MAS Holdings, one of Sri Lanka’s leading apparel export companies founded by the Amalean family, has reportedly invested nearly US$93 million in South India’s Tamil Nadu state while scaling back some of its manufacturing operations in Sri Lanka, according to foreign media reports.

According to a ‘Reuters’ report published on Aug. 2026, the Tamil Nadu state had signed agreements worth 150.5 billion rupees ($1.58 billion) during the month for 16 new ‌projects by overseas investors, as a part of a broader investment push.

The report adds that the TN government had signed 97 agreements worth 674.52 billion rupees across sectors, creating more than 100,000 jobs.Among the investors are MAS Holdings, which is said to invest INR 8.8 billion.

According to reports, the project is expected to create around 7,000 jobs.The investment is also reportedly planned to be expanded across several districts in the South Indian state.

The change at Methliya…

Meanwhile, in February 2026, MAS decided to halt apparel manufacturing operations at its ‘Methliya’ factory in Thulhiriya and use the facility for textile manufacturing activities, including knitting, fabric dyeing and finishing.The decision affected around 2,200 employees working there. However, the company had said that the employees were given opportunities to transfer to other MAS factories in Sri Lanka or to MAS operations in Jordan.The head of the Sri Lanka Export Development Board (EDB) had later clarified that this was not a complete closure of the factory, but a restructuring in which apparel manufacturing was being transferred to other MAS factories while textile production at Methliya was being expanded.

Accordingly, reasonable grounds emerged to substantiate our report titled “26,000 jobs at MAS at risk; two more factories to close soon”.

A shift in factory operations

In March 2026, MAS decided to relocate manufacturing operations of the Thurulie facility to nearby facilities.

The company said that technical assessments had indicated that the long-term viability of the facility has been affected by severe damage caused to the plant by Cyclone Ditwah in late 2025. They added that assessments had also indicated a high risk of flood recurrence due to the low-lying nature of the property and its proximity to surrounding water bodies.It was further reported that employees were encouraged to continue their employment within MAS’ other manufacturing plants. After 500 team members had taken up temporary placements at nearby facilities in the aftermath of the cyclone, MAS had reportedly worked closely with the remaining 1,600 employees to explore the full range of transfer options, offering employees a 3-month salary incentive for relocation.

Why India?

According to economic experts, what can be observed in relation to MAS operations in Sri Lanka, is not simply a straightforward process of “factory closures” taking place all at once. Instead, it is rather a shift in direction involving the restructuring of production capacity in line with global demand, production efficiency, climate risks and supply-chain considerations. Experts say the more important question for Sri Lanka isn’t to judge the legitimacy of the MAS Holdings’ investment in India, but to realize what domestic factors had ultimately led to this commercial decision.They say the most serious issue is how much of the investment that could have been secured by Sri Lanka has flowed to India, and why.

Tamil Nadu has now become one of India’s leading industrial states. As the ‘Reuters’ article points out, its capital – Chennai is a major manufacturing hub and often called the ‘Detroit of India’.It has large apparel and textile supply chains, ports and transport facilities, industrial infrastructure and a huge labour force.The Tamil Nadu government has also taken steps to speed up the process of providing approvals, licenses and no-objection certificates (NOCs) to attract investors. The state government has also announced a program under which certain approvals can be issued within 21 days.

Is Sri Lanka’s investment environment the true culprit?

MAS Holdings is currently Sri Lanka’s largest exporter. According to the company’s 2025 Impact Report, it had around 97,989 employees at the end of 2025, of whom 73,034, or 74.5%, were employed in Sri Lanka.These figures make it clear that MAS remains one of the largest industrial employers and job creators in Sri Lanka.However, experts also emphasize that policymakers in Sri Lanka should not overlook the fact that even such a company is planning to invest a million dollar manufacturing operation in India while gradually scaling back in its local manufacturing capacity.