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ANDHRA PRADESH

April 2010

ANDHRA PRADESH

April 2010

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

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

Procedures for entry and exit of firms Industrial regulation, labour regulation, other government regulations Certainty about rules and regulations Security, law and order situation

Resources/Inputs Incentives to industry


Investment climate of a state


Regulatory framework Physical and social infrastructure

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

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

ANDHRA PRADESH

April 2010

Contents
Advantage Andhra Pradesh State economy and socio-economic profile Infrastructure status State policies and incentives Business opportunities Doing business in Andhra Pradesh

ADVANTAGE ANDHRA PRADESH Andhra Pradesh April 2010

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, Gun tur, 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

ADVANTAGE ANDHRA PRADESH Andhra Pradesh April 2010

Advantage Andhra Pradesh (1/2)

Hub for knowledge-based industries


Andhra Pradesh has emerged as a key state or the knowledgebased 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 sectorspecific policies.

Policy and fiscal incentives

The 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.
Source: Maps of India

Rich labour pool

ADVANTAGE ANDHRA PRADESH Andhra Pradesh April 2010

Advantage Andhra Pradesh (2/2)

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 growth

The state is targeting 9 per cent annual economic growth during the Eleventh Five-Year Plan period (200712). Vast natural gas reserves found in the KrishnaGodavari basin have opened up immense possibilities for the state economy.

The state has a stable political environment with a single-party government. The State Government is committed towards creating a progressive business environment.
Source: Maps of India

Stable political environment

ADVANTAGE ANDHRA PRADESH Andhra Pradesh April 2010

Andhra Pradesh in figures (1/2)


Parameter Economy GSDP as a percentage of all states GSDP Average GSDP growth rate (%) Per capita GSDP (US$) Physical Infrastructure Installed power capacity (MW) GSM cellular subscribers (No) Broadband subscribers (No) National Highway length (km) Major and minor ports (No) Airports (No) Social Indicators Literacy rate (%) Birth rate (per 1,000 population) 60.5 18.7 64.8 23.3 Census of India, 2001 Central Bureau of Health Intelligence, 2007 9,224.3 27,422,275 400,663 4,537.0 1 +12 11 98,996.4 367,328,179 4,981,976 70,548.0 12 + 187 133 Central Electricity Authority, as of March 2009 Cellular Operators Association of India, as of November 2009 As of October 2008 Ministry of Road Transport & Highways, 2007-08 Ministry of Shipping Industry sources 7.9 13.9 947.0 100.0 7.5 998.1 CMIE, 2006-07, current prices CMIE, 1999-2000 to 2007-08 CMIE, 2007-08 Andhra Pradesh All-states Source

ADVANTAGE ANDHRA PRADESH Andhra Pradesh April 2010

Andhra Pradesh in figures (2/2)


Parameter Ease of doing business FDI inflows (US$ billion) Outstanding investments (US$ billion) Industrial Infrastructure PPP projects (No) SEZ (No) 70 18 460 98 www.pppindiadatabase.com Functional as of August 2009, www.sezindia.nic.in 4.2 141.5 102.1 1,709.7 Department of Industrial Policy and Promotion, April 2000 to October 2009 CMIE, as of December 2008 Andhra Pradesh All-states Source

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

Parameter Policy support Sectors with specific policies Availability of labour

Andhra Pradesh Government Industry overall, biotechnology, ICT, tourism, textile and apparel Adequate skilled labour available

ADVANTAGE ANDHRA PRADESH Andhra Pradesh April 2010

Key industries with policy thrust and factor advantages


Industry attractiveness matrix

High
IT and ITeS Textiles and apparel Agro and food processing

Bulk drugs and pharmaceuticals

Biotechnology

Policy thrust

Medium

Low

Medium *Factor advantage

High

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

ANDHRA PRADESH

April 2010

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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STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Andhra Pradesh April 2010

