorate. The AVGC-XR Policy 2026 targets two lakh jobs by 2030.
Chennai in 2030
“With Chennai having emerged as the data science hub of India with prominent pure-play analytics companies such as Latentview, Tiger, Tredence, Fractal, Crayon Data, and MathCo establishing their operations in the city, I expect significant AI innovation to happen from the city at the intersection of multiple domains and data analytics,” Mr. Ramamoorthy said.
He then added that while existing industries will continue to grow and thrive, the biggest drivers of growth and employment will come from GCCs, NBFCs, electronics, defence manufacturing, renewable energy, tourism (including medical tourism), and from MSMEs and new-age startups in areas such as fintech, healthtech, deeptech, spacetech, among others. “We will see companies in these new age sectors make significant investments in R&D and intellectual property, which should augur well for the state in improving its per capita income,” he noted.
“The base stays. In 2030 Chennai is still an automotive, electronics, and services city, and GCCs remain its highest-wage employer. What changes is where Chennai sits in the value chain. Today the design decision, the IP and the margin often sit elsewhere while we do the making. Closing that gap is the work,” Mr. Jacob added. Madras laid the foundation and Chennai is building what comes next.
