ANDHRA PRADESH - IBEF · 4. Andhra Pradesh – State Profile • Covering an area of 275,100 sq km...

ANDHRA PRADESHApril 2010

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Investment climate of a state

Resources/Inputs

Incentives to industry Physical and social infrastructure

Regulatory framework

• Skilled and cost-effective labour• Labour market flexibility• Labour relations• Availability of raw materials and natural

resources

• Tax incentives and exemptions• Investment subsidies and other incentives• Availability of finance at cost-effective terms• Incentives for foreign direct investment (FDI)• Profitability of the industry

• Procedures for entry and exit of firms• Industrial regulation, labour regulation, other

government regulations• Certainty about rules and regulations• Security, law and order situation

• Condition of physical infrastructure such as power, water, roads, etc.

• Information infrastructure such as telecom, IT, etc.

• Social infrastructure such as educational and medical facilities

Investment climate of a state is determined by a mix of factors

ANDHRA PRADESH April 2010

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Contents

Advantage Andhra Pradesh

State economy and socio-economic profile

Infrastructure status

State policies and incentives

Business opportunities

Doing business in Andhra Pradesh

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Andhra Pradesh – State Profile

• Covering an area of 275,100 sq km, Andhra Pradesh is the fourth-largest state in India after Rajasthan, Madhya Pradesh and Maharashtra. It falls in the Southern peninsula of India; has a coast line of 974 km.

• The state has 23 administrative districts. Hyderabad is the capital city. Visakhapatnam, Vijayawada, Tirupati, Warangal, Guntur, Kakinada, Nellore and Kurnool are the other key cities in the state.

• Andhra Pradesh has three major rivers, viz., the Godavari, the Krishna and the Thungabhadra.

• There are seven agro-climatic conditions and a variety of soils to support the cultivation of wide range of crops.

• The most commonly spoken language of the state is Telugu. Hindi, English and Tamil are the other languages used.

Source: Maps of India

Andhra Pradesh April 2010ADVANTAGE ANDHRA PRADESH

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Hub for knowledge-based industries

Policy and fiscal incentives

Andhra Pradesh has emerged as a key state or the knowledge-based industry including IT, pharmaceuticals and biotechnology. It is also a leading agricultural state in the country. Seventy one of the 500 top global corporations are present in the state.

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

Advantage Andhra Pradesh … (1/2)



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Facilitating infrastructure

The state has well-developed social, physical and industrial

infrastructure and virtual connectivity; has good power, airport, IT

and port infrastructure.

High economic growthThe state is targeting 9 per cent annual economic growth during

the Eleventh Five-Year Plan period (2007–12). Vast natural gas

reserves found in the Krishna–Godavari basin have opened up

immense possibilities for the state economy.

Stable political environmentThe state has a stable political environment with a single-party government. The State Government is committed towards creating a progressive business environment.

Advantage Andhra Pradesh … (2/2)



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Andhra Pradesh in figures … (1/2)

Parameter Andhra Pradesh All-states Source

Economy

GSDP as a percentage of all states’ GSDP 7.9 100.0 CMIE, 2006-07, current prices

Average GSDP growth rate (%) 13.9 7.5 CMIE, 1999-2000 to 2007-08

Per capita GSDP (US$) 947.0 998.1 CMIE, 2007-08

Physical Infrastructure

Installed power capacity (MW) 9,224.3 98,996.4 Central Electricity Authority, as of March 2009

GSM cellular subscribers (No) 27,422,275 367,328,179 Cellular Operators Association of India, as of November 2009

Broadband subscribers (No) 400,663 4,981,976 As of October 2008

National Highway length (km) 4,537.0 70,548.0 Ministry of Road Transport & Highways, 2007-08

Major and minor ports (No) 1 +12 12 + 187 Ministry of Shipping

Airports (No) 11 133 Industry sources

Social Indicators

Literacy rate (%) 60.5 64.8 Census of India, 2001

Birth rate (per 1,000 population) 18.7 23.3 Central Bureau of Health Intelligence, 2007


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Andhra Pradesh in figures … (2/2)

Parameter Andhra Pradesh All-states Source

Ease of doing business

FDI inflows (US$ billion) 4.2 102.1 Department of Industrial Policy and Promotion, April 2000 to October 2009

Outstanding investments (US$ billion) 141.5 1,709.7 CMIE, as of December 2008

Industrial Infrastructure

PPP projects (No) 70 460 www.pppindiadatabase.com

SEZ (No) 18 98 Functional as of August 2009, www.sezindia.nic.in

Parameter Andhra Pradesh Government

Policy support

Sectors with specific policies Industry overall, biotechnology, ICT, tourism, textile and apparel

Availability of labour Adequate skilled labour available

PPP: public-private partnership, SEZ: special economic zone


9

Medium HighLow

Medium

High

Textilesand apparel

Agro and food processing

IT and ITeS

Biotechnology

Bulk drugs and pharmaceuticals

Industry attractiveness matrix

*Factor advantage

Polic

y th

rust

*Factor advantages include benefits due to geographical location and availability of factors like talent pool, natural resources and capital

Key industries with policy thrust and factor advantages


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Contents







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Socio-economic snapshot of Andhra Pradesh

Parameters Andhra Pradesh

Capital Hyderabad

Geographical area (sq km) 275,100

Administrative districts (No) 23

Population density (persons per sq km) 277

Total population (million) 76.2

Male population (million) 38.5

Female population (million) 37.7

Decadal population growth rate (%) 14.6

Sex ratio (females per 1,000 males) 978

Literacy rate (%) 60.5

Male (%) 70.3

Female (%) 50.4

Average life expectancy (years) 63.9

Sources: Andhra Pradesh Government (www.aponline.gov.in)Director, Census Operations, A.P. HyderabadDirectorate of Economics and Statistics, HyderabadCMIE

Andhra Pradesh April 2010

STATE ECONOMY AND SOCIO-ECONOMIC PROFILE

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• At current prices, the Gross State Domestic Product (GSDP) was US$ 71.1billion in 2008-09.

• Between March 2000 and March 2009, the average annual GSDP growth was 11.5 per cent.

• The state is looking at an annual economic growth rate of 9 per cent during the Eleventh Five-Year Plan period (2007-12).

Andhra Pradesh’s GSDP (US$ billion)

Sources: CMIE, Andhra Pradesh Budget, 2008-09

27.830.0

32.7

36.943.7

46.652.5

64.177.7

71.7

0.0 20.0 40.0 60.0 80.0 100.0

1999-002000-012001-022002-032003-042004-052005-062006-072007-082008-09

CAGR11.5%

Andhra Pradesh’s GSDP



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• The Net State Domestic Product (NSDP) of Andhra Pradesh was about US$ 51.1 billion in 2007-08.

• The average NSDP growth rate between 1999-2000 and 2007-08, was about 9.4 per cent.

Andhra Pradesh’s NSDP (US$ billion)

Source: CMIE

25.1

26.2

27.5

29.834.1

35.0

38.1

44.2

51.1

0.0 10.0 20.0 30.0 40.0 50.0 60.0

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

CAGR 9.4%

Andhra Pradesh’s NSDP



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The tertiary sector has an increasing share in Andhra Pradesh’seconomy

• At US$ 29.1 billion, the tertiary sector contributed 61 per cent to the GSDP (at constant prices) in 2007-08. It was followed by the primary sector, contributing 35 per cent (US$ 16.5 billion) and the secondary sector’s contribution of 4 per cent (US$ 2.1 billion).

39%

3%

58%

Primary

Secondary

Tertiary

35%

4%

61%

Primary

Secondary

Tertiary

1999-2000 2007-08

Source: CMIE



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Per capita GSDP

• The per capita GSDP of Andhra Pradesh increased almost 2.5 times from US$ 368 in 1999-2000 to US$ 947 in 2007-08.

• A robust tertiary sector has helped Andhra Pradesh increase its average per capita GSDP by over 12 per cent between 1999-2000 and 2007-08.

(US$

)

368 395 427474

556 586653

789

947

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

1000.0

1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Source: CMIE

Per capita GSDP



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Industries in Andhra Pradesh

Key industries in Andhra Pradesh

• Agro and food-based industry

• Biotechnology

• Bulk drugs and pharmaceuticals

• IT and ITeS

• Mines and minerals

• Textiles and Leather

• Tourism

• The natural resources, policy incentives and infrastructure in the state are favourably suited for investments in major sectors such as drugs and pharmaceuticals, biotechnology, IT/ITeS, mines and minerals, textiles, leather and tourism.

• Andhra Pradesh is one of the foremost states to have developed sector-specific policies.

• Forming industrial clusters and developing infrastructure has been a key strategy of the state to attract investments in various industries.



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Andhra Pradesh – among the three largest food-grain producers in the country

Crop Annual production (‘ooo tonnes)

Sugarcane 20,254.0

Rice 13,324.0

Maize 4,135.0

Cotton 3,491.0

Groundnut 2,604.0

Gram 912.0

Chilly 772.0

Onion 690.0

Mesta* 501.0

Sorghum 470.0

• In 2007-08, the total production of major crops of the state was over 49.0 million tonnes.

• The top ten crops account for over 96.2 per cent of the total crop production of the state.

• Sugarcane and rice, together, accounted for 68.5 per cent of total production. They were followed by maize, cotton and groundnuts.

• In 2007-08, Andhra Pradesh was among the three largest producers in the country of rice, maize, groundnut and sunflower seeds.

Source: CMIE*A variety of Jute



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Andhra Pradesh’s exports trends• Andhra Pradesh’s exports increased at a CAGR of

about 26.6 per cent between 2001-02 and 2007-08.

• The state’s major exports products are software, drugs and pharmaceuticals, leather, animal and marine products, and agriculture and agro-based products.

• In order to boost exports from Andhra Pradesh, the State Government offers a special package of incentives to the export oriented units (EOU).

Source: Capital Markets

Annual exports growth trends (%)

16.2

26.0

23.5

3.8

29.7

50.3

21.3

0 10 20 30 40 50 60

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08



Export package to EOUs under the Industrial policy

• Sales tax exemption on purchase of raw materials.