Socio-economic snapshot of Andhra Pradesh


Parameters Capital Geographical area (sq km) Administrative districts (No) Population density (persons per sq km) Total population (million) Male population (million) Female population (million) Decadal population growth rate (%) Sex ratio (females per 1,000 males) Literacy rate (%) Male (%) Female (%) Average life expectancy (years)
Sources: Andhra Pradesh Government (www.aponline.gov.in) Director, Census Operations, A.P. Hyderabad Directorate of Economics and Statistics, Hyderabad CMIE

Andhra Pradesh Hyderabad 275,100 23 277 76.2 38.5 37.7 14.6 978 60.5 70.3 50.4 63.9

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STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Andhra Pradesh April 2010

Andhra Pradeshs GSDP

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 Pradeshs GSDP (US$ billion)


2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 2000-01 1999-00 0.0 20.0 71.7 77.7 64.1 52.5 46.6 43.7 36.9 32.7 30.0 27.8 40.0 60.0 CAGR 11.5%

80.0

100.0

Sources: CMIE, Andhra Pradesh Budget, 2008-09

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STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Andhra Pradesh April 2010

Andhra Pradeshs NSDP

The Net State Domestic Product (NSDP) of Andhra Pradesh was about US$ 51.1 billion in 2007-08. The average NSDP growth rate between 19992000 and 2007-08, was about 9.4 per cent.

Andhra Pradeshs NSDP (US$ billion)


2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 2000-01 1999-00 0.0 Source: CMIE 10.0 20.0 38.1 35.0 34.1 29.8 27.5 26.2 25.1 30.0 40.0 50.0 60.0 CAGR 9.4% 44.2 51.1

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STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Andhra Pradesh April 2010

The tertiary sector has an increasing share in Andhra Pradeshs economy

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 sectors contribution of 4 per cent (US$ 2.1 billion).

39%

35% Primary Secondary Tertiary Primary Secondary 61% 4% Tertiary

58%

3%

1999-2000
Source: CMIE

2007-08

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STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Andhra Pradesh April 2010

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.
Per capita GSDP
1000.0 900.0 800.0 700.0 (US$) 600.0 500.0 400.0 300.0 200.0 100.0 0.0 1999-00 Source: CMIE 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 368 395 427 474 556 586 653 789 947

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STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Andhra Pradesh April 2010

Industries in Andhra Pradesh

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.

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

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STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Andhra Pradesh April 2010

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

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.

Crop Sugarcane Rice Maize Cotton Groundnut Gram Chilly Onion Mesta* Sorghum
Source: CMIE *A variety of Jute

Annual production (ooo tonnes) 20,254.0 13,324.0 4,135.0 3,491.0 2,604.0 912.0 772.0 690.0 501.0 470.0

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STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Andhra Pradesh April 2010

Andhra Pradeshs exports trends

Andhra Pradeshs exports increased at a CAGR of about 26.6 per cent between 2001-02 and 2007-08.
2007-08

Annual exports growth trends (%)


21.3 50.3 29.7 3.8 23.5 26.0 16.2 0 10 20 30 40 50 60

The states major exports products are software, drugs and pharmaceuticals, leather, animal and marine products, and agriculture and agrobased products. In order to boost exports from Andhra Pradesh, the State Government offers a special package of incentives to the export oriented units (EOU).
Export package to EOUs under the Industrial policy

2006-07 2005-06 2004-05 2003-04

2002-03 2001-02

Source: Capital Markets

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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STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Andhra Pradesh April 2010

Investments and FDI inflows

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.

Break up of investments by sector

14% 27% Manufacturing Mining 17% 4% Electricity Services Irrigation Construction 21%

17%

Source: CMIE, as of December 31, 2008

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ANDHRA PRADESH

April 2010

Contents
Advantage Andhra Pradesh State economy and socio-economic profile Infrastructure status State policies and incentives Business opportunities Doing business in Andhra Pradesh

20

INFRASTRUCTURE STATUS Andhra Pradesh April 2010

Road network

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.

