A semiconductor company from the US was keen on investing a large amount of money in Tamil Nadu capital Chennai, back in 2022. The company’s officials were in New Delhi to meet with the Commerce Minister to discuss their intentions — and when they stepped out of that meeting, there was a surprise waiting for them. A helicopter was all set to whisk them away to Gujarat, before they could finalise their investment in Chennai. “They wanted to waste no time to convince them to shift their project to Prime Minister Narendra Modi’s home state, Gujarat,” a source close to a Tamil Nadu minister tells TNM.

This ‘helicopter diplomacy’ — straight out of a masala movie — is just one instance of the Modi government’s boorish methods for diverting investments from other states to Gujarat. Political leaders, particularly from opposition-ruled states, have raised concerns about this repeatedly. Ahead of the 2024 Lok Sabha elections, Tamil Nadu Chief Minister MK Stalin alleged that a Rs 6,000 crore investment intended for his state was coerced into moving to Gujarat. Similarly, former Telangana IT Minister KTR accused the Union government of “arm-twisting” multinational companies into relocating to Gujarat, while Karnataka's IT Minister Priyank Kharge claimed that companies faced pressure from the Prime Minister's Office to divert their investments.

Ahead of the Assembly elections in Maharashtra, leaders from the Maha Vikas Aghadi (MVA) have intensified their accusations against the BJP-led Union government, claiming it has deliberately diverted major projects — such as the recently inaugurated Tata-Airbus facility in Vadodara — away from Maharashtra. 

Is there truth to these allegations? And if there is, what’s the modus-operandi? TNM had in-depth conversations with ministers, bureaucrats, and company officials across four states — Maharashtra, Tamil Nadu, Telangana, and Karnataka — as well as officials from the Union government and Gujarat to find out more. 

We identified four strategies frequently employed: substantial capital subsidies from the Union government; commitments to reduce import duties; assurances of government orders for manufacturing; and aggressive promotion of Dholera and GIFT City as investment destinations by Union government representatives. There are also many instances of the Union government unilaterally deciding to grant big-ticket state-run projects to Gujarat, casting aside the proposals of other states. 

Since Narendra Modi became the Prime Minister, there has been sharp scrutiny for what many perceive as a lopsided favour for his home state of Gujarat. Strategic relocation of high-profile events like India’s flagship military exhibition DefExpo, it seems that Gujarat is often in the spotlight while other states feel left in the shadows. 

The Micron story 

In June 2023, US-based Micron Technology announced plans to invest USD 825 million (about Rs 6,770 crore) in a semiconductor assembly and testing facility near Ahmedabad in Sanand-GIDC (Gujarat Industrial Development Corporation). This was during Prime Minister Modi’s visit to the US, where he seems to have pushed Gujarat as an investment destination. According to sources, Micron had been scouting locations in the country to set up its semiconductor assembly unit and was keen on two other states — Tamil Nadu and Telangana — but finally, they landed in Gujarat.