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Information technology

•Steady growth in exports, recording a 24.5 per cent growth against the national average of 20.65 per cent in 2008-09.

•Total exports are pegged at US$ 5.06 billion in 2008-09 against US$ 5.6 billion in 2007-09.

•Number of IT and ITeS companies registered under Software Technology Park (STP) scheme has grown to 69 including 9 foreign companies.

•The state attracted investments to the tune of US$ 110 million of which investments from foreign companies are between US$ 2-3 million as on July, 2009.

•Total investments under the SEZ scheme are to the tune of US$ 800 million as on July 2009.

•The total employment generated by the IT sector in 2008-09 has grown by 12,768 (STP and SEZ units).

•Total employment generated by IT and ITeS industry in the state has increased from 239,000 in 2007-08 to 251,786 in 2008-09.

Source: Export Performance of IT/ITES Industry for the year 2008-09-press note, STPI website, www.hyd.stpi.in

 

Pharmaceuticals and biotechnology

•Hyderabad is the hub of the bulk drugs industry, accounting for one-third of the production of bulk drugs nationally.

•State produces a majority of 500 basic drugs produced in the country.

•The market size of the sector in AP in 2008-09 stood at US$ 475 million and accounted for 18 per cent of the total Indian Biotech industry.

•The industry accounts for 43 per cent of the total biotech revenue generated by companies in South India (US$ 1104 million).

•The state was expected to attract US$ 43.25 million worth of new investments in the year 2008.

•The top two companies in AP (Nuziveedu and India Immu) accounted for around 27 per cent of the total Indian biotech revenues for 2007-08.

•The state witnessed an investment of US$ 220 million since 2002.

•The state‘s capital will soon be home to two premier institutes—Centre for Stem Cells Research and National Animal Resource Facility for Biomedical Research

•The first phase of the project entails an investment of US$ 60.9 million

•The state will also have a biotechnology incubation centre, a first of its kind in India

•As a joint initiative of the Government of Andhra Pradesh and the Government of India, the Centre has come up with an investment of US$ 7 million.

•NCS Group is coming up with Botanical Gardens project by March 2009. The project is coming up in the forest reserve land at Kondapur and is being executed in PPP with the Andhra Pradesh Forest Development Corporation.

•In Phase I, the garden would be developed in 18 sectors spread over 120 acres. It would have about 5,000 species of plants, including several varieties sourced from botanical gardens across the world.

•Of the proposed cost, the promoters' contribution would be 40 per cent from internal accruals.

Source: ―Seventh Industry Survey,‖ ABLE website, www.ableindia.org, "Economy and Industry monitor: Andhra Pradesh -February 2009", Cygnus

Apparel and textiles

•The state is a leading producer of cotton, with an annual average production base of about 227 million bales in 2008-09 —an increase of 8.6 per cent over 2007-08.

•Medium grade and superior long staple varieties of cotton are predominant in the state

•There are over 80 spinning mills including a number of 100 per cent export-oriented units with state-of-the-art machinery, producing cotton, synthetic and blended yarns. There are 1,079 weaving units with a production capacity of 789 million metresof fabric per annum.

•The state has, moreover, emerged as a large textile processing centre. Over 100 units are set up in the state with a processing capacity of 13 million metresof cloth per annum.

•The number of power looms in the state aggregates to around 44,000 employing approximately 1,10,000 workers

•Apparels, fabrics and furnishings have been identified as growth potential products by the state. It aims to achieve US$ 6 billion in total textile exports, and US$ 2 billion in handloom exports per annum by 2010.

•The state aims to increase its domestic contributions for apparels and textile products to US$ 4.87 billion. The domestic sales of the state are expected to be around US$ 3 billion per annum by 2010.

•The state aims to generate an additional employment to 1.5 million people in this sector by 2010.

Source:Economy and Industry monitor: Andhra Pradesh -August 2009, Cygnus

Food and agro-processing sector

•The agricultural sector in the state witnessed a growth of 7.5 per cent over the last five years and the total crop area increased to 12.2 million hectares by 2008-09.

•A variety of agro-climatic conditions in the state make it conducive for growing a variety of horticulture crops such as fruits, vegetables, spices, tuber crops, plantation crops and floriculture.

•The state is the largest producer of rice in India. It is a leading producer of cash crops such as tobacco, groundnut, dry chilly, turmeric, oilseeds, cotton, sugar and jute.

•It is the second-largest producer of horticulture products in India; production is expected to reach 22.90 million tonnes by 2020.