Source: Maps of India

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INFRASTRUCTURE STATUS Andhra Pradesh April 2010

Railway network

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.
South Central Railway network Division Secunderabad Vijaywada Guntakal Guntur Hyderabad Nanded Total Broad gauge 1,311.2 945.8 1,121.6 617.2 569.6 823.0 5,388.3 Metre gauge 0.0 0.0 184.7 0.0 0.0 175.9 360.6 Total 1,311.2 945.8 1,306.2 617.2 569.6 998.9 5,748.9

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).

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

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INFRASTRUCTURE STATUS Andhra Pradesh April 2010

Airports

The state has an international airport at Hyderabad and domestic airports at Visakhapatnam,Tirupati, Rajahmundry,Warangal,Vija yawada, Donakonda, Kadapa and Puttaparthy Hyderabad is connected to several key international destinations such as Amsterdam, Bangkok, Chicago, Frankfurt, Dubai, Sing apore, 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 India Single 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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INFRASTRUCTURE STATUS Andhra Pradesh April 2010

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.
Visakhapatnam Port Traffic (million tonnes)
70 60 50 40 30 20 10 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 22 23 26 30 33 34 36 36 40 45 44 46 48 50 56 56 65 64

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INFRASTRUCTURE STATUS Andhra Pradesh April 2010

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.

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 mandal headquarters and 100 megabit per second to each of the villages.

There are about 27.4 million GSM cellular subscribers and 400,000 broadband connections. The state has approximately 44,000 km of fibreoptic 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.

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

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INFRASTRUCTURE STATUS Andhra Pradesh April 2010

Power (1/2)

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 200708.

Installed state and private capacity (MW)


10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 7,786.6 8,072.1 9,452.0 8,859.7 9,017.8 9,224.3

7,238.2

7,616.2

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Source: Central Electricity Authority

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INFRASTRUCTURE STATUS Andhra Pradesh April 2010

Power (2/2)

The integrated Andhra Pradesh State Electricity Board (APSEB) was restructured in 1999 to form the following companies:
Segment Power generation Power transmission Power distribution Company name Andhra Pradesh Power Generation Corporation Limited (AP Genco) Transmission Corporation of Andhra Pradesh Limited (AP Transco) 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 AP Gencos hydro-power plants AP Gencos thermal power plants

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INFRASTRUCTURE STATUS Andhra Pradesh April 2010

Urban infrastructure (1/2)


Sewerage system and solidwaste management system

Water supply

Per capita water supply across key cities

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

Source: Commissionerate of Industries, Andhra Pradesh, 2006 Current per capita supply (litres/day) Desired Level

* litres per capita per day

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INFRASTRUCTURE STATUS Andhra Pradesh April 2010

Urban infrastructure (2/2)


Under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), projects costing US$1,162.1million have been sanctioned for Hyderabad,Visakhapatnam,Vijayawada and Tirupati. The projects have been sanctioned for completion between 2005-06 and 2009-10. Some of the key areas of development are roads/flyovers, water supply, storm water drainage, old city drains, solidwaste management and mass rapid transport system. Projects of value US$ 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.
Source: JNNURM, Ministry of Urban Development, www.urbanindia.nic.in

Sewerage treatment infrastructure (%)


50 40 30 20 10 0 Hyderabad Vijaywada Vishakapatnam Treated (%) Area Coverage (%) 10 10.5 23 45 40

Visakhapatnams 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.

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INFRASTRUCTURE STATUS Andhra Pradesh April 2010

Key public-private partnership projects


Project name Vodarevu Nizampatnam ports and port-based corridor development Cuddapah Mydukur Kurnool road Integrated solid waste management for Hyderabad Four-laning of Hyderabad Karimnagar Ramagundam road Naketpally Addanki Medaramitla road Bus terminal and commercial development at Musheerabad Health spa and resort Four-laning of Khammam Tallada Devarapally road Four-laning of Perecherla Thokapalli road Four-laning of Warangal Khammam road
Source: www.pppindiadatabases.com EOI-Expression of interest, BOOT: build-own-operate-transfer, BOT: build-operate-transfer, DBFOT: design-build-finance-operate-transfer