• Financial assistance through Andhra Pradesh State Financial Corporation (APSFC) at concession rates.

• Grant of 30 per cent on ground rent for participation in the international trade fairs, subject to a maximum limit of 9 sq m.

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• The state has had a healthy FDI inflow over the years, primarily, in sectors related to IT/ITeS, automotive, engineering and electronics.

• According to the Reserve Bank of India, FDI inflows from April 2000 to October 2009 amounted to US$ 4.2 billion

• Of the total outstanding investments of US$ 141.5 billion as of December 2008, Andhra Pradesh had a well balanced distribution by sector with manufacturing, electricity, services, agriculture and construction having project investments of about 14 per cent to 27 per cent each.

Investments and FDI inflows

Break up of investments by sector

Source: CMIE, as of December 31, 2008

27%

4%

21%17%

17%

14%

Manufacturing

Mining

Electricity

Services

Irrigation

Construction



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Contents







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• Andhra Pradesh has 17 National Highways running through it and covering 4,537 km.

• The roads under the State Road and Building Department was 191,792 km in 2006-07.

• Road density per thousand sq km was 697.4 in 2006-07.

• There are about 37 public-private partnership (PPP) projects in the roads sector that are at various stages of development.

Road network



INFRASTRUCTURE STATUS

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• When completed, the Mass Rapid Transit Service (MRTS) project is expected to carry about 1.6 million passengers per day by 2011 and 2.6 million passengers per day by 2021.

• The total cost for the project has been calculated at US$ 2.6 billion.

• The state is the first to have a PPP Metro Rail project sanctioned by Government of India.

• The Central Government has already sanctioned 20 per cent of the project cost through the viability gap funding (VGF) mode.

• This project is environmental friendly and is expected to reduce pollutants by about 3,100 tonnes per annum (TPA).

• Andhra Pradesh has a total railway network of 4,287.4 km, which is under the control of the South Central Railway with Secunderabad as the headquarters.

• The state has a total of 748 railway stations; the rail network comprises of 4,102.7 km of broad gauge and 184.7 km of metre gauge tracks.

Sources: South Central Railways website, http://scrailway.gov.in; Ministry of Road Transport & Highways , Annual Report, 2008-09; AP Admin setup, Directorate of Economics and Statistics website, www.apdes.ap.gov.in; Project description, Hyderabad metro rail website, www.hyderabadmetrorail.in

Railway network

South Central Railway network

Division Broad gauge Metre gauge Total

Secunderabad 1,311.2 0.0 1,311.2

Vijaywada 945.8 0.0 945.8

Guntakal 1,121.6 184.7 1,306.2

Guntur 617.2 0.0 617.2

Hyderabad 569.6 0.0 569.6

Nanded 823.0 175.9 998.9

Total 5,388.3 360.6 5,748.9



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Airports

• The state has an international airport at Hyderabad and domestic airports at Visakhapatnam, Tirupati, Rajahmundry, Warangal, Vijayawada, Donakonda, Kadapa and Puttaparthy

• Hyderabad is connected to several key international destinations such as Amsterdam, Bangkok, Chicago, Frankfurt, Dubai, Singapore, Sharjah, London and Kuala Lumpur, besides all major destinations across India.

• The Rajiv Gandhi International Airport near Shamshabad (about 27 km from Hyderabad) is a newly completed airport. It has replaced the former international airport of the city at Begumpet.

• The total cost for this project is US$ 560 million; it has been built on an area of 5,449 acres.

GMR-Hyderabad International Airport Limited (GHIAL), Shamsabad

Started operations in May 2008.

Constructed by the consortium of:• GMR group• Malaysia Airport Holding Berhad (MAHB)• Government of Andhra Pradesh • Airports Authority of IndiaSingle terminal, expandable structure

Final capacity of 50 million passengers per year and 1 million tonne of cargo.Total built-up area of 900,000 sq m.

Lufthansa Technik to set up a maintenance, repair and overhaul (MRO) facility at the airport.

A new flight academy to be established at the airport.



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Ports• Andhra Pradesh is the second-highest cargo-handling port after Gujarat.

• The Visakhapatnam port ranks amongst the top three of the 12 major ports in the country. In 2009, it had a port traffic of 63.9 million tonnes which accounted for 12 per cent of total port traffic at all major ports.

• Coking coal, iron ore, petroleum products and thermal coal are some of the key products handled by the port. It also has a high volume of container traffic.

• Other than Visakhapatnam, the state has 12 intermediate and minor ports.

• In 2008, the minor ports at Andhra Pradesh handled about 9 per cent of the total traffic at all minor ports across the country.

22 23 26 30 33 34 36 36 40 45 44 46 48 50 56 5665 64

0

10

20

30

40

50

60

70

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Visakhapatnam Port Traffic (million tonnes)



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Telecom infrastructure• Andhra Pradesh had 4,166 telephone exchanges and

5.6 million telephone connections (excluding mobile phones) as of March 2009.

• The number of public call offices as of March 2009 were 200,291.

• There are about 27.4 million GSM cellular subscribers and 400,000 broadband connections.

• The state has approximately 44,000 km of fibre-optic cable network with public and private sector connectivity.

• Reliance Communications has created infrastructure for providing the required bandwidth for basic telecom services and other high-end services by laying a fibre-optic cable backbone of 3,000 km throughout the state.

• The State Government has embarked on a plan to have a reliable communications backbone, which is capable of gigabit ethernet connectivity across all government departments and offices.

• It would connect the state secretariat to district headquarters, mandals and villages, bringing the information superhighway to the doorstep of the common man in rural areas.

• The broadband network being implemented with private participation would connect the state headquarters with 10 gigabit per second (gbps) to each district headquarter, 1 gbps to each of the 1,128 mandalheadquarters and 100 megabit per second to each of the villages.

Sources: Chief General Manager, Telecom, Andhra Pradesh Telecom Regulatory Authority of India 2008-09 annual report



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• As of March 2009, Andhra Pradesh had a total installed power generation capacity of 9,224.3 MW, which comprised 7,097.9 MW under state utilities and 2,126.4 MW under the private sector.

• The capacity owned by state utilities comprised about 47 per cent of coal-based power plants and 50 per cent of hydro-power plants.

• About 75 per cent of the private sector controlled capacity was of gas-based power plants.

• Apart from the state and private sectors, NTPC, the central sector operator in the state, had plants of another 3,600.0 MW for thermal power generation.

• Per capita consumption was 703 kWh in 2007-08.

Installed state and private capacity (MW)

Source: Central Electricity Authority

Power … (1/2)

7,238.2 7,616.2 7,786.6 8,072.1 8,859.7 9,017.8 9,452.0 9,224.3

01,0002,0003,0004,0005,0006,0007,0008,0009,000

10,000

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09



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AP Genco’s hydro-power plants AP Genco’s thermal power plants

• The integrated Andhra Pradesh State Electricity Board (APSEB) was restructured in 1999 to form the following companies:

Power … (2/2)

Segment Company name

Power generation Andhra Pradesh Power Generation Corporation Limited (AP Genco)

Power transmission Transmission Corporation of Andhra Pradesh Limited (AP Transco)

Power distribution Central Power Distribution company of Andhra Pradesh Limited (APCPDCL), Hyderabad

Southern Power Distribution Company of Andhra Pradesh Limited (APSPDCL), Tirupati

Eastern Power Distribution Company of Andhra Pradesh Limited (APEPDCL), Visakhapatnam

Northern Power Distribution Company of Andhra Pradesh Limited (APNPDCL), Warangal



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Water supply Sewerage system and solid-waste management system

• The average per capita supply of water in major cities is 106 lpcd*

• A coverage of 85 to 90 per cent in the core city areas.

• Operation and maintenance costs being recovered from water tariffs is high, at 85 per cent in Hyderabad.

• Solid waste collection efficiency is very high across the cities of Andhra Pradesh and varies from 85 to 100 per cent, on an average, for all the cities

• Area coverage of the sewerage system in the major cities varies from 10 per cent to 45 per cent

* litres per capita per day

Per capita water supply across key cities

Source: Commissionerate of Industries, Andhra Pradesh, 2006

Desired LevelCurrent per capita supply (litres/day)

Urban infrastructure … (1/2)



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Sewerage treatment infrastructure (%)Under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), projects costing US$1,162.1million have been sanctioned for Hyderabad, Visakhapatnam, Vijayawada and Tirupati.

The projects have been sanctioned for completion between 2005-06 and 2009-10. Some of the key areas of development are roads/flyovers, water supply, storm water drainage, old city drains, solid-waste management and mass rapid transport system.

Projects of value US$ 216.3 million have been completed in 2005-07. These projects are located in Hyderabad and Vishakhapatnam and relate to roads, water supply, drains/storm water drains and sewerage.

Visakhapatnam’s urban Infrastructure snapshot

• Visakhapatnam has a high per capita road length of 1.03 km.

• Percentage of pucca roads in the cities varies from 70 per cent to 95 per cent.

• Percentage coverage of storm water drains varies from 30 per cent to 50 per cent.

Urban infrastructure … (2/2)

Source: JNNURM, Ministry of Urban Development, www.urbanindia.nic.in



4540

10.5

23

10

0

10

20

30

40

50

Hyderabad Vijaywada Vishakapatnam

Area Coverage (%) Treated (%)

30

Project name Sector PPP type Project cost (US$ million) Stage

Vodarevu Nizampatnam ports and port-based corridor development Ports BOOT 3,652.2 Construction

Cuddapah Mydukur Kurnool road Roads BOT-Toll 344.6 Construction

Integrated solid waste management for Hyderabad Urban development DBFOT 195.0 Construction

Four-laning of Hyderabad Karimnagar Ramagundam road Roads BOT-Toll 295.2 Bidding

Naketpally Addanki Medaramitla road Roads BOT-Toll 260.2 Bidding

Bus terminal and commercial development at Musheerabad Urban development Lease 54.3 Bidding

Health spa and resort Tourism Lease 13.0 Bidding

Four-laning of Khammam Tallada Devarapally road Roads BOT-Toll 143.5 EOI

Four-laning of Perecherla Thokapalli road Roads BOT-Toll 113.5 EOI

Four-laning of Warangal Khammam road Roads BOT-Toll 103.5 EOI

Key public-private partnership projects

Source: www.pppindiadatabases.com

EOI-Expression of interest, BOOT: build-own-operate-transfer, BOT: build-operate-transfer, DBFOT: design-build-finance-operate-transfer



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Education sector … (1/2)

• The state had a literacy rate of 60.5 per cent in 2001 as against 44.1 per cent in 1991.

