January 17, 2010

Important SEZ in andhra Pradesh - Andhra Economy


Andhra Pradesh with its abundant natural resources, ample human resources, a vibrant economy and unlimited opportunities, is a good investment destination.

The State of Andhra Pradesh with a clear vision and a well defined mission, has adopted a comprehensive, progressive and futuristic industrial policy to encourage investment in infrastructure and industrial sectors.

Andhra Pradesh is a leading State for Pharmaceutical industry. Hyderabad, capital city of A.P., houses several major Bulk Drug  and Pharmaceutical units like world renown  Dr. Reddy Labs, Aurobindo Pharma etc., . With  globalisation of the world Trade and the opportunities in Pharma sector, Govt. of A.P.  has decided to develop a Pharma City in the State with world class infrastructure facilities.

Locational advantage coupled with resource abundance makes Visakhapatnam an ideal destination for any entrepreneur- local or global, and that is why it is a host to many industry majors and many more are setting up mammoth projects in Visakhapatnam. After Hyderabad, Visakhapatnam is identified as potential center for development of Pharma Sector. An area of 760 hectares was identified at IDA, Parawada near Visakhapatnam for the development of the Pahrma City. .


Development of  760 hectares for Pharma City at a proposed outlay of U.S  $ 60 million.

Adequate fuel and service corridors are also being planned along with a proposed railway siding.

The Pharma City is located close to 4 lane ADB supported National Highway No.5 that connects Chennai with Kolkatta.

The Pharma City is 20 Km from the Air Port and 20 Km from the Sea Port.

The Pharma City has the benefit of South Asia's largest all weather sea port with extensive varied cargo handling facilities.

The proposed green field deep water sea port at Gangavaram and Special Economic Zone in 3680 hectares add value to the Pharma City.

Visakhapatnam has well connected domestic Air Port with flights to Hyderabad, Chennai, Mumbai, Kolkatta, and New Delhi. An International Air Port connecting the city directly to major International destinations is on the anvil.

The Pharma City has plans that takes care of Industrial water  requirements from the river Godavari through the Yeleru canal. This is being carried out under public private partnership model by Visakhapatnam Industrial Water Supply Company

The Pharma City is being provided with a dedicated 220/132/33 KV Electrical Sub station. Simhadri Power project with installed capacity of 1000 MW is being commissioned by March 2002.


Developers/ companies in Infrastructure development may take this opportunity and join APIIC as a Strategic Partner in this venture at Parawada, close to Visakhapatnam the city of investor destiny.

Interested Pharma companies may establish Bulk Drug, drug intermediaries and formulations units.


Globalisation and the developments in IT have brought in their wake a host of opportunities in the service sector, especially with regard to financial and related services.

Accepted service hubs of the past are now battling to stay ahead and new players are positioning themselves to take advantage of the emerging opportunities.

New paradigms are governing the financial sector as emerging economies compete with the developed ones.

In a country like India total insurance premiums add up to only 2% of the GDP at present which is well below the global average of 8%.

It is expected that with the present realignment of the Indian economy the premium income from insurance will grow from the present level of $ US 7.4 billion to $ US 21 billion in five years.  Health insurance in specific will swell over 5 times in the next five years.

These staggering statistics need an appropriate physical infrastructure to enable them to happen in this party of the globe.

And along with this will come the explosion in employment opportunities as the sector requires trained Actuaries, Underwriters, Surveyors, Back office professionals and other support staff.

The number of jobs in the sector will grow from 1 million today to over 2 million within a decade.

The example of the insurance sector is only the tip of the iceberg.  Other demands of the financial services spectrum like banking, offshore services and speculation will only open up the window of opportunity even further.

With the rapid industrialization of Andhra Pradesh, Hyderabad will soon be a major industrial hub for both the old and the new economy.

It is against this backdrop that the model Financial District is being launched by Andhra Pradesh Industrial Infrastructure Corporation Ltd.

The Financial District will cater to the financial services requirements which are needed to support the intense business activity in the region.

In addition to major Insurance companies, major banking and other financial institutions will soon be looking at Hyderabad.

Asset Management Companies and Venture Capital companies also have Hyderabad city on their radar screen.  .

Attempts are being made to locate a number of training institutes in insurance and financial services at Hyderabad which already has the training centres of SBI and RBI (IDRBT) .

To upgrade the Hyderabad Stock Exchange to a specialized Exchange for knowledge based companies (Information Technology, Communications, Media, and Biotechnology).

As a result of this there is a strong need for a Financial District at Cyberabad, Hyderabad.



Activity spectrum

The Financial District located near Hitec City would be best placed to meet the demands of a regional hub of international financial activity covering the following:

Insurance companies

International banks

Asset Management Companies

Venture Capitalists

Financial and Insurance Regulatory Authorities.

Stock and Commodity exchanges

Insurance Training Academies and Institutions

Project profile

The Government of A.P. has allocated 100 Acres of prime land near Indian School of Business, Hyderabad to develop this areas as an Insurance and Finance Centre to house a large number of Financial sector players by providing all the necessary state-of-the-art infrastructure.  This area is part of a high growth futuristic center for housing excellent organizations with an inviting all-round environment.  The following world class facilities are located nearby

Hitec city

The Indian Institute of Information Technology

The Indian School of Business

International Convention Centre

International Golf Course

The Jawaharlal Nehru Institute of Development Banking

World class institutes for banking and insurance

The Financial District hopes to house world class institutes for insurance and banking.

These Institutes would be designed to provide long-term and short-term education and training programmes including programmes in insurance and risk management, sales and broker training, banking and insurance technologies, etc.


Support services

The Financial District will have world