Sector Ports Roads Urban development Roads Roads Urban development Tourism Roads Roads Roads

PPP type BOOT BOT-Toll DBFOT BOT-Toll BOT-Toll Lease Lease BOT-Toll BOT-Toll BOT-Toll

Project cost (US$ million) 3,652.2 344.6 195.0 295.2 260.2 54.3 13.0 143.5 113.5 103.5

Stage Construction Construction Construction Bidding Bidding Bidding Bidding EOI EOI EOI

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INFRASTRUCTURE STATUS Andhra Pradesh April 2010

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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INFRASTRUCTURE STATUS Andhra Pradesh April 2010

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.
Degree colleges

Colleges by courses, 2008-09


800 700 600 500 400 300 200 100 0 B.Ed Engineering Pharmacy MBA MCA 256 610 540 498 698

Life-sciences institutes

Government colleges: 241 Aided colleges: 179 Unaided colleges: 1,459 Under-graduate and post-graduate colleges in 2008-09: 5,236

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.

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INFRASTRUCTURE STATUS Andhra Pradesh April 2010

Health infrastructure

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

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INFRASTRUCTURE STATUS Andhra Pradesh April 2010

Cultural infrastructure

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.

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INFRASTRUCTURE STATUS Andhra Pradesh April 2010

Industrial infrastructure development (1/2)

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).

STPI units registered (No)


1400 1200 1000 800 600 400 200 0 173 174 176 69 1052 845 616 1164

2005-06

2006-07 All India

2007-08 AP

2008-09

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

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INFRASTRUCTURE STATUS Andhra Pradesh April 2010

Industrial infrastructure development (2/2)


Genome Valley Genome Valley is Indias 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.

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.

Integrated Infrastructure Development Centres (IIDC) to establish industries in rural/backward areas and provide agricultureindustry link. Centres are located in Nandyal (Kurnool),Tada (Nellore), Keelapattu and Madikonda (Warangal), Gajularamaram (Ranga Reddy) and Surampally (Vijaywada).

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.

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

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INFRASTRUCTURE STATUS Andhra Pradesh April 2010

SEZs and industrial clusters


Upcoming SEZs Industrial clusters in AP
ANDHRA PRADESH
Industrial Clusters
MAHARASHTRA Sircilla Warangal Rangareddy Hyderabad Bheemavaram Nalagunda Guntur Karnool Kadapa Hindupur Chittoor Kuppam Ongole Vijaywada Khammam Vizianagaram Vishakapatnam MADHYA PRADESH

KARNATAKA

Nellore

Automobiles & Engineering IT / ITES Pharma / Biotech Mineral Textile & Apparel Food Processing

TAMIL NADU

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INFRASTRUCTURE STATUS Andhra Pradesh April 2010

Infrastructure investments

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.

Infrastructure type Power*

Investments (US$ million) 15,230.8 1,353.1 2,730.1 5,346.4 176.1 1,379.5 26,216.0

Roads Oil and gas Railways Airport Shipping Total


*Generation and distribution Source: CMIE

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INFRASTRUCTURE STATUS Andhra Pradesh April 2010

Existing mega parks


Location (district) Chittoor Medak Ranga Reddy Name of the park Food processing park Export promotion industrial park 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

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INFRASTRUCTURE STATUS Andhra Pradesh April 2010

Upcoming specialised parks


Location (district) Ranga Reddy Name of the park Pharma cluster Business district and trade towers Rajiv Gandhi nanotech park Semindia Fab city Hardware park Aero park Auto park IT parks (three) Sircilla, Karimanagar Vijayawada, Krishna Textile park Auto component Nalgonda Medak Anantpur Guntur Khammam Mahabubnagar Visakhapatnam, Vizianagaram, East Godavari Nellore Location (district) Visakhapatnam Name of the park Brandix textile city IT park Apparel export park Marine biotech park Handloom textile park Textile park Textile park Food processing park Food processing park Textile park Petroleum. Chemicals and Petrochemicals Investment Region (PCPIR) Food processing park

IT park

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INFRASTRUCTURE STATUS Andhra Pradesh April 2010

Sector-specific industrial parks (1/2)


Industry Lifesciences Name of the park, location Agri-science park Brief description 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. 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.