• In 2001, the male literacy figure stood at 70.3 per cent, while female literacy was at 50.4 per cent.

• A total of 41.6 million students were enrolled in schools in 2007-08. The total number of teachers was 439,136.

• Of the 97,475 schools in 2007-08, there were 62,464 primary schools, 17,957 upper primary, 16,937 high schools and 99 higher secondary schools.

• The state adds more than 100,000 engineering graduates, 12,000 management graduates and 350,000 English-speaking graduates every year.

• The Hyderabad University and the Osmania University are among the leading universities of the country.



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Education sector … (2/2)

• At the intermediate college level, courses are available in the science, arts and commerce streams.

• Vocational courses are offered in the fields of agriculture, engineering and technology, home science, paramedical, business and commerce, and humanities.

• Total junior colleges in 2007-08 were 4,032 with a total enrolment of 1.4 million students.

• The Technical Education Department of Andhra Pradesh supports 540 engineering colleges.

Colleges by courses, 2008-09



Degree colleges

• Government colleges: 241

• Aided colleges: 179

• Unaided colleges: 1,459

• Under-graduate and post-graduate colleges in 2008-09: 5,236

Life-sciences institutes

• Centre for Cellular and Molecular Biology• Centre for DNA Fingerprinting and Diagnostics• Indian Institute of Chemical Technology• International Crop Research Institute for Arid and

Semi-Arid Tropics (ICRISAT)• Directorate of Rice Research, National Academy of

Agricultural Research Management• National Institute of Nutrition • Indian Council of Agricultural Research centres.

610540

256

498

698

0

100

200

300

400

500

600

700

800

B.Ed Engineering Pharmacy MBA MCA

33

• Andhra Pradesh had 1,570 primary healthcare centres (4-6 beds) as of March 2008, with 2,214 doctors.

• There were 167 community healthcare centre (30 beds) with 235 specialists.

• Hyderabad has approximately 60 hospitals that classify as authorised centres for providing medical services.

• There are about 3,800 beds in tertiary care hospitals. Another 700 beds are expected to be added in the next few years.

Leading hospitals in Hyderabad

Apollo Hospital

Yashoda Super Specialty Hospitals

Care Hospital

Wockhardt Kamineni Hospital

Nizams Institute of Medical Sciences

MNJ institute of Oncology and Regional Cancer Centre

Indo-American Cancer Institute and Research Hospital

Global Hospital

Medwin Hospital

Medicity Hospital

L V Prasad Eye Institute

Krishna Institute of Medical Sciences

Source: Bulletin on rural health care statistics in India, Ministry of Health and Family Welfare website, www.mohfw.nic.in

Health infrastructure



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• There are several sports complexes in Hyderabad, Visakhapatnam, Tirupati and other cities. Swimming and tennis are the major sports although, other games are also popular.

• The Boulders Hill in Hyderabad, The Army Golf Course in Secunderabad and the East Point Golf Club in Visakhapatanam are well known golf courses in the state.

• The Tirupati temple in Southern Andhra Pradesh makes the state one of the leading religious tourism spots in the country.

• AP Tourism promoted convention centres in Hyderabad state include Taramati Baradari, Hyderabad International Convention Centre, Shilpa Kala Vedika, HITEX, Marriott Convention Centre, Ramoji Film City, Katriya De Royal – Convention Facilities.

Cultural infrastructure



35

• On the industrial infrastructure front, the state has taken a number of developmental initiatives to achieve consistent economic growth.

• The Government has initiated a set of prestigious projects including those in industrial infrastructure for the specific sectors, through the Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC).

• APIIC has already helped set up 272 industrial estates and specialized parks including the L&T Infocity, ICICI Knowledge Park, SP Bio-tech Park, Marine Bio-tech Park, Agri Bio-tech Park, special economic zone (SEZ), Pharma City, Hardware Park, HITEC city, leather parks, food processing park and agri-export zones.

• Since 2005-06, 592 IT parks have been registered by the Software Technology Parks of India (STPI).

Industrial infrastructure development … (1/2)

STPI units registered (No)

Sources: IT parks, IT SEZs, IT and Communications Department website, http://apit.ap.gov.in; Export Performance of IT/ITES Industry for the year 2008-09- presentation, STPI website, www.hyd.stpi.in



10521164

845

616

173 174 176 69

0

200

400

600

800

1000

1200

1400

2005-06 2006-07 2007-08 2008-09

All India A P

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36

Sources: Commissionorate of Industries, Andhra Pradesh, 2006; SEZ India website, www.sezindia.nic.in; Andhra Pradesh Government budget website, http://budget.ap.gov.in

Industrial infrastructure development … (2/2)

• The Central Government has given formal approval to 103 SEZs; in-principle approval to four SEZs and 70 notified SEZs.

• Export Promotion Industrial Park (EPIP ) to be set up in an area of 204 acres. APIIC is developing the park at an estimated cost of US$ 35.36 million.

• Critical Infrastructure Balancing Scheme (CIBS) to fund Industrial associations/service societies/NGOs for development of critical infrastructure.

Larsen & Toubro (L&T) Infocity

Developed jointly by APIIC and L&T.

Spread across 158 acres at Madhapur with state-of-the-art infrastructure.

Built in three phases with total built-up area of 1.8 million sq ft on 20.7 acres of land. Employs more than 12,500 persons.

Genome Valley

Genome Valley is India’s first state-of-the-art life sciences cluster, spanning 600 sq km in Hyderabad.

Provides access to world-class infrastructure to domestic and international companies.

Comprises dedicated parks such as ICICI Knowledge Park and Shapoorji Pallonji Biotech Park developed on a public-private partnership (PPP) model.

• Integrated Infrastructure Development Centres (IIDC) to establish industries in rural/backward areas and provide agriculture–industry link.

• Centres are located in Nandyal (Kurnool), Tada (Nellore), Keelapattu and Madikonda(Warangal), Gajularamaram (Ranga Reddy) and Surampally (Vijaywada).



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37

IT / ITESPharma / Biotech

Textile & Apparel

Guntur

VishakapatnamHyderabad

Sircilla

Warangal

Nalagunda

Food Processing

Vizianagaram

Bheemavaram

Chittoor

Vijaywada

Automobiles & Engineering

Rangareddy

MAHARASHTRA

KARNATAKA

TAMIL NADU

MADHYA PRADESH

ANDHRA PRADESHIndustrial Clusters

NN

HindupurNellore

Karnool Ongole

Mineral

Khammam

Kuppam

Kadapa

Upcoming SEZs Industrial clusters in AP

SEZs and industrial clusters



38

Infrastructure type Investments (US$ million)

Power* 15,230.8

Roads 1,353.1

Oil and gas 2,730.1

Railways 5,346.4

Airport 176.1

Shipping 1,379.5

Total 26,216.0

Infrastructure investments

*Generation and distributionSource: CMIE

• Infrastructure investments in Andhra Pradesh were over US$ 26.2 billion, as of December 2008.

• Over 58 per cent of investments in infrastructure were in the area of power generation and distribution.

• About 20 per cent of the investments were in the railways sector, while another 10 per cent were in the oil and gas sector.



39

Location (district) Name of the park

Chittoor Food processing park

Medak Export promotion industrial park

Ranga Reddy Agri-biotech park

Apparel park

Biotech park

Financial district

Gems and jewellery park

Hardware park

Hi-Tech city

Hitex exhibition centre

ICICI knowledge park

Industrial estate for lady entrepreneurs

International convention centre

Mind Space IT parks

Visakhapatnam AP SEZ

JN Pharma City park

Visakhapatnam industrial water supply project

Visakhapatnam SEZ

Existing mega parks



40

Location (district) Name of the park Location (district) Name of the park

Ranga Reddy Pharma cluster Visakhapatnam Brandix textile city

Business district and trade towers IT park

Rajiv Gandhi nanotech park Apparel export park

Semindia Fab city Marine biotech park

Hardware park Nalgonda Handloom textile park

Aero park Medak Textile park

Auto park Anantpur Textile park

IT parks (three) Guntur Food processing park

Khammam Food processing park

Sircilla, Karimanagar Textile park Mahabubnagar Textile park

Vijayawada, Krishna Auto component Visakhapatnam, Vizianagaram, East Godavari

Petroleum. Chemicals and Petrochemicals Investment Region (PCPIR)

IT park Nellore Food processing park

Upcoming specialised parks



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Industry Name of the park, location Brief description

Life-sciences

Agri-science park The State Government and ICRISAT have jointly set up an agri-science park at the ICRISAT campus to support the growth of agri-based biotech industry in the state.

Jawaharlal Nehru Pharma City (JNPC)

JNPC project is being developed at Parwada, Visakhapatnam, at an estimated cost of US$ 73.17 million through a PPP model between the State Government and Ramky Pharma City (India) Limited. Infrastructure includes water supply, hazardous waste management facilities, effluent treatment plants, power and street lighting.Designed by JTC - Jurong Corporation of Singapore, it has a saleable area of 1,420 acres and the remaining 700 acres would have common facilities and utilities with green areas and open spaces in the park. About 600 acres have been earmarked for setting up a Pharma SEZ.

Sector-specific industrial parks … (1/2)



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Industry Name of the park, location Brief description

Apparel and textile

Apparel Export Park The park is spread over 172 acres in Gundlapochampally; has units exporting to the US, the UK and other countries and for stores such as Wal-Mart and JC Penny.