•The state produces some of the finest varieties of mangoes, grapes, guavas, papayas and bananas.

•It is the number one producer of sweet lime, lime, papaya, chilly, turmeric and palm oil.

•It is the second largest producer of tomato and coriander, third for pomegranate, fourth for tapioca, lady finger and grapes, and fifth for onions.

•To achieve the growth envisaged for the agricultural sector, the state aims to attract investments of around US$ 17.07 billion by 2010, with the total investment until 2020 targetted at around US$ 39.02 billion.

Agriculture and allied industry

Forestry

•According to data for 2007-08, the state has 6.21 million hectares of forest area which accounts for 22.6 per cent of the total geographical area of the state.

•The contribution of forestry to the GDP of the state in 2006-07 was estimated at US$ 412 million, a seven per cent increase over 2005-06 (in dollar terms).

Fisheries

•Ranks first among Indian states in brackish water shrimp production and fresh water prawn production. It stands second in fresh water fish production and, in addition, is fifth in marine fish production.

•The overall fish production in the state is estimated to touch 1.4 million tonnes during 2008-09 as against 1.3 million tonnes in West Bengal making AP highest producer of fish in the country.

•In addition to fresh water fish, the state will be harvesting 260,000 tonnes of marine fish and 40,000 tonnes of brackish water shrimp. Andhra is already the top producer of brackish water shrimps in the country.

•The contribution of fisheries to GDP in 2006-07 was estimated to be US$ 1600 million, a six per cent increase over 2005-06 (in dollar terms).

•The AP government has entered into an agreement with the US-based World Tuna Development International (WTDI) to develop tuna fishery in the Bay of Bengal.

•The state government will invest US$ 2 million towards 51 per cent of the equity in the proposed joint venture company named as Andhra Pradesh Marine Fisheries Development Ltd (APMFD) while WTDI will invests the remainder—US$ 1.99 million towards 49 per cent. The remaining US$ 11.5 million will be taken as term loans from banks.

Animal husbandry

•The sector is rapidly expanding and is playing a significant role in improving the rural economy.

•Providing gainful employment to a large number of small/marginal farmers and agricultural labourers to enhance their economic status

•Activities of the Animal Husbandry Department have been oriented towards health of livestock and increased production of milk, eggs and meat.

Sources:Commodities Bureau Agriculture action plan 2009-2010, Department of Agriculture website, http://agri.ap.nic.in , Andhra Pradesh economy in brief 2008, APDES website, www.apdes.ap.gov.in

Petroleum, chemicals and petrochemicals

•According to provisional figures for 2007-08, net natural gas production stood at about 1555 million cubic meters.

•The Krishna Godavari basin area has a total hydrocarbon resource base of 1,130 million metric tonnes.

•Andhra Pradesh is set to become the second Indian state after Gujarat to enter the oil and gas exploration and production segment through bids for oil and gas blocks under NELP.

•The Andhra Pradesh government decided to enter the oil and gas exploration and development sector and set up a special purpose vehicle (SPV), Andhra Pradesh Gas Infrastructure Corp Ltd as a joint venture between two state-owned entities.

•The infrastructure provider for industries in the state, AP Industrial Infrastructure Corp. Ltd, or APIIC, would hold 51 per cent in the SPV and AP Genco, would hold the balance.

•Petroleum companies are in the process of setting up a gas grid across Andhra Pradesh.

•ONGC is setting up a 7.5 million tonnes refinery in the Kakinada SEZ with a capital outlay of US$ 1.82 billion.

•HPCL Visakhapatnam plant has expanded its refined crude throughput from the existing 7.50 million tonnes in 2003-04 to 9.4 million tonnes in 2007-08

Petroleum, Chemicals and Petrochemical Investment Regions (PCPIRs)

The state is setting up PCPIRs which would be specially delineated investment regions with an area of around 250 sq km for manufacturing facilities, associated services and infrastructure for domestic and export-led production in petroleum, chemical and petrochemicals. The government plans to locate a PCPIR near Visakhapatnam in an area of 250 sq km

Sources:Petroleum statistics, Ministry of Petroleum and Natural Gas website, http://petroleum.nic.in, Directorate General of Hydrocarbons 2007-08 annual report News articles

Tourism

•AP is known for its pristine beaches, sacred places of worship, lush green forests, spicy cuisine and hospitable people

•With tourist attractions such as Charminar, Golconda Fort, and Ramoji Film City, Araku Valley, Borra Caves, Tirupati Balaji Temple, and Puttaparthi Saibaba, the state offers attractive investment opportunities to developers and investors

•The state ranks first in domestic tourist arrivals.