Jawaharlal Nehru Pharma City (JNPC)

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Sector-specific industrial parks (2/2)


Industry Apparel and textile Name of the park, location Apparel Export Park Brief description 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. 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 singlewindow clearance for all approvals. Centre Government approved project under the Textile Centre Infrastructure Development Scheme. So far, 50 acres of land have been developed. 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. Project developed on 146 acres of land for accelerated industry growth there. Proposed to be developed as a natural garment cluster with basic infrastructure facilities and skilled manpower. 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.

Textile Park, Sircilla

Textile Park, Pashamylaram

Brandix India Apparel City, Visakhapatnam Apparel Export Park, Visakhapatnam Textile Park, Pamidi Handloom Apparel Park, Pochampally

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INFRASTRUCTURE STATUS Andhra Pradesh April 2010

Virtual infrastructure
E-seva

Rajiv Internet Village

AP online

E-procurement

Presence of e-governance initiative, which offers a wide spectrum of citizenfriendly 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 fulfilmentof 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

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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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STATE POLICIES AND INCENTIVES Andhra Pradesh April 2010

Sector-specific policies (1/11)


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.

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STATE POLICIES AND INCENTIVES Andhra Pradesh April 2010

Sector-specific policies (2/11)


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.

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STATE POLICIES AND INCENTIVES Andhra Pradesh April 2010

Sector-specific policies (3/11)


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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STATE POLICIES AND INCENTIVES Andhra Pradesh April 2010

Sector-specific policies (4/11)


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 coordination with 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-tocitizens services and computer training for e-literacy.

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STATE POLICIES AND INCENTIVES Andhra Pradesh April 2010

Sector-specific policies (5/11)


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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STATE POLICIES AND INCENTIVES Andhra Pradesh April 2010

Sector-specific policies (6/11)


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) in other 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.

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STATE POLICIES AND INCENTIVES Andhra Pradesh April 2010

Sector-specific policies (7/11)


Electronic Service Delivery Policy, 2003 Aim: To evolve a comprehensive and generic policy that permits rapid growth of electronic delivery of services under egovernance 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 delivery channel. 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 and issue 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).

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STATE POLICIES AND INCENTIVES Andhra Pradesh April 2010

Sector-specific policies (8/11)


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 biotech activities, and protecting IPR. The Andhra Pradesh Government is working on a new biotechnology policy.

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STATE POLICIES AND INCENTIVES Andhra Pradesh April 2010

Sector-specific policies (9/11)


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 Turkapalli village, 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$ 660 per job created, subject to the value of a maximum of 2 acres of government land and 100 per cent exemption from registration and 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.

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STATE POLICIES AND INCENTIVES Andhra Pradesh April 2010

Sector-specific policies (10/11)


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 and commercially 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 lease rent 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

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STATE POLICIES AND INCENTIVES Andhra Pradesh April 2010

Sector-specific policies (11/11)


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.

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

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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

IT and ITeS

Andhra Pradesh has had a steady growth in IT/ITeS exports, 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

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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

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. 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 Microsofts 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 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. 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.

Microsoft

Genpact

Cognizant

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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

IT/ITeS company profiles (2/4)


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 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 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 is a leading global IT services and solutions provider with offices across the world. The companys 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.

iGATE Global Solutions Limited

Patni Computers

IBM

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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

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. 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. 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 worlds leading network-equipment manufacturers and telecommunications service providers, with more than 330 million ports shipped to date. Incorporated in 1976, HCL is a leading global technology and IT enterprise with annual revenue of US$ 5 billion. The companys 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.

Tata Consultancy Services (TCS)

Ikanos Communications

HCL

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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

IT/ITeS company profiles (4/4)


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. 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 CSCs 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.

CSC

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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

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.

