Race to the bottom

States should avoid special investment deals with one group

The Kitex group, which is a major manufacturer of garments for the global market, has created waves recently thanks to its decision to move out of its state of origin, Kerala. It has been announced that a new Rs 1,000-crore project is to be set up at a “mega textiles park” in Warangal in the state of Telangana. This has caused much comment and debate about the relative ease of doing business in Kerala and Telangana, not to mention the other southern states that were also in the running for investment from Kitex. Some of this discussion is relatively underinformed.