Textile Park, Sircilla The park has been developed on 60 acres for providing facilities such as training centres, business resource centres, textile processing units, testing labs, CAD centres, common effluent treatment plants; has a 33/11 kV substation with uninterrupted power supply, assured water supply and single-window clearance for all approvals.

Textile Park, Pashamylaram Centre Government approved project under the Textile Centre Infrastructure Development Scheme. So far, 50 acres of land have been developed.

Brandix India Apparel City, Visakhapatnam

Set up in an area of 1,000 acres at a project cost of US$ 609.8 million by Brandix Lanka Limited. Commercial operations started in January 2007.

Apparel Export Park, Visakhapatnam

Project developed on 146 acres of land for accelerated industry growth there.

Textile Park, Pamidi Proposed to be developed as a natural garment cluster with basic infrastructure facilities and skilled manpower.

Handloom Apparel Park, Pochampally

The Government has identified 50 acres on National Highway No 9 near the Pochampally Silk City and has approved the project at an outlay of US$ 810,000.

Sector-specific industrial parks … (2/2)



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E-seva Rajiv Internet Village AP online E-procurement

• Presence of e-governance initiative, which offers a wide spectrum of citizen-friendly services

• One-stop shop for services of various state and central government departments in an efficient, reliable, transparent and integrated manner

• Facilitates online transaction processing of payments, issue certificates, permits, licenses and many other services

• Launched by the State Government in August 2004, its objective is to bring government services/benefits closer to people living in rural areas.

• Further, it aims to provide computer literacy to at least one person in each family in rural areas

• Provides high bandwidth connectivity in rural areas

• E-governance: gateway for the State Government; offers multiple services through a single window to citizens

• Developed and launched by the Government in partnership with Tata Consultancy Services

• Facilitates online submission of forms including registrations, licences, permits, certificates and representations to different government departments.

• Facilitates online payments for utilities, taxes, fee, deposits and stamp duties.

• Automates procurement and purchase procedures—spanning from demand aggregation to procurement and fulfilment—of the State Government. Presently, the portal is servicing 29 government departments, 39 public sector undertakings, four universities and 127 urban local bodies.

• Over 61,000 tenders with work amounting to US$ 26.3 billion have been handled through the portal.

Source: "Mauritius pact with State Government", Eprocurement website, www.eprocurement.gov.in

Virtual infrastructure



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Contents







45

Industrial Investment Promotion (IIP) Policy, 2005-10

Objectives:

• Promote Andhra Pradesh as an attractive destination for industrial investments.

• Market Andhra Pradesh as competitive investment destination for foreign Investments.

• Create enabling environment for ensuring maximum value addition to the locally available resources.

• Withstand global competition with emphasis on technology up-gradation and protecting Intellectual Property Rights

• Arrest environmental degradation.

• Encourage cluster concept to make the industries globally competitive.

• Develop effective regulatory mechanism for entry and operation of firms.

• Create a market driven environment with the private sector being the primary engine for growth.

Key mission:• To make Andhra Pradesh a strong base for manufacturing sector

• To increase industrial investment by 10 per cent annually to reach US$ 3.8 billion by 2010

• To contribute to the GSDP from industrial sector to be increased from 12.9 to 15.0 per cent

• Create additional employment opportunities and improve exports from the state by increasing the present share of exports in India from 4.4 to 10 per cent by 2010

• Rural Industrialization with emphasis for promoting cottage and micro enterprises.

Sector-specific policies … (1/11)


STATE POLICIES AND INCENTIVES

46

IIP Policy, 2005-10 (continued)

Incentives:

For small-scale industries (SSI), tiny units and women entrepreneurs:• 100 per cent reimbursement of stamp duty on purchase of land for industrial use, lease shed and/or buildings, financial deals and

mortgages.

• 25 per cent rebate in industrial estates/ industrial development area, limited to US$ 12,195.

• Reimbursement on power at US$ 20,000 per unit in the first year.

• 15 per cent investment subsidy on fixed capital investment subject to a maximum of US$ 36,585.

• Additional 5 per cent subsidy on fixed capital investment limited to US$ 12,195 for scheduled castes and tribes.

• 25 per cent of the tax paid during one financial year will be given back as a government grant for tax payment next year.

• Benefit will be available for five years from the date of commencement of production, i.e., up to the sixth year..

• 3 per cent interest subsidy on prime lending rate on term loan, subject to a maximum of US$ 12,195 per year for five years .

• 5 per cent of project cost to SSI units of entrepreneurs belonging to the scheduled castes and tribes, limited to US$ 12,195.

• 8 per cent subsidy on capital equipment for technology up-gradation.

• 50 per cent subsidy for quality certification, limited to US$ 2,439; also available to existing units.

• 25 per cent subsidy on specific cleaner production measures, limited to US$ 12,195; also available to existing units.

• 50 per cent subsidy on the expenses incurred for patent registration limited to US$ 12,195.




47

IIP Policy, 2005-10 (continued)

Incentives:

For large- and medium-scale industries and mega projects:• In addition to stamp duty, rebate on land, power, commercial tax, quality certification, cleaner production and patent,

registration charges, an investment subsidy of 15 per cent on fixed capital investment is available, subject to a maximum of US$40,000.

• Roads, power and water to units contributing 50 per cent of cost of infrastructure from IIDF with ceiling of US$ 243,902.

• Special package of fiscal benefits on a case-to-case basis for existing units or projects.


Sources: Andhra Pradesh Industrial Investment Promotion Policy 2005-10, Project Vikas- NMCC website, http://nmcc-vikas.gov.in



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Information and Communications Technology (ICT) Policy, 2005-10

Objectives: To transform the state into a knowledge society and make available the benefits of IT to all citizens, especially, those in rural areas and living in poverty; to become a leading destination for investments in ICT and a major player in the information economy.

Key initiatives and targets:

• To achieve a US$12 billion IT hardware and electronics manufacturing industry.

• AP Technology Services Limited (APTS) to function as a specialised agency for all e-governance initiatives in close coordinationwith the Directorate of Electronic Delivery of Services (EDS) and the Institute for Electronic Governance (IEG).

• To expand the existing programme of training of chief information officers (CIO) and develop links with leading institutes such as the ‘JF Kennedy School of Government’ at the Harvard University and the ‘Civil Services College’ in Singapore for offering specialised programmes in e-governance and other related institutions.

• The AP Broadband project to provide affordable bandwidth to citizens, businesses and government entities in Andhra Pradesh. It is proposed to establish the network with threshold bandwidths of 10 gbps at the district level, 1 gbps at the mandal level and 100 mbps at the village level. The network will be established under the PPP mode.

• “Rajiv Internet village” is an innovative project of rural kiosks for delivering a host of government-to-citizens and business-to-citizens services and computer training for e-literacy.




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ICT Policy, 2005-10 (continued)

Incentives:

• Power: it is classified under industrial units for the purpose of levying industrial power tariff.

• Rebate on cost of land: IT/ITeS companies establishing their own facilities on clear government land are eligible for a rebate in cost of land calculated at the rate of US$ 487.80 per job created. This rebate in not available on acquired land.

• Stamp duty: 100 per cent reimbursement of stamp duty, transfer duty and registration fee has to be paid by the IT and telecommunication companies.

• Zoning regulations and special stipulations for IT parks on private land and IT campus: IT/ITeS units will be exempt from the zoning regulations and from the payment of conversion fee.

• Urban land ceiling (ULC) exemption: private land-owners will be allowed exemption under ULC for development of IT parks with a minimum of 25 acres in the periphery of city limits and beyond. Units with a minimum of 5 acres within city limits will be eligible for ULC exemption, subject to payment of prescribed fee.

• Training incentive: an incentive of US$ 48.78 per candidate will be provided to training centres which successfully train candidates in communication and soft skills, and provide employment in reputed IT/ITeS companies.

• Reimbursement of patent filing and partial reimbursement of quality certification costs.




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ICT Policy, 2005-10 (continued)

Incentives for small and medium enterprises (SME), tier-II cities and mega projects:

• The package is meant for IT units with a turnover of less than US$ 2.43 million and more than US$ 240,000 per annum.

• Power: rebate of 25 per cent on power tariff in the first three years of operations and conversion to industrial power tariff.

• Exhibition subsidy: reimbursement of 50 per cent exhibition subsidy for participating in international exhibitions, limited to 9 sq , of space, with respect to stall rent payable for participation in international events notified by the Information Technology and Communications (ITC) Department IT&C.

• Allotment of land: Government will endeavour to reserve land for preferred allotment to small and medium enterprises (SME) inother locations. Criteria for allotment will be prepared separately.

• IT exporters associations: Government will support associations such as HYSEA, NASSCOM, STPI, IEG or any such organisation (as decided by the committee) in creating libraries for making available materials on trends in technology, market intelligence,research reports and analysis, etc., by contributing US$ 24,000 per annum for development of the SME sector.

• US$ 24,000 as recruitment assistance for employing minimum 100 employees in IT and 200 employees in ITeS within one year of commencement of commercial operations in Hyderabad or within 50 km of Hyderabad. This incentive will not be available if the incentive rebate on cost of land is availed.

• US$ 36,000 as recruitment assistance for employing minimum 100 employees in IT and 200 employees in ITeS within two years of commencement in the tier-II cities.

• A special package of incentives will be offered to mega projects. Such projects will be defined as projects creating employment for more than 1,000 persons in the case of IT and 1,500 persons in the case of ITeS. An investment of above US$ 12.195 million will be considered as a mega project.




51

Electronic Service Delivery Policy, 2003

Aim: To evolve a comprehensive and generic policy that permits rapid growth of electronic delivery of services under e-governance projects such as e-Seva, APonline, e-Procurement, CARD and i-Community.

Key provisions and incentives:

• To adopt new and more efficient, cost-effective delivery channels with suitable interfaces for backward integration.

• The Government to establish a standards-based e-government Gateway to enable the various service providers to interact with the backend databases and applications of various government departments and agencies and provide cost-effective services to the citizens and businesses.

• To avoid the problem of limited suitability of all the delivery points and channels for delivering all the services, those services involving checking of documents, issue of certificates, licenses needing authentication, etc., to be done at departmental outlets and/or e-Seva centres.