Key players Dr Reddys Laboratories Aurobindo Pharma AMRI Novartis Nektar Shantha Biotechnics Vimta Labs Indian Immunologicals Parexel Biological E. Bharat Biotech Indigene

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.
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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

Pharmaceuticals and biotechnology company profiles (1/7)


Dr Reddys Laboratories Limited (DRL) Established in 1984, Dr Reddys 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. 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 USbased resources.

Albany Molecular Research Inc (AMRI)

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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

Pharmaceuticals and biotechnology company profiles (2/7)


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 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), antiretroviral, 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.

Aurobindo Pharma

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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

Pharmaceuticals and biotechnology company profiles (3/7)


Anus 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-ofthe-art research and development facility, located at Balanagar, Hyderabad, that supports product development, contract research and customised synthesis programmes of the organization. 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. 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 carbohydratebased Chiral technology for pharmaceuticals.

Natco Pharma Limited

Suven Life Sciences Limited

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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

Pharmaceuticals and biotechnology company profiles (4/7)


Divis Laboratories
Divis 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. Divis also exports dextrome thorphan, iopamidol, nabumetone, phenyle ephedrine and phen procumar. 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. 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.

Matrix Labs

Hetero Drugs

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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

Pharmaceuticals and biotechnology company profiles (5/7)


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, ciprofloaxcin and latnoprost. The company exports to over 65 countries worldwide, including USA, Canada, Europe, Latin America, Korea, Japan, Australia and South Africa. 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 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. 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 AsiaPacific, Africa, (Commonwealth of Independent States) CIS and Latin America in addition to the United Nations Childrens Fund (UNICEF) and Pan American Health Organisation (PAHO). Based in Hyderabad, Shantha Biotech became a part of the Sanofi-Aventis group in July 2009.

Nektar

Glochem Industries Limited (GIL)

Shantha Biotechnics

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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

Pharmaceuticals and biotechnology company profiles (6/7)


Vimta Labs Vimta Labs is Indias leading contract research and testing organization. Established in 1984, Vimta now 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 multisite 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. IIL produces a range of veterinary vaccines such as foot -and -mouth disease (FMD) vaccine, antirabies 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. 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. 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.

Indian Immunologicals Limited (IIL)

PAREXEL

Bharat Biotech International Limited (BBIL)

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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

Pharmaceuticals and biotechnology company profiles (7/7)


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 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. 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 .

Indigene

Krebs Biochemicals & Indisutries Limited (KBIL)

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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

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-ofthe-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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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

Agri and processed food sector

The agricultural sector in the state witnessed a growth of 7.5 per cent over the last five years and the total crop area increased to 12.2 million hectares by 2008-09. A variety of agro-climatic conditions in the state make it conducive for growing a variety of horticulture crops such as fruits, vegetables, spices, tuber crops, plantation crops and floriculture. The state is the largest producer of rice in India. It is a leading producer of cash crops such as tobacco, groundnut, dry chilly, turmeric, oilseeds, cotton, sugar and jute. It is the second-largest producer of horticulture products in India; production is expected to reach 22.9 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.
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Key players CongAgra Foods Kraft foods ITC APDDCF Cargill Ushodaya Enterprises

BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

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


CongAgra Foods ConAgra Foods, US is one of the worlds 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 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, Cargills 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 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 ITCs 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.

Cargill

ITC Limited

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


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). 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. 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.

Ushodaya Enterprises

Kraftfoods

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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

Agriculture and allied industry (1/2)


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 200607, a 7 per cent increase over 200506.

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

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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

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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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

Petroleum, chemicals and petrochemicals

According to the Petroleum Ministrys provisional figures for 2008-09, the net natural gas production was about 1,515 million cu m. The states 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 Governments 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 Corporations 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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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

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, Araku Valley, Borra Caves, 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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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

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

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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

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 countrys 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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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

Mines and minerals

Andhra Pradesh is estimated to account for approximately nine per cent to total mineral production in 2008-09. The states mineral production was valued at US$ 2.4 billion in 2007-08, a 14 per cent increase over 2006-07. Production in iron ore increased by 73 per cent, while that of manganese ore by 120 per cent and petroleum (crude) by 11 per cent in 2008-09. Production of silica sand increased by 136 per cent, ochre by 86 per cent, quartzite by 67 per cent, dolomite by 19 per cent, limestone by nine per cent and coal eight per cent in 2008-09.

