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Andhra Pradesh now open for Business

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CEO Naidu unveils 6 new policies, declares AP ‘OPEN’ for Business

In a significant step towards attracting large investments into the state of Andhra Pradesh, Chief Minister Mr N Chandrababu Naidu recently unveiled not 1 but 6 critical policies that aim to garner gargantuan investments for AP.

Taking to social media the CM wrote ‘Andhra Pradesh is now OPEN! I’m inviting you to invest in our state, where we have rolled out a red carpet to welcome you — with a business-friendly state government, talented youngsters and robust infrastructure’.

Stating that between 2014 and 2019, Andhra Pradesh witnessed a significant transformation in its industrial landscape he said that in the past five years, there has been a noticeable shift in focus away from economic growth, leading many industries to shift to other states.

‘Today, we are committed to reigniting the momentum by offering enabling ecosystem and competitive incentives to attract industries back to the state’ said the CM addressing media.

Mr Naidu added that all the policies are designed to be forward-looking, aiming to boost industrial growth by focusing on job creation, fostering entrepreneurship, addressing climate change, and ultimately generating wealth for the state.

The 6 policies that have been unveiled by the state government are

  1. AP Industrial Development Policy 4.0 (AP IDP 4.0)
  2. AP MSME & Entrepreneur Development Policy 4.0 (AP MEDP 4.0)
  3. AP Food Processing Policy 4.0 (AP FPP 4.0)
  4. AP Electronics Policy 4.0 (AP EP 4.0)
  5. AP Private Parks Policy 4.0 (AP PPP 4.0)
  6. AP Integrated Clean Energy Policy 4.0 (AP ICE 4.0)

Of the six, the Department of Industries is bringing two Anchor Policies and three sectoral policies. As per the government IDP 4.0 will be the anchor policy for all Large & Mega investments, while MEDP 4.0 will be the anchor policy for MSMEs.

AP Industrial Development Policy 4.0

The Industrial development policy 4.0 with a timeline of 5 years 2024-29 targets an investment of a whopping Rs 30 Lakh Crores (in Manufacturing sector) and aims to operationalize investments worth INR 5 Lakh Crores during the policy period. It also envisions a FDI attraction of Rs 83,000 Crores (USD 10 Bn), Employment Creation 5 Lakh jobs (in manufacturing sectors), Parks Development of 175+ parks (sector and cluster focused), and Doubling exports to Rs 33,200 Crs.

MSME & Entrepreneur Development Policy 4.0

This policy too has a time frame of 5 years i.e. 2024-29 with a targeted investment attraction of Rs 50,000 Crores (in Manufacturing sector), MSME Formalization of 22 Lakh units (Manufacturing + Services), Employment Creation 5 Lakh jobs (in manufacturing sectors), Establishing Rata Tata Innovation Hub with headquarters at Amaravathi having 5 Zonal Centres. These centres will focus on mentoring, venture capital tie ups, financial support, knowledge transmission, legal aid, integration with universities led by leading Industry groups and a Utilization of Corpus Fund of 500 Cr in 5 Yrs

AP Food Processing Policy 

The AP food processing policy aims to foster Value addition and encourage entrepreneurs to move up value chain.

Some of the key policy targets for this one includes an investment attraction Rs 30,000 Crores (in Manufacturing sector), MSME Formalization 3 Lakh units (Manufacturing + Services), Employment Creation of 3 Lakh jobs (in manufacturing sectors), Exports from sector – USD 15 Bn, Notification of 3 tribal districts as organic zones, Establish Commodity Boards for Mango, Banana & Cashew, Utilization of Corpus Fund of Rs. 250 Cr for Research & Development in Food Processing technology & Quality Certification

AP Electronics Manufacturing policy

This policy with a time frame of 5 years targets an investment attraction – INR 84,000 Crores from all electronic categories, Employment Creation – 5 Lakh jobs and Production Value – INR 4.2 Lakh Crores.

Some of the Operational Incentives in this policy include Net SGST Reimbursement i.e. 100% reimbursement of Net SGST for 5 years, Power Subsidy – INR 1 per unit for 5 years, Stamp Duty – 100% reimbursement on Stamp Duty Charges, Recruitment Assistance – INR 4,000 per month for Male and INR 6,000 per month for Female (first time employees) for 6 months, after one years of operations.

In this the Focused Subsectors include IoT – Focus on manufacturing of IoT devices across all sectors like Medical, Logistics, Agriculture, Surveillance, Industrial, etc. 

While Other Products also include Mobile, TV, Laptop, Air Conditioners, 5G Communication Devices, and Components, etc.

Policy for establishing Private Parks 

This policy comes with an intent of establishing more Industrial Parks with Private Participation in the State along with the three Industrial Corridors with World Class Industrial Infrastructure.

Under this policy Industrial Parks will be developed and divided into 4 segments Nano Parks –less than 10 Acre, MSME Parks –10 Acre to 100 Acre, Large or Sector Specific Parks – 100 Acre to 1,000 Ac, Mega Parks – more than 1.000 Ac

The Policy will also cover development of Flatted Factory Complexes (FFCs) to be developed on PPP mode; Incentive is @ 30% Capital Subsidy with a cap of Rs.6 crores.

Policy is flexible to accommodate all possible models of Park development starting from O&M by private participation to development of Parks through Joint Venture (JV), Build Own Operate (BOO), Design Build Finance Operate Transfer (DBFOT), etc, to create best Industrial Infrastructure.

Private Developer may be the owner of the majority lands cum Promoter of the Park and in some cases, the Private Developer will pool the lands from the farmers (across all types) cum Promoter of the Park.

Under this Policy, it is envisaged to create following Sector Specific Parks viz, Aqua, Agri and Horticulture processing / Biotechnology / Defence and Aerospace / Drone Manufacturing / Electric Vehicles (EV) / Gems & Jewellery / Leather & Footwear / Pharmaceutical / Semiconductor & Electronics / Textiles / Toys / Product specific parks / Parks for downstream industries of evolving needs /Any other sectors as decided by Govt.

Policy encourages industrial projects to build housing and hostels for employees within 5 km of the work area.

AP Integrated Clean Energy Policy 4.0 (AP ICE 4.0)

The state has also developed the “Andhra Pradesh Integrated Clean Energy Policy, 2024” enabling a robust regulatory framework for attracting investments in the clean energy sector, creating the level playing field for the investments in this sector through creation of local employment opportunities and utilization of available resources in a sustainable manner.

The policy has 4 key objectives i.e. Harness RE potential in the state by promoting clean energy solutions, ultimately driving progress towards state and country level net zero targets, optimize energy cost through RE and cutting-edge technology adoption, leveraging transmission network and Green Energy Corridors for grid management, promote manufacturing ecosystem development and investments for projects and Facilitate development of a circular economy and create employment opportunities.

Operative for a period of 5 years from the date of issuance of policy. The Policy will be applicable for all Clean Energy Projects & RE Manufacturing projects.

The ICE policy is said to be in line with Andhra Pradesh’s ambitious target of net zero by 2047.

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