• For sustaining various citizen-service projects and initiatives, it is necessary that the concerned partner, vendor or entrepreneur is compensated on a ‘per transaction’ basis. The transaction cost could be met either by the government department/agency or by the customer, depending on the nature of the service.

• The following principles are to be adopted in this regard:

• No user charges to be collected from the citizen in respect of payment for utility bills and taxes, irrespective of the deliverychannel. The concerned department or agency will pay the service charges to the service providers.

• In respect of other services such as information services, interactive services like online filing of forms, form submission andissue of certificates, a charge of US 11 cents to US 33 cents to be payable by the customer to the operator of the Service Delivery Point (SDP).

• The revenue sharing between the SDP, service providers and the government department to be mutually agreed between the various parties involved and specified in a Service Level Agreement (SLA).




52

Biotechnology Policy, 2001

Objectives: To undertake a detailed inventory evaluation of the bio-resources in the state; to encourage research and development (R&D); to develop high-quality infrastructure and provide special incentives to biotech industry.

• To create an enabling environment and simplify procedures; to facilitate the flow of venture capital funds and address issues such as Intellectual Property Rights (IPR).

• The thrust areas identified include diagnostics, therapeutics, pharmaco-genomics, bioinformatics, agriculture biotechnology, industrial biotechnology, inputs to the industry (hardware suppliers – instrumentation and chemicals), marine biotechnology, forest and environment-focussed biotechnology, contract research in all areas of biotechnology and related areas.

• The strategy adopted involves encouraging R&D, developing infrastructure, providing incentives, land and grants for training institutes and housing, mega projects, developing adequate human resources, creating an enabling environment, funding biotechactivities, and protecting IPR.

• The Andhra Pradesh Government is working on a new biotechnology policy.




53

Biotechnology Policy, 2001 (continued)

Key Incentives:

A sales tax of just 1 per cent for “high-end” biotech products manufactured by units located in – the Biotech Park at Turkapallivillage, Shamirpet mandal, Ranga Reddy district and others – applicable for a period of seven years from the date of commencement of commercial production of a biotech unit and up to March 2010 and for units commencing operations before March 2006.

Government of Andhra Pradesh to provide government land on lease or as equity to other Biotech Parks, if the site is found suitable for such projects. Rebate to be provided for in the cost of government land allotted to a bioinformatics company at US$440 per job created, subject to some conditions.

Bio-informatic centres to be permitted to be established without any location restrictions. They can be established in residential, commercial or industrial zones. Companies setting up Bioinformatics Centres in the Genome Valley will get a rebate of US$ 660per job created, subject to the value of a maximum of 2 acres of government land and 100 per cent exemption from registrationand stamp duties. Similar incentive to be provided to the bio-informatic units to be set up in Biotech Parks.

The biotech industry is exempt from the purview of statutory power cuts; industrial power tariff (and all other admissible incentives and concessions for industry) to apply.

General permission to be accorded to run a three-shift operation to the biotech industry (subject to Government of India concurrence); permit flexibility in the opening and closing times and in the weekly holiday of a biotech unit by amending relevant provisions of the A.P. Shops and Establishment Act; exempt biotech units from the provisions of Contract Labour Act 1970, in so far as non-core activities are concerned; set up exclusive Special Industrial Tribunals for Biotech Parks to give top priority to the settlement of disputes that may arise in units located in the Biotech parks.




54

Tourism Policy, 2006

Objectives: To create a unique selling proposition and a brand image for the state; to ensure deserved positioning on the tourism map of India and the world; to create and differentiate tourism products across segments such as eco-tourism, pilgrimage, heritage, business, sports, spiritual, health, leisure and rural tourist; to provide incentives and concessions to tourism projects to be set up in special tourism areas with assurance on features such as sustainable employment generation, promotion of rural tourism andcommercially viable projects; to develop the sector through public private partnerships (PPP); to adopt a single-window clearance system.

Incentives and concessions:

• Concession on allotment of land on a long lease of 33 years. For mega projects, the lease period to exceed 33 years and leaserent shall be 10 per cent of market value, subject to review every five years.

• Investment subsidy of 20 per cent of project cost and 15 per cent for up-gradation of existing hotels, limited to US$ 48,000.

• 100 per cent reimbursement of stamp duty and transfer fee on purchase of land or lease of land meant for the project.

• Reimbursement of 25 per cent of value-added tax and luxury tax paid for a period of five years.

• Reimbursement of 25 per cent of entertainment tax for multiplexes in theme parks and urban entertainment centres for a period of five years, limited to 100 per cent of the project cost for projects more than US$ 1.219 million and located in notified tourism areas or special tourism areas.

• Floor area index relaxation, and automatic conversion/exemption from land-use zoning regulations.

• Market development assistance scheme for promotional activities




55

Textile and Apparel Policy, 2005-10

Objectives: To generate employment opportunities for an additional 1.5 million persons in the sector by 2010; to increase exports to US$ 5 billion to US$ 6 billion by 2010; to set up apparel exports and textile parks in clusters with state-of-the-art technology to attract investors, promote exports and generate employment opportunities; to introduce the system of PPP and special incentives to high value and high employment-generation projects.

Incentives:• All the incentives provided in the Industrial Investment and Promotion Policy are automatically applicable to textiles and apparel

units.


Fresh Food Policy, 2005

Incentives:• Reimbursement of cost of power to be extended for a period of five years from April 2005.

• Food processing units that commenced commercial production after November 14, 2003, are eligible for reimbursement of power costs.



56

Company logos cited in this section are registered trademarks of the respective companies.


Contents







57

IT and ITeS

• Andhra Pradesh has had a steady growth in IT/ITeSexports, recording a 24.5 per cent growth in 2008-09 against the national average of 20.7 per cent.

• Total exports were about US$ 5.1 billion in 2008-09 against US$ 5.6 billion in 2007-09.

• There are 69 IT and ITeS companies registered under Software Technology Park (STP) scheme, including nine foreign companies.

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

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

• The total employment generated by the IT sector in 2008-09 increased by 12,768 for the STP and SEZ units.

Key players

• Mahindra Satyam

• Microsoft

• Cognizant

• Genpact

• Intergraph

• CSC

• Zensar

• iGate

• Patni Computers

• IBM

• Sonata Software


BUSINESS OPPORTUNITIES

58

IT/ITeS – company profiles … (1/4)

Mahindra Satyam Formerly, Satyam Computers, Mahindra Satyam was established in 1987 and has its global headquarters at Hyderabad and several offices in 38 countries including India. The company provides software solutions to over 370 customers including four of the top ten electronics and electrical equipment manufacturers, three of the top ten in aerospace and defence, two of the top five chemicals manufacturers and four of the top five networking and communications equipment manufacturers.

Microsoft Established in 1998, the Microsoft India Development Centres (MSIDC) is located in Hyderabad on a 42-acre state-of-the-art campus and employs around 1,500 employees. The company focuses on strategic and IP sensitive product development for Microsoft. It is Microsoft’s largest software development centre outside the US. It has established centres of excellence for storage, networking and mobility, and has filed around 220 patents, since establishment in Hyderabad.

Genpact Genpact is a leading BPO company. It has three facilities in Hyderabad providing diverse specialised services in domains of IT infrastructure management, enterprise applications, procurement and supply chain services, finance and accounting services, and customer service to Genpact clients across the globe. The State Government allotted about 50 acres of land to Genpact in 2007-08 to set up an IT SEZ in Hyderabad.

Cognizant Founded as a captive arm of Dun & Bradstreet with headquarters in the US and operations in India, Cognizant now has over 50 development centres (including one in Hyderabad) and 25 regional sales offices, globally. Its services include business process outsourcing,, application and IT infrastructure services and business consulting. In December 2009, Cognizant invited 120 personnel working in Invensys Rail, at Hyderabad, to work on its recent global product research and development tie-up with the latter.



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Zensar Technologies Zensar technologies is an Indian company for IT enabled services with 20 offices around the world and three delivery centres, one of which is located at Hyderabad. Zensar provides end-to-end services from IT development to business process Zensar has a strong engagement with Oracle, being their worldwide certified partner with a 750+ consultants team; and in the SAP space offering focused template solutions in key verticals of dairy, textile, pharmaceuticals, manufacturing and IT/operations and being the largest partner in certain key segments and markets.

iGATE Global Solutions Limited

iGATE is an ITeS, consulting and BPO services provider. Registered in the US, iGATE has 34 offices across 16 countries. The company has delivery centres in the US, UK, Canada, China, Malaysia and India. In Andhra Pradesh, it has an office at Hyderabad.

Patni Computers Patni Computers is one of the leading global providers of IT services and business solutions. Of the total 22 global delivery centres of Patni, three are located at Hyderabad.

IBM IBM is a leading global IT services and solutions provider with offices across the world. The company’s India operations’ products include software, storage, systems and servers, semiconductors, etc. IBM has been present in India since 1992. Since inception, IBM in India has expanded its operations considerably with regional headquarters in Bengaluru and offices in 14 cities including a global delivery centre in Hyderabad. According to the analyst and IT market research firm, Springboard Research, IBM emerged as the largest player with a 10.8 per cent share of the Indian IT services market in 2008.



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IT/ITeS – company profiles … (3/4)Sonata Software Incorporated in 1994, Sonata's services include IT consulting, product engineering services,

application development, application management, managed testing, infrastructure management, packaged applications and travel solutions. As per the industry rankings released by NASSCOM for 2008-09, Sonata Software figured among the “Top 20 IT Software Services Exporters” in India for the second consecutive year. Headquartered in Bengaluru, Sonata has a development centre at Hyderabad.

Tata Consultancy Services (TCS)

A company of the TATA group of India , TCS is a well recognised global service provider for a wide range of IT solutions, consulting, BPO, engineering services and IT infrastructure . The company has offices across the world at more than 40 countries including 78 locations in India. It has five centres/offices at Hyderabad, one of which serves as its innovations lab. TCS employs around 5,000 persons in Hyderabad. The company signed a memorandum-of-understanding (MoU) with the Government of Andhra Pradesh to acquire 75 acres of land to develop a state-of-the-art development facility near the new international airport in Hyderabad. TCS will invest up to about US$ 85 million in the facility to create a capacity of 15,000 seats at Adibatla, a part of APIIC promoted SEZ.