Contribution to national minerals production (%) Barytes Ball clay Corundum Diamond Calcite Mica Garnet Limestone 94 63 61 40 39 28 26 23

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

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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

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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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

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.

Hotel projects under construction


Name Park Hyatt 7-Star hotel Leela Palace Kempinsky hotel Royal Orchid 5-Star hotel Taj GVK Hotel
Source: www.projectstoday.com

Promoters Gayatri Hi-Tech Hotels Limited Hotel Leelaventure Limited Royal Orchid Hotels Limited Taj GVK Hotels & Resorts Limited

Project cost (US$ million) 76.1 67.4 65.2 32.6

Location Banjara Hills, Hyderabad Hyderabad Gachibowli, Hyderabad Hyderabad

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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

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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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

Major industrial projects being implemented


Project Pranahita-Chevella lift irrigation scheme Krishnapatnam ultra-mega power project Krishnapatnam power project (1,600 MW) Integrated steel project, Phase-I Galeru Nagari Sujala Sravanthi irrigation project Solar energy equipment project (120 MW) Diesel hydro treater project - Visakh Refinery Polavaram irrigation project Sector Irrigation Power Power Steel Irrigation Power Refinery Irrigation Promoter Government of Andhra Pradesh Coastal Andhra Power Limited AP Genco Bramhani Industries Limited Government of Andhra Pradesh X L Telecom Limited Hindustan Petroleum Corporation Limited (HPCL) Government of Andhra Pradesh Hyderabad Growth Corridor Limited Hyderabad Metro Water Supply & Sewerage Board Rashtriya Ispat Nigam Limited Investment (US$ million) 8,369.6 3,695.7 1,813.0 978.3 3,635.0 782.61 782.0 658.7 652.2 652.2 652.2 Location Bejjur, Adilabad Krishnapatnam, Nellore Nellore Cuddapah Cuddapah, Nellore, Chittoor Shamsabad, Hyderabad Visakhapatnam West Godavari Medak, Ranga Reddy Visakhapatnam

Greater Hyderabad growth corridor project Roads Godavari drinking water supply scheme Finished steel project
Source: www.projectstoday.com

Water supply Steel

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BUSINESS OPPORTUNITIES Andhra Pradesh April 2010

Key industrial projects being planned


Project Hyderabad elevated-MRTS project Kakinada refinery project Bhavanapadu coal-based power project Alumina refinery project Multi-product Industrial Park Alumina refinery project Coal-based power project Business complex Road up-gradation (IcchapuramSrikakulam-Ankapalli-Rajahmundary) project Kakatiya power project, Stage-II
Source: www.projectstoday.com

Sector Transport Refinery Power Aluminium Industrial park Aluminium Power Construction Roads Power

Promoter Hyderabad Metro Rail Limited Kakinada Refinery & Petrochemicals Limited East Coast Energy Private Limited Jindal South West Aluminium Limited Yeswanth Industrial Infrastructure Projects Private Limited National Aluminium Co Limited Sheshadri Power & Infrastructure Private Limited CBD Tower Private Limited National Highways Authority of India AP Genco

Investment (US$ million) 2,637.4 3,260.9 2,407.6 1,956.5 1,652.2 1,521.7 1,521.7 1,521.7 771.7 645.4

Location Hyderabad Kakinada, East Godavari Srikakulam Boddavara Perupalem Hindupur Hyderabad Multiple locations Warangal

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ANDHRA PRADESH

April 2010

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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DOING BUSINESS IN ANDHRA PRADESH Andhra Pradesh April 2010

Key approvals required (1/2)