•The state ranks seventh in international tourist arrivals and accounted for 5.6 per cent of the total international tourist arrivals in India in 2008.

•88 projects worth US$ 197.56 million have been commissioned by the private sector.

•During the last four years, the state government has facilitated 68 projects with a total investment of US$ 368.29 million.

•Nine projects have been sanctioned for the State by the Ministry of Tourism during 2008-2009, at a project outlay of US$ 21 million.

•Andhra Pradesh Tourism Development Corporation (APTDC) has developed tourist infrastructure and special packages to facilitate the overall development of the tourism sector in the state.

•The state government has identified Hyderabad, Visakhapatnam, Tirupati, Vijayawada, Nagarjunasagar and Warangal for tourism development

•Upcoming mega projects

•Tirupati heritage circuit

•Kadapa heritage circuit

•Charminar area

Sources: Directorate of Tourism and Directorate of Economics and Statistics, APTourism statistics at a glance 2008, Ministry of Tourism website, www.tourism.gov.in, Projects sanctioned, Ministry of Tourism website, www.tourism.gov.in

Leather industry

•The state is a major producer of hides and skins, producing about 19 million pieces per annum, constituting around 10 per cent of the country‘s output.

•34 large and medium tanneries in the state produce about 40 million sq ft of processed hides and skins per annum.

•The state has15 leather goods and footwear manufacturing units in the large-and medium-scale sector.

•The government provides financial assistance in the form of investment grants to the extent of 30 per cent of cost of plant and machinery for SSI and 20 per cent of cost of plant and machinery for other units, subject to a ceiling of US$ 0.12 million for technology upgradation or/and expansion.

Leather industrial parks

•Leather Industries Development Corporation of Andhra Pradesh (LIDCAP) is the nodal agency for leading the leather industry programme in the state.

•Plans to establish 71 mini industrial parks on 25 acres for processing raw material.

•Plans to establish 16 medium industrial parks of 100 acres each for processing semi-finished leather to finished leather.

•Plans to establish six mega industrial parks of more than 300 acres each including an International leather complex at Krishnapatnam (KILC) to convert all intermediate products to export quality products.

•KILC is a world class infrastructure for leather tanning and leather processing. The project finance is supported by the Government of India, Government of Andhra Pradesh and private participation in the SPV.

•KILC is located in Krishnapatnam in Nellore district of Andhra Pradesh in South India, in an area of 412 acres near the sea coast.

•It is proposed that KILC will house about 25 tanning units in a floor area of 250 acres of land and about 21 leather processing units with capacities ranging between 6 to 25 tonnes and a total capacity of 300 tonnes in a floor area of 220 acres.

Source: Leather sector in AP, ILC profile, LIDCAP website, www.lidcap.org

Other sectors identified for growth

Hospitality and entertainment

•Being a major tourist hub in the country, the state is making rapid strides in the retail and entertainment segment.

•To attract new investments in the sector, the government offers various incentives including an investment subsidy of 20 per cent of the project cost, subject to a maximum of US$ 0.05 million.

•To encourage upgradation to international standards, selected hotels will be offered an incentive of 15 per cent of the project cost.

Leisure and entertainment

•The sector is witnessing heightened interest in projects such as world class spas, entertainment centres, mega shopping malls, multiplexes, business convention centres and theme parks.

•Urban entertainment, including amusement parks, has redefined leisure and entertainment activities in the city.

Key upcoming projects

•A five-star hotel with more than 250 rooms and 100 service apartments is coming up near Hi-tec City, the IT hub, at an estimated cost of US$ 121.95 million.

•Choice Hotels International is entering Andhra Pradesh with hotels in Hyderabad, Tirupati and Visakhapatnam. The company has partnered with Vishank Hotels International to develop a 4-star, 130-room hotel as well as a service apartment complex in Gachibowli, Hyderabad under the ‗Clarion‘ brand name. Choice Hotels plans to launch budget hotels in Tirupati and Visakhapatnam under the 'Sleep Inn' brand.

•Panoramic Universal Limited plans to open a 4-star hotel with 90 rooms at an investment of US$ 9.75 million in Hyderabad.

•India will soon have its first green hotel, The Park Hotel, in Hyderabad. A 280-room hotel, it is scheduled to begin operations by fall 2009. It will be built with an investment of more than US$ 87.5 billion, which is 15 per cent higher than the investment for a non-green hotel.

Retail

•Organisedretail is catching up fast with significant mall development in the pipeline with 20 existing and 24 upcoming malls in Hyderabad alone.