Ikanos Communications Headquartered in the US, Ikanos has offices around the world to service a global customer base. Most of the company's engineering and research is conducted at Toronto (Canada), Bengaluru and Hyderabad. Ikanos develops robust, high performance semiconductor and software products. The company is a solutions provider to many of the world’s leading network-equipment manufacturers and telecommunications service providers, with more than 330 million ports shipped to date.

HCL Incorporated in 1976, HCL is a leading global technology and IT enterprise with annual revenue of US$ 5 billion. The company’s operation span 26 countries. Has delivery facilities in the US, UK, Finland, Poland, Puerto Rico, Brazil, China, Malaysia, Singapore, Australia, Czech and India. In India, the company has offices in 170 cities and 500 points of presence reaching 4,000 towns. In Andhra Pradesh, HCL has offices located at Hyderabad and Vijayawada.



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Intergraph As a leading global provider of spatial information management (SIM) software, Intergraph Corporation fuses geospatial technology to security, helping some of the world's largest government, military, and industrial organizations in more than 60 countries better manage their operations and safeguard their infrastructure. In India, Intergraph Consulting Private Limited is a 100 per cent owned subsidiary of Intergraph Corporation. Incorporated in 1987, Intergraph Consulting is a strategic offshore development centre engaging in product development, customization, research and development serving Intergraph customers worldwide. It has its India office at Secunderabad, Hyderabad.

CSC A US-based company, Since 1991, CSC has expanded its India operations to productively respond to the needs of their customers, worldwide. Recent acquisition s like that of Covansys and expansion activities have increased CSC’s development and delivery centers to seven locations in the country including Hyderabad. In India, the company offers to clients worldwide, high-value technology solutions including applications development and product support, infrastructure and BPO services.



62

Pharmaceuticals and biotechnology

• Hyderabad is the hub of the bulk-drugs industry, accounting for one-third of the national production of bulk drugs. The state produces a majority of 500 basic drugs produced in the country.

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

• The industry accounts for 43 per cent of the total biotech revenue generated by companies in south India (US$ 1,104 million).

• The State Government has helped develop the pharmaceutical and biotechnology industry through specific policies promoting knowledge-based cluster approach with financial incentives and appropriate infrastructure support.

• Presence of related educational infrastructure has also helped the industry. The biotechnology incubation centre was commissioned in late 2008.

Key players

• Dr Reddy’s Laboratories

• Aurobindo Pharma

• AMRI

• Novartis

• Nektar

• Shantha Biotechnics

• Vimta Labs

• Indian Immunologicals

• Parexel

• Biological E.

• Bharat Biotech

• Indigene



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Dr Reddy’s Laboratories Limited (DRL)

Established in 1984, Dr Reddy’s ranks among the top 15 generics players in the world. It is the first pharmaceutical company in Asia-Pacific (outside Japan) to be listed on the New York Stock Exchange (NYSE) and has presence in 35 countries with operations in over 115 countries. Overseas business contributes around 86 per cent of the total revenue. Aspires to become a discovery-led global pharmaceutical company and one of the top 10 generic companies in the world. Present in the therapeutics category: anti-infectives, cardio-vascular (CVS), diabetes, dermatology, pain management, nutritional, dental, urological and oncology.

Albany Molecular Research Inc (AMRI)

AMRI research centre is located in Hyderabad in the ICICI Knowledge Park. Established in 2005. Provides custom synthesis of scaffolds and building blocks, as well as preparation of reference standards. A second laboratory for preparing larger amounts of pharmaceutical intermediates, starting materials and other compounds is now operational as well. The Centre's operations are fully integrated with US-based resources.

Pharmaceuticals and biotechnology – company profiles … (1/7)



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Novartis Novartis has presence in over 140 countries and employs 97,000 people. Has been present in India for the last 60 years in healthcare sector. Setting up its healthcare-related IT/ITeS and R&D facility in Hyderabad. The company plans to make Hyderabad its back office hub for data management in clinical research and financial service segments. The company is planning to invest US$ 73 million in the facility spread across 150 acres of land.

Aurobindo Pharma Aurobindo is one among the vertically integrated pharmaceutical companies in India. It has a product portfolio spread over major product areas encompassing CVS, central nervous system (CNS), anti-retroviral, antibiotics, gastro-enterologics, anti-diabetics and anti-allergic with approved manufacturing facilities by the United States Food and Drug Administration (USFDA), UK Medicine and Healthcare products Regulatory Authority (UKMHRA), World Health Organisation ( WHO), Medicine Control Council of South Africa (MCC-SA), ANVISA-Brazil for both APIs and formulations and has global presence with own infrastructure, strategic alliances, subsidiaries and joint ventures. Along with a registered corporate office at Hyderabad, it has overseas branch offices at Ghana, Ethiopia, the UK, Vietnam and Hong Kong.




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Anu’s Labs Anu's Laboratories Limited is an ISO 9001:2000 certified company established in 1996, engaged in manufacturing of quality drug intermediates to meet the needs of international customers. The optimized process of 2,4-Dichloro-5 fluoro-acetophenone has enabled the brand to establish itself as the flagship product of the organization. It is available to our wide customer-base as a competitive product of the highest quality. Other high quality intermediates such as chlorohexanone, 1,3-dibromo propane is also manufactured by the company along with methyl-4 (4-chloro 1-oxo butyl) a, a di-methyl acetate. It has a state-of-the-art research and development facility, located at Balanagar, Hyderabad, that supports product development, contract research and customised synthesis programmes of the organization.

Natco Pharma Limited Natco, which began its operations as a single unit with 20 employees, today, has four manufacturing facilities and employs around 1,500 people. It has an on-line data for analysis and decision making. It was ranked 82nd in sales among Indian pharmaceuticals companies in 1994. NATCO also has the credit of being one of the largest contract manufacturers in India. The company has headquarters at Hyderabad.

Suven Life Sciences Limited The company develops and supplies pharmaceutical and agro-chemical intermediates for New Chemical Entities (NCEs) and APIs. The company's manufacturing facilities include fine chemicals, pyrimidines, purines, imidazoles, indoles and specialty intermediates. Suven's main thrust is in Contract Research And Manufacturing Services (CRAMS) which is serving as many as 22 global life sciences and fine chemical companies.

Suven Life Sciences USA LLC, its wholly owned subsidiary, recently acquired the assets of the New Jersey-based Synthon Chiragenics Corporation, the global player in carbohydrate-based Chiral technology for pharmaceuticals.




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Divi’s Laboratories Divi’s is a leading manufacturer of active pharmaceutical ingredients (API). The company has a state-of-the-art multi-purpose plant at Choutupal, in Nalgonda district, and a second plant at Visakhapatnam. The company is among the top 10 producers of naproxen in the world and 90 per cent of the products is being exported to several countries, including the US and Europe. Divi’s also exports dextrome thorphan, iopamidol, nabumetone, phenyle ephedrine and phenprocumar.

Matrix Labs Matrix has a USFDA-approved facility located at Hyderabad, and has a strong presence in central-nervous-system drugs, quinolone anti-bacterials, anti-retrovirals and anti-histamines. Focusing , mainly, on synthetic research and process development. Matrix has six laboratories with a team of 70 scientists. The company's major customer spread is across 80 countries. It has three API facilities at Hyderbad and one at Visakhapatnam. In January 2007, Mylan Inc of the US acquired controlling stake in the company, following which Matrix has now become a subsidiary of Mylan.

Hetero Drugs Headquartered in Hyderabad, Hetero Drugs made a mark being the first in Andhra Pradesh to produce all the anti-retrovirals: indinavir sulphate, nelfnavir, efavirenz, lopinavir, ritonavir, lamivudine, zidovudine , stavudine and abscavir sulphate. The company markets its products to over 50 countries and, recently, penetrated the regulated markets in US, Canada and Europe. In 2005, it was awarded a licence to make generic oseltamivir, Tamiflu. The Swiss firm, Roche, licensed it to make a generic version of the drug. Hetero Drugs is the parent company in the Hetero group of companies and other companies which are part of the group are Hetero Labs, Hetero Research Foundation, Symed Labs Limited, Cirex Laboratories, Genx Laboratories and also foreign subsidiaries such as Invagen Inc, in USA and Richmond Labs in Argentina, etc. Also, now, Hetero has its own retail chain of pharmacy outlets in India named, Hetero Pharmacy.




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Neuland Laboratories Neuland has two world-class manufacturing facilities on the outskirts of Hyderabad. The company claims to be the largest manufacturer of albuterol sulfate in the world with USFDA approval and Certificate of Suitability from the European Department for the Quality of Medicines, Council of Europe. It has also a US FDA approved manufacturing facility for ranitidine HCl Form1, ciprofloaxcinand latnoprost. The company exports to over 65 countries worldwide, including USA, Canada, Europe, Latin America, Korea, Japan, Australia and South Africa.

Nektar Nektar Therapeutics is a leading biopharmaceutical company developing a robust pipeline of novel therapeutics based on its advanced polymer conjugate chemistry technology platform. Nektar also partners with the top biopharmaceutical companies to bring new products to market. To date, Nektar's technology and drug development expertise have enabled nine approved products for partners, which include leading biopharmaceutical companies. Headquartered in the US, Nektar's R&D facility is located in Secunderabad, Andhra Pradesh.

Glochem Industries Limited (GIL)

Glochem is a public limited company manufacturing bulk drugs, drug intermediates and specialty chemicals. GIL has tie-ups with companies in India and abroad, including the US and Europe, for contract manufacturing and custom synthesis. GIL has been developing, manufacturing and delivering tailor-made fine chemicals and intermediates for the leading pharmaceutical and fine chemical companies on exclusive basis. It is based in Hyderabad.