S No 1 2 Approvals and clearances required Registration, IEM, Industrial licenses Allotment of land/shed in industrial estates or industrial areas Acquisition and alienation of government lands Respective departments of state Registrar of firms Andhra Pradesh Industrial Development Corporation Chief Commissioner of Land Administration (CCLA) Panchayat Raj Department 4 Site and building plan approval Urban Development Authority Town and Country Planning Municipality Urban Development Authority 5 Change of land use Consent for establishment under pollution control Green Orange Red Town and Country Planning Municipality 6 AP Pollution Control Board 7 days 21 days 45 days 45 days 7 days Estimated time 7 days 7 days for up to 1,000 sq m 21 days for above 1,000 sq m 45 days

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DOING BUSINESS IN ANDHRA PRADESH Andhra Pradesh April 2010

Key approvals required (2/2)


S No Consent for 7 8 9 10 11 12 13 14 15 16 17 operation under pollution control Excise registration VAT/CST Registration Power feasibility Power connection Approval of factory plans Factory license Sanction of water supply Water connection Permission to draw water from rivers and/or public tanks Approvals and clearances required Green Orange Red Fire Services Department Excise Department Commercial Taxes Department Power distribution companies Factories Department Hyderabad Metro Water Supply and Sewerage Board Irrigation Department AP Pollution Control Board Respective departments of state Estimated time 7 days 21 days 45 days 15 days 14 days 7 days 7 days 23 days 7 days 7 days 7 days 23 days 30 days

No-objection certificate for fire safety

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DOING BUSINESS IN ANDHRA PRADESH Andhra Pradesh April 2010

Cost of doing business in Andhra Pradesh


Parameter Land price (US$ per sq m) Labour (US$ per man year) Lease rent (US cents per sq ft) Electricity (US cents per unit) Residential rent (US cents per sq ft per month) Five-star hotel room (US$ per night) Water (US cents per 1,000 litres) Cost 20 to 200 825 to1,250 36.6 to 61.0 Commercial: 15.8 Industrial: 9.8 to10.8 12.6 to 62.5 73.0 to 512.0 Commercial: 50.0 Industrial: 62.5

Sources: Andhra Pradesh Government websites and industry sources

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DOING BUSINESS IN ANDHRA PRADESH Andhra Pradesh April 2010

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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DOING BUSINESS IN ANDHRA PRADESH Andhra Pradesh April 2010

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 Andhra Pradesh 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 by the 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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DOING BUSINESS IN ANDHRA PRADESH Andhra Pradesh April 2010

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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DOING BUSINESS IN ANDHRA PRADESH Andhra Pradesh April 2010

Contact list
Key agency Contact Information 6th Floor, Parisrama Bhavan Fateh Maidan Road, Basheerbagh Hyderabad - 500 004 Phone: 91-40-2323 7622, 2321 2798 Fax: 91-40-2323 3393, 2323 3251 E-mail: apiic@hyd.sancharnet.in Website: www.apiic.in Industries and Commerce Department 2nd Floor, D Block, Room No-348A Secretariat Hyderabad - 500022 Phone: 91-040-23454449 Fax: 91-040-23452985 E-mail: secy_inds@ap.gov.in Website: www.industriesportal.apcgg.gov.in

AP Industrial Infrastructure Corporation

Department of Industries and Commerce

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DOING BUSINESS IN ANDHRA PRADESH Andhra Pradesh April 2010

Annexure
Exchange rates Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Averages for the year

INR equivalent of one US$ 46.60 48.30 48.04 45.60 43.70 45.20 45.00 42.00 40.20 46.00

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ANDHRA PRADESH

April 2010

DISCLAIMER
India Brand Equity Foundation (IBEF) engaged ICRA Management Consulting Services Limited (IMaCS) to prepare this presentation and the same has been prepared by IMaCS in consultation with IBEF. All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of IBEF. This presentation is for information purposes only. While due care has been taken during the compilation of this presentation to ensure that the information is accurate to the best of IMaCSs and IBEFs knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice. IMaCS and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation. Neither IMaCS nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this presentation.

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