•Reliance Retail opened its first 'Reliance Fresh' stores in Hyderabad and Secunderabad in late 2006. The company has plans to open hypermarkets in Visakhapatnam, Vijayawada and Guntur.

•Reebok has opened its largest store in the world in Hyderabad.

•GVK group opened ‗GVK one‘ a world class shopping space measuring 6,25,000 sq ft in May 2009.

•‗GVK one‘ also hosts a 1,200-seat INOX multiplex along with a themed entertainment centre ‗Funzone‘.

Electronic hardware

•Key segments within the electronic hardware industries in the state:

•Telecommunications

•Industrial electronics

•Test and measuring equipment

•Computer and consumer electronic

•Strategic electronics

•There is immense scope for investments in the fields of nanotechnology, semiconductors, computer peripherals, appliances, precision engineering, integrated circuits, large scale integration chips (LSICs) and very large scale integration chips (VLSICs).

Semiconductors

•An investment of US$ 3 billion has been announced for setting up of a fabrication unit in Fab City, Hyderabad.

•Fab City has been allotted 1,200 acres close to the new international airport.

•It offers various incentives such as exemptions, reimbursements, facilitating technical education, etc., for the sector under the electronic hardware policy of the state.

Sources: News publications; "Urban infrastructure", GVK group website, www.gvk.com

Other sectors identified for growth

Gems and jewellery

•Hyderabad is one of the leading hubs for jewelleryin India

•The state produces a wide array of gems ranging from precious gems and pearls among others.

The AP Gems and JewelleryPark

•Developed on an area of 2.5 acres in Hyderabad with an investment of around US$ 12.68-US$ 13.90 million.

•The park is a JV between the Phoenix Group, IOI Corporation and AP State Trading Corporation.

•It has been developed as a state-of-the-art facility in which the floor space will be sold to jewellersand pearl dealers.

Hyderabad Gems Special Economic Zone Ltd (HGSEZ)

•Situated at Hardware Park near the upcoming international airport.

•SEZ to be set up at a cost of about US$ 121.95 million. The 200-acre park will house more than 75 diamond, gold and watch manufacturing units and will generate 50,000 new jobs. An international trade centre, a world class convention centre, plus an exhibition area will also be a part of the SEZ.

•It is the first jewellery park to have an integrated manufacturing and trading facility.

Contribution to national mineral production (in per cent)

Barytes

94

Ball clay

63

Corundum

61

Diamond

40

Calcite

39

Mica

28

Garnet

26

Limestome

23

Mines and minerals

•Andhra Pradesh is estimated to account for approximately nine per cent to total mineral production in 2008-09.

•States mineral production was valued at US$ 2.4 billion in 2007-08, a 14 per cent increase over 2006-07.

•Production in iron ore increased by 73 per cent, while that of manganese ore by 120 per cent and petroleum (crude) by 11 per cent in 2008-09.

•Production of silica sand increased by 136 per cent, ochre by 86 per cent, quartzite by 67 per cent, dolomite by 19 per cent, limestone by nine per cent and coal eight per cent in 2008-2009.

Sources:Socio Economic Survey, Andhra Pradesh, 2007News publications, Indian mineral scenario -states, Ministry of Mines website, www.mines.nic.in

Business climate

Hub for knowledge-based industries

The state provides a conducive environment for the growth of knowledge-based industries.  The state is a leading IT and biotech hub.  Large number of MNCs and Indian companies in these two sectors have their development and R&D centers in the state.  71 out of 500 top global corporates are present in the state.

Policy and fiscal incentives

AP offers a wide range of fiscal and policy incentives for businesses under the Industrial Investment Promotion Policy 2005–10.  Additionally, the state has well drafted sector-specific policies.

Rich labour pool

AP has a large base of skilled labour, making it an ideal destination for knowledge-based sectors.  Further, the state has a large pool of semi-skilled and unskilled labour.  It has a large labour force in the 15 to 49 age group.

Facilitating infrastructure

The state has a robust facilitating and support infrastructure for businesses across sectors.  AP boasts of well-developed social, physical and industrial infrastructure and virtual connectivity.

High economic growth

GSDP at constant prices is expected to touch US $ 49.29 billion.  The state is targeting 9 percent annual economic growth during the 11th Five Year Plan period (2007–2012).

Stable political environment

The state has a stable political environment with a single-party government.  AP has a strong, committed and focused leadership that strives towards creating a conducive business environment for the progress of the state.

 

 

 

 


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