Shantha Biotechnics A pioneer in the field of biotechnology, Shantha Biotechnics is the first Indian company to develop, manufacture and market a recombinant human healthcare product in India. Shantha is currently focused on developing generic biologicals, novel therapeutic antibodies, proteins and vaccines. It has also started exploratory research in the fields of oncology, infectious diseases and platform technologies. SHANVAC- B is the first Indian Hepatitis-B vaccine to pre-qualify for WHO approved supply to UN agencies, globally. Today, Shantha caters to major international markets including Asia-Pacific, Africa, (Commonwealth of Independent States) CIS and Latin America in addition to the United Nations Children’s Fund (UNICEF) and Pan American Health Organisation (PAHO). Based in Hyderabad, Shantha Biotech became a part of the Sanofi-Aventis group in July 2009.




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Vimta Labs Vimta Labs is India’s leading contract research and testing organization. Established in 1984, Vimtanow serves several market leaders across the globe. The company has a team of 707 professionals comprising 442 scientists in various disciplines such as chemistry, pharmacy, medicine, microbiology, molecular biology and informatics. The team is slated to double in next three years. VIMTA is a multi-site organization with more than 300,000 sq ft world-class laboratory facilities. Its facilities in Andhra Pradesh include a life sciences campus and central laboratory at Hyderabad along with Clinical Laboratories at Visakhapatnam.

Indian ImmunologicalsLimited (IIL)

IIL produces a range of veterinary vaccines such as foot -and -mouth disease (FMD) vaccine, anti-rabies vaccine, bacterial vaccines, canine vaccines and a host of other combined vaccines. IIL's range of human vaccines comprises of rabies, Hepatitis B, measles, MMR and DPT. It has one of the leading research and development centres in India. The company has headquarters and manufacturing facilities in Hyderabad, an institute in Ooty and an overseas office in Viet Nam.

PAREXEL Over the past 25 years, PAREXEL has developed significant expertise to assist clients in the worldwide pharmaceutical, biotechnology and medical device industries with the development and launch of their products in order to bring safe and effective treatments to the global marketplace for the patients who need them. Headquartered near Boston, Massachusetts, PAREXEL operates in 69 locations throughout 52 countries around the world, and has approximately 9,000 employees. It has offices located at Hyderabad and Bengaluru and offers contract services in clinical evaluation through to commercialization and medical marketing to device industries.

Bharat Biotech International Limited (BBIL)

BBIL is a multidimensional biotechnology company specialising in product-oriented research, development and manufacturing of vaccines and bio-therapeutics. BBIL's state-of-the-art manufacturing plant is the largest of its kind in Asia-Pacific. The first bio-pharma facility in the country to be audited and approved by the Korean Food & Drugs Administration (KFDA), it is located at the Genome Valley, Hyderabad. Built with an investment of over US$ 22 million , the facility's manufacturing, control procedures and protocols, conform to the stringent standards laid down by internationally recognized institutions such as USFDA and WHO.




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Biological E. Limited Biological E. manufactures sera and vaccines, oncology drugs, cardio-vascular, bulk drugs, formulations and herbal products. The company has established alliances with world-renowned pharma companies such as Evans Medical of the UK, Solvay & Cie of Belgium (veterinary products), Pasteur Meraux Connaught of France (sera and vaccines) and ICI, an exclusive marketing tie-up for animal health products. Biological E. Limited has several firsts to its credit. It was the first pharmaceutical company to manufacture anti-TB drugs in India and the first private sector vaccine manufacturer in the country. The company is investing approximately US$ 50 million towards the development and expansion of infrastructure. State-of-the-art equipment is being installed in all locations to meet the US FDA and European MEA standards in manufacturing, quality control and pre-clinical activities. Another project underway is the modern biotech facility, with an investment of Rs. US$ 21.7 million at the Genome Valley.

Indigene Indigene Pharmaceuticals is a biopharmaceutical company focused on designing, developing, and delivering prescription and consumer healthcare products. The company has offices in the US, Hyderabad, Canada and Switzerland.

Krebs Biochemicals & Indisutries Limited (KBIL)

KBIL was established in the year 1991 as a public limited company with the objective of establishing commercially viable biotech processes with applications in medicine and agriculture industries. The company has pioneered in fermentation technology over the last decade. KBIL manufacturing Unit-I is located at Regadichelika village of the Nellore district. Products manufactured from Unit-I facility are ephedrine, pseudoephedrine and their salts, which are used for making formulations for respiratory ailments, viz., cough and cold .




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Apparel and textiles

• The state is a leading producer of cotton, with a production 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 predominantly grown 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 metres of 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 metres of 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 potential products by the state. It aims to achieve, annually, US$ 6 billion in textiles exports, and US$ 2 billion in handloom exports 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.



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• 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 22.9 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.

• 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 targeted at around US$ 39.02 billion.

Agri and processed food sector

Key players

• CongAgra Foods

• Kraft foods

• ITC

• APDDCF

• Cargill

• Ushodaya Enterprises



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CongAgra Foods ConAgra Foods, US is one of the world’s leading food companies; it has partnered with ITC Agro and established an R&D centre to adapt food technologies to Indian conditions. The company is now a US$ 320 million entity with a dominant market position in the edible oils and branded foods sectors. Edible oil brands include Sundrop, Healthy World, ACT II and Rath.

Cargill Cargill maintains a number of businesses in India, with operations including the handling and processing of a wide range of products, including refined oils, grain and oilseeds, sugar, cotton and animal feed. In addition, Cargill’s presence in India has been growing since it began a joint venture operation in 1987. In 2006, Cargill entered into a joint venture and subsequently owned a leading shrimp feed manufacturing farm in Rajahmundry. It has also entered a joint venture project to set up a sugar refinery in the state.

ITC Limited ITC is a large Indian business conglomerate with diverse business interests including agri-foods, paper, fast moving consumer goods, lifestyle and retailing and hotels. A substantial part of ITC’s agri-business is located in Andhra Pradesh. The company has one unit each at Anaparti and Chirala and a research centre in Rajamundhry. The company also runs its innovative internet based “e-choupal” initiative in the state for the benefit of the farmers.

Agri and processed food sector – company profiles … (1/2)



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Andhra Pradesh Dairy Development Cooperative Federation (APDDCF)

APDDCF runs 12 dairy plants and manufactures milk products under the Vijaya brand name. These plants together have a capacity of 2,437 litres per day. Products include butter, UHT milk, milk powder, ghee, flavoured milk, khoa, kulfi and processed cheese. It is one of the 15 dairy cooperatives operating under the National Dairy Development Board (NDDB).

Ushodaya Enterprises Established in 1980, the company manufactures products such as pickles, fruit and vegetable purees, instant food mixes, etc., under the well known brand name – Priya. Headquartered in Hyderabad, the Ramoji group company uses technology and is actively involved in research and development of food products.

Kraftfoods Multinational branded food and beverages company, Kraft Foods, established a soft drink manufacturing plant in Andhra Pradesh in 2001 and is currently working on a new agronomy project.

Agri and processed food sector – company profiles … (2/2)



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Forestry Fisheries

• In 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 GSDP was estimated at US$ 412 million in 2006-07, a 7 per cent increase over 2005-06.

• 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 was an estimated to touch 1.4 million tonnes in 2008-09 as against 1.3 million tonnes in West Bengal, making Andhra Pradesh the 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 Pradesh is already the top producer of brackish water shrimps in the country.

• The contribution of fisheries to GSDP in 2006-07 was estimated to be US$ 1,600 million, a 6 per cent increase over 2005-06 .

• The Andhra Pradesh 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 Limited (APMFD) while WTDI will invests the remainder. The balance US$ 11.5 million will be taken as term loans from banks.

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, news publications

Agriculture and allied industry … (1/2)



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Agriculture and allied industry … (2/2)

Animal husbandry

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

• Providing gainful employment to a large number of small and 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.



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Petroleum, chemicals and petrochemicals• According to the Petroleum Ministry’s provisional figures for 2008-09, the net natural gas production

was about 1,515 million cu m. The state’s 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 the Central Government’s New Exploration Licensing Policy (NELP).

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

• Hindustan Petroleum Corporation’s 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.

• In October 2009, the Department of Petroleum, Government of India, signed a memorandum of understanding with the Andhra Pradesh Government for setting up a petroleum, chemicals and petrochemicals investment region (PCPIR) in the Visakhapatnam-Kakinada region as an industrial cluster. The investments expected in the PCPIR are estimated to be around US$ 74.6 billion.



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Tourism

• Andhra Pradesh 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, ArakuValley, BorraCaves, Tirupati Balaji Temple, and Puttaparthi Saibaba, the state offers attractive investment opportunities to developers and investors.

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

• About 88 projects worth US$ 197.6 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$ 368.3 million.

• Nine projects have been sanctioned for the state by the Ministry of Tourism during 2008-09, 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.



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Tourism – upcoming mega projects

• Kadapa heritage circuit

• Tirupati heritage circuit

• Charminar area

Sources: Directorate of Tourism and Directorate of Economics and Statistics, Andhra Pradesh; Tourism statistics at a glance 2008, Ministry of Tourism website, www.tourism.gov.in



http://www.tourism.gov.in/�

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Leather

• 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.

• The 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$ 120,000 for technology up-gradation or/and expansion.

Leather Industries Development Corporation (LIDCAP)

LIDCAP is the nodal agency for leather industry development in the state.

Plans to establish71 mini-industrial parks on 25 acres of land for processing raw material; 16 medium industrial parks of 100 acres each for processing semi-finished leather; six mega industrial parks of more than 300 acres each including an international leather complex at Krishnapatnam (KILC).

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 has private participation in the SPV. KILC is located at Krishnapatnam in the Nellore district 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 and 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



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Mines and minerals

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

• The state’s 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 2008-09.

Contribution to national minerals production (%)

Barytes 94

Ball clay 63

Corundum 61

Diamond 40

Calcite 39

Mica 28

Garnet 26

Limestone 23

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



http://www.mines.nic.in/�

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Gems and jewellery

• Hyderabad is one of the leading hubs for the jewellery sector in India. The state produces a wide array of precious- and semi- gems as well as pearls.

