Tamil Nadu   

"Tier II cities attractive with cheaper labour"

Staff Reporter

Improved infrastructure will help them compete with metros, says U.S. Consul

PHOTO: S. JAMES

EXPLORING POTENTIAL: David T. Hopper, United States Consul-General, at an interaction with members of the Tamil Nadu Chamber of Commerce and Industry in Madurai on Tuesday.

MADURAI: Cheaper labour and real estate costs and reduced staff attrition rates will make companies prefer tier II cities in the State to the metropolitan cities in the country, United States Consul-General David T. Hopper has said.

At an interactive session on the US-India business growth potential in tier II cities, organised by the Tamil Nadu Chamber of Commerce and Industry, he said the "continuing" cost pressures characterising the countries metropolitan cities were forcing more companies to look at tier II cities. Increased administrative focus on the tier II cities would improve infrastructure and help them compete effectively with bigger cities. However, smaller labour pools in the tier II cities posed a risk. Furthermore, the higher comfort level in the tier I cities would prevail for some time for the firms entering the country for the first time, he said

Stop migration

Though the southern districts were producing a large number of engineering graduates, most were migrating to metropolitan cities for jobs. "Providing them jobs in Madurai was the best way to bring overall development to the region," Mr. Hopper said.

Efforts to make the graduates "industry-ready" were lacking; such efforts would improve their employability, he said.

Information technology and telecom that threw their doors open to global business had grew exponentially post-liberalisation. Similarly, India should replicate the success in other sectors, including retail, infrastructure, education and agro-industries.

Chamber president S. Rethinavelu said the business ties between the U.S. and India had grown to $26.76 billion from $5.6 billion in the last 15 years.

Over 65,000 engineering graduates were passing out every year from the southern districts.

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