Industrial Development & Economic Growth in Andhra Pradesh

Andhra Pradesh (AP) is located in the Southern peninsula of India. The state shares its borders with Chhattisgarh on the north, Odisha on the northeast, Telangana and Karnataka on the west, Tamil Nadu on the south, and Bay of Bengal on the east.

The erstwhile state of Andhra Pradesh has been bifurcated into two states, Telangana and residuary Andhra Pradesh (Seemandhra), by the Andhra Pradesh Reorganisation Act, 2014 or the Telangana Act. The act consisted of the aspects of the division of assets and liabilities, the boundaries of the proposed new states, and the status of the capital city Hyderabad after the separation of the state.

It is the first state in the country to have enacted the Industrial Single Window Clearance. The Act made it compulsory for new industries to register with a single-window to obtain clearances quickly. It also simplified procedures for getting industrial clearances. The state also has separate acts for development in sectors such as solar power, electronic hardware, and food processing.

With 13 districts and a geographical area of 1,62,970 sq. km., Andhra Pradesh ranks as the 8th largest state in the country. The state has a well-developed social, physical, and industrial infrastructure and virtual connectivity. It also has good power, airport, IT, and port infrastructure. At current prices, Andhra Pradesh's Gross State Domestic Product (GSDP) is estimated at Rs. 9,72,782 crore (US$ 138 billion) for 2019-20 as opposed to Rs. 8,62,957 crore (US$ 126 billion) for 2018-19.

The government is striving towards creating quality infrastructure, coupled with congenial industrial environment in the state, to make AP an attractive destination for both domestic and foreign investors.

• The state attracted Foreign Direct Investment (FDI) equity inflow worth US$ 19.19 billion between April 2000 and March 2020 according to the data released by Department for Promotion of Industry and Internal Trade (DPIIT).
• A new industrial policy is under process and will be announced by the government soon. In 2019-20, 44 large and mega industrial projects were established with an investment of Rs. 22,282.16 crore (US$ 3.03 billion), providing employment to 18,385 people, and 10,019 micro, small and medium enterprises were established with an investment of Rs. 2,979.86 crore (US$ 404.8 million), providing employment to 76,716 people.

Andhra Pradesh has most of the power projects of undivided Andhra Pradesh. Coal-based power plants are mostly located in the state due to proximity to the ports. As of March 2020, Andhra Pradesh had a total installed power generation capacity of 24,854 MW.

Recent Developments:

• Government plans to set up AP Green Energy Corporation with a mandate to install 8,000 MW to 10,000 MW of dedicated solar power capacity.
• The State Government plans to develop a Greenfield Port at Ramayapatnam in the state to meet the ever-increasing cargo demand under the landlord model with artificial deep harbour along an open straight sea coast, protected by breakwaters. The estimated cost for phase I is Rs. 3,736 crore (US$ 530 million).
• On November 17, 2019, ports of Visakhapatnam and Ranong in Thailand entered a joint venture (JV) to explore business opportunities.
• In November 2019, Visakha Container Terminal at Vizag port operated the first-ever direct service from Southeast India to North Europe (IEX), also connecting the Mediterranean region.
• In January 2019, MoU (memorandum of understanding) was signed between JSW Group and Andhra Pradesh Economic Development Board. The company expected an investment of Rs. 4,500 crore (US$ 623.70 million) to build a jetty at Ramayapatnam Port with plans to expand its logistic footprint.
• In 2019, existing runways at Vijaywada airport was extended from 2,286 metres to 3,360 metres, whereas, for Rajahmundry airport, it was extended from 1,750 metres to 3,165 metres.

Key Sectors:

• Andhra Pradesh is home to many global and national pharma players, and various companies have set up their manufacturing hubs in different cities of the state. Pharmaceutical exports from the state stood at Rs. 14,219.51 crore (US$ 1.94 billion) in 2019-20 period until September. In September 2020, Andhra Pradesh Industrial Infrastructure Corporation Ltd. (APIIC) signed an MoU with CSIR-IICT, a premier R&D institute in the country to set up a bulk drug pharma park in the state.
• The presence of rich climatic and soil conditions makes Andhra Pradesh a major agricultural belt. Few of the leading crops produced in the state include rice, chilly, oilseeds, cotton, pulses, and gram.
• Andhra Pradesh ranked first in egg production, fourth in meat production and fourth in milk production in the country during 2018-19. It is also home to a thriving fisheries industry and employs about 1.45 million people and contributes 36% of the total value of sea food export from the country.
• The state’s export of marine products increased to US$ 1,932.43 million in 2018-19 and reached US$ 2,193.25 million in 2019-20 (till February 2020).
• Andhra Pradesh is one of the largest producers of brackish water shrimps and freshwater prawns. 
• On September 7, 2020, the State government signed MoUs with the Netherlands government and seven companies in food processing, marketing and technologies, to benefit the horticulture and aquaculture farmers across the State.
• As of April 2020, the state had 1,532 primary health centres, 7,459 sub-centres, 47 sub-district hospitals and 26 district hospitals.
• According to the Director General of Hydrocarbons (DGH), Andhra Pradesh has huge oil and natural gas reserves. Production of crude oil and natural gas in the state was recorded at 216.51 thousand metric tonnes and 847 million cubic metres (MCM) during 2019-20, respectively. The state’s Krishna-Godavari basin, spread over an area of nearly 52,000 sq kms, has a total hydrocarbon resource base of 1,130 million metric tonnes. To promote investment in the industry, Andhra Pradesh Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) is being set up.
• Andhra Pradesh is known for its pristine beaches, sacred places of worship, lush green forests, spicy cuisine, and hospitable people. In 2019, domestic tourist arrivals in the state stood at 195.8 million, while foreign tourist arrivals stood at 0.23 million.

Note: *CAGR in Rs. terms, ^Includes drug formulations, biologicals, bulk drugs and drug intermediates