• The AP Gems and Jewellery Park has been developed on an area of 2.5 acres in Hyderabad with an investment of around US$ 12.68 to US$ 13.90 million.

• The park is a joint venture 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 jewellers and pearl dealers.

Hyderabad Gems SEZ Limited (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.



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Other growth sectors … (1/2)

Hospitality and entertainment Leisure 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$ 50,000.

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

• The sector is attracting investments 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.

Name Promoters Project cost(US$ million) Location

Park Hyatt 7-Star hotel Gayatri Hi-Tech Hotels Limited 76.1 Banjara Hills, Hyderabad

Leela Palace Kempinsky hotel Hotel Leelaventure Limited 67.4 Hyderabad

Royal Orchid 5-Star hotel Royal Orchid Hotels Limited 65.2 Gachibowli, Hyderabad

Taj GVK Hotel Taj GVK Hotels & Resorts Limited 32.6 Hyderabad

Hotel projects under construction

Source: www.projectstoday.com



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Other growth sectors … (2/2)

Retail Electronic hardware Semiconductors

• Organised retail is catching up fast with significant mall development in the pipeline ; there are 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 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’.

• 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).

• An investment of US$ 3 billion has been announced for setting up a fabrication unit in the 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



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Major industrial projects being implemented

Project Sector Promoter Investment(US$ million) Location

Pranahita-Chevella lift irrigation scheme Irrigation Government of Andhra Pradesh 8,369.6 Bejjur, Adilabad

Krishnapatnam ultra-mega power project Power Coastal Andhra Power Limited 3,695.7 Krishnapatnam, Nellore

Krishnapatnam power project (1,600 MW) Power AP Genco 1,813.0 Nellore

Integrated steel project, Phase-I Steel Bramhani Industries Limited 978.3 Cuddapah

Galeru Nagari Sujala Sravanthi irrigation project

Irrigation Government of Andhra Pradesh 3,635.0 Cuddapah, Nellore, Chittoor

Solar energy equipment project (120 MW) Power X L Telecom Limited 782.61 Shamsabad, Hyderabad

Diesel hydro treater project - Visakh Refinery

Refinery Hindustan Petroleum Corporation Limited (HPCL) 782.0 Visakhapatnam

Polavaram irrigation project Irrigation Government of Andhra Pradesh 658.7 West Godavari

Greater Hyderabad growth corridor project Roads Hyderabad Growth Corridor Limited 652.2

Medak, RangaReddy

Godavari drinking water supply schemeWater supply

Hyderabad Metro Water Supply & Sewerage Board 652.2 -

Finished steel project Steel Rashtriya Ispat Nigam Limited 652.2 Visakhapatnam




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Key industrial projects being planned

Project Sector Promoter Investment(US$ million) Location

Hyderabad elevated-MRTS project Transport Hyderabad Metro Rail Limited 2,637.4 Hyderabad

Kakinada refinery project Refinery Kakinada Refinery & Petrochemicals Limited 3,260.9

Kakinada, East Godavari

Bhavanapadu coal-based power project Power East Coast Energy Private Limited 2,407.6 Srikakulam

Alumina refinery project Aluminium Jindal South West Aluminium Limited 1,956.5 Boddavara

Multi-product Industrial Park Industrial parkYeswanth Industrial Infrastructure Projects Private Limited

1,652.2 Perupalem

Alumina refinery project Aluminium National Aluminium Co Limited 1,521.7 -

Coal-based power project PowerSheshadri Power & Infrastructure Private Limited

1,521.7 Hindupur

Business complex Construction CBD Tower Private Limited 1,521.7 Hyderabad

Road up-gradation (Icchapuram-Srikakulam-Ankapalli-Rajahmundary) project

Roads National Highways Authority of India 771.7 Multiple locations

Kakatiya power project, Stage-II Power AP Genco 645.4 Warangal




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Contents







87

S No Approvals andclearances required Respective departments of state Estimated time

1 Registration, IEM, Industrial licenses Registrar of firms 7 days

2 Allotment of land/shed in industrial estates or industrial areas

Andhra Pradesh Industrial Development Corporation

7 days for up to 1,000 sq m

21 days for above 1,000 sq m

3 Acquisition and alienation of government lands

Chief Commissioner of Land Administration (CCLA) 45 days

4 Site and building plan approval

Panchayat Raj Department

7 daysUrban Development Authority

Town and Country Planning

Municipality

5 Change of land use

Urban Development Authority

45 daysTown and Country Planning

Municipality

6

Consent for establishment under pollution control

GreenAP Pollution Control Board

7 days

Orange 21 days

Red 45 days

Key approvals required … (1/2)


DOING BUSINESS IN ANDHRA PRADESH

88

Key approvals required … (2/2)

S No Approvals andclearances required Respective departments of state Estimated time

7Consent for

operation under

pollution control

Green

AP Pollution Control Board

7 days

Orange 21 days

Red 45 days

8 No-objection certificate for fire safety Fire Services Department 15 days

9 Excise registration Excise Department 14 days

10 VAT/CST Registration Commercial Taxes Department 7 days

11 Power feasibilityPower distribution companies

7 days

12 Power connection 23 days

13 Approval of factory plansFactories Department

7 days

14 Factory license 7 days

15 Sanction of water supply Hyderabad Metro Water Supply and Sewerage Board

7 days

16 Water connection 23 days

17 Permission to draw water from rivers and/or public tanks Irrigation Department 30 days



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Cost of doing business in Andhra Pradesh

Parameter Cost

Land price (US$ per sq m) 20 to 200

Labour (US$ per man year) 825 to1,250

Lease rent (US cents per sq ft) 36.6 to 61.0

Electricity (US cents per unit)Commercial: 15.8

Industrial: 9.8 to10.8

Residential rent (US cents per sq ft per month) 12.6 to 62.5

Five-star hotel room (US$ per night) 73.0 to 512.0

Water (US cents per 1,000 litres) Commercial: 50.0Industrial: 62.5

Sources: Andhra Pradesh Government websites and industry sources



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Single-window approval mechanism

Andhra Pradesh is the first state in the country to have enacted the Single Window Clearance Act in 2002. The Act made it compulsory for new industries to register with the single-window to obtain clearances quickly. It also simplified procedures for getting industrial clearances.

Committees were constituted at district and state levels to communicate to the applicant, the status of their clearances. It has set time slots for issuing clearances and incorporated a provision for deemed approval after the expiry of time limit.

District level committees can clear investments not exceeding US$ 217, 391. State level committees can clear those exceeding US$ 217, 391.

Above the district and state level committees is an appellate committee headed by the Chief Secretary of the State Government who reviews and monitors disposal of applications. Overall, a State Board under the chairmanship of the Chief Minister oversees the progress of the scheme.

The maximum time taken to issue clearance of applications at all stages is 45 days. Violation of provisions of the Act made either through self-assessment or otherwise would invite a penalty of US$ 108 in the first instance and US$ 217 in the second instance.



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Key investment promotion offices … (1/2)

State Investment Promotion Board (SIPB)

The SIPB has been created by the Government of Andhra Pradesh with the state Chief Minister as Chairman and members consisting of the Finance Minister , Minister for Revenue, Minister for Major Industries, Minister for Energy, and other ministers connected with specific projects as special invitees as well as the Chief Secretary to Government as member or convener.

The SIPB meets once a month to make final decisions regarding investments and promotion of industries in Andhra Pradesh and for approval of the projects. The project proposals and other issues regarding investments and promotion of industries in AndhraPradesh are processed by the Industries & Commerce Department and submitted to the Board. The Industries & Commerce Department also circulates the project proposals, with detailed notes, to all the concerned departments, for their action. The detailed note along with the reaction of the concerned departments are presented and discussed in the meeting of the Board, before taking a final decision. It is ensured that all final and necessary decisions are given for the industrial projects within a period of four weeks.

The Industries & Commerce Department issues a single order on each project, incorporating the decisions of the Board. The concerned Departments of Secretariat issue further necessary orders, with which they are concerned, on the decisions taken bythe SIPB.

Major Industries, Commerce and Export promotion Ministry

• Controls the office of the Principal Secretary, Industries & Commerce, Commissioner of Industrial Promotion

• They are responsible for SSIs and control the office of the Commissioner of Industries & Export Promotion, Commissioner Handlooms and Textiles, Commissioner for Sugar and Director, Mines and Geology.

• The Industries & Commerce department is headed by the Industries Minister and is controlled by the Principal Secretary.



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Key investment promotion offices … (2/2)

Corporations under Industries and Commerce Department

Andhra Pradesh Industrial Development Corporation (APIDC)

Andhra Pradesh Industrial Infrastructure Corporation (APIIC)

Andhra Pradesh Mineral Development Corporation (APMDC)

Andhra Pradesh State Finance Corporation (APSFC)

Andhra Pradesh State Trading Corporation (APSTC)

Andhra Pradesh State Handloom Weavers Co-operative Society Limited (APCO)

Leather Industries Development Corporation of Andhra Pradesh (LIDCAP)

Andhra Pradesh Handicrafts Development Corporation (APHDC)

Andhra Pradesh Khadi & Village Industries Board (KVIB)



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Contact list

Key agency Contact Information

AP Industrial Infrastructure Corporation

6th Floor, Parisrama BhavanFateh Maidan Road, BasheerbaghHyderabad - 500 004Phone: 91-40-2323 7622, 2321 2798Fax: 91-40-2323 3393, 2323 3251E-mail: [email protected]: www.apiic.in

Department of Industries and Commerce

Industries and Commerce Department2nd Floor, D Block, Room No-348ASecretariatHyderabad - 500022Phone: 91-040-23454449Fax: 91-040-23452985E-mail: [email protected]: www.industriesportal.apcgg.gov.in



mailto:[email protected]�

mailto:[email protected]�

94

Annexure

Year INR equivalent of one US$

2000 46.60

2001 48.30

2002 48.04

2003 45.60

2004 43.70

2005 45.20

2006 45.00

2007 42.00

2008 40.20

2009 46.00

Exchange rates

Averages for the year



95


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