Andhra Pradesh goes all out to woo investors ahead of investment summit

A fast-track mechanism that ensures all industry approvals within 21 days; a single-window that brings together 96 services of 24 government departments in one place; and handholding the corporate sector through its investment journey. As it prepares to roll out the red carpet for investors from across the world for the Andhra Pradesh Global Investment Summit (GIS) 2023, these are some of the ease-of-business advantages the state is listing.

From the summit, to be held on March 3 and 4, Andhra Pradesh expects to attract investments of around Rs 1.8 trillion.

Another positive that is being played up is Andhra Pradesh’s double-digit gross state domestic product (GSDP) growth rate, which in 2021-22 was the country’s highest — 11.43 per cent. The state is also set to launch its new industry policy ahead of the summit. A semiconductor policy and a robotics policy are also in the pipeline.  

“In the last three investment summits, not considering the memoranda of understanding (MoUs) but actual investment on the ground, the state has seen investments of around Rs 1.8 trillion. We are starting with that as the target and then sky is the limit. We don’t want to keep the proposals only at the MoU level,” Buggana Rajendranath, finance minister of Andhra Pradesh, told Business Standard.

Going forward, the key focus areas will be green energy, electronics and information technology, bulk drugs and pharmaceuticals, automobiles and electric vehicles, besides innovation and start-ups.

Post bifurcation, Andhra Pradesh has grown to script a success story. Till 2014, when Telangana and Andhra Pradesh emerged as two separate states, Andhra had only seen 685 large and mega units with an investment of Rs 1.32 trillion, and which generated 257,274 jobs.

However, post that, 326 large and mega units were set up with an investment of  Rs 1.17 trillion, creating 218,144 jobs.

Further, 88 projects are under active implementation with a total investment of Rs 2.35 trillion and the potential to create 236,806 jobs. The state is also ranked number one in the Ease of Doing Business ranking by the government of India, which is based on stakeholder feedback.

“In the new industrial policy, we will showcase some sunrise sectors. It is going to be an umbrella kind of a policy,” said Srijana Gummalla, director of industries in the state. “Currently, we have around 18 policies, which will all be subsumed into one. While it will have generic components like capital subsidy and interest subsidies, there will be specifics for the sunrise sectors such as green hydrogen, emerging technology, and so on.”

Gummalla is among the officials spearheading the roadshows in cities like Bengaluru, Chennai and Mumbai to woo investors.

Government sources say a large share of investments post bifurcation came after Y S Jagan Mohan Reddy took charge as chief minister in June 2019. From June 2019 to January 2023, 111 large industries have been set up in the state with investments of around  Rs 56,534.53 crore, which created 73,286 jobs.

During the same period, in the micro, small and medium enterprises (MSME) segment, 152,558 units were set up, with an investment of Rs 19,115 crore, generating more than 1.3 million jobs. The sectors that have attracted major investments in the last three years are auto components (Rs 23,071 crore), chemicals and petrochemicals (Rs 5,251 crore), bulk drugs and pharmaceuticals (Rs 2,790 crore), engineering and wood-based products (Rs 1,956 crore) and textiles (Rs 1,766 crore).

“We are the only state with three industrial corridors (Vizag-Chennai, Bengaluru-Chennai and Hyderabad-Bengaluru),” said Rajendranath.

We have close to 50,000 acres of land in the form of industrial estates, where world-class infrastructure is available and is very well connected to ports.”

The state government is also pitching Andhra Pradesh as India’s gateway to Southeast Asia, owing to its maritime infrastructure: 974 km of coastline, which is the second longest in the country; six existing and four upcoming ports.

Asked about the criticism that the state has not been able to attract enough foreign direct investment (FDI), Rajendranath said, “When you promote new business and enhance existing businesses, automatically there is the chance of FDI coming in. People want IT and related businesses to be set up in India. It [FDI] will come in as part of that.”

Between October 2019 and September 2022, the state has attracted FDI of around $518 million, according to the commerce ministry’s data.

For small industries, too, Andhra Pradesh says it has several sops in store.

“We believe that MSMEs are the backbone of big companies. Around 40 per cent of our exports come from MSMEs,” said Vanka Ravindranath, chairman of the Andhra Pradesh MSME Development Corporation. “We are providing several incentives, including uninterrupted and cheap power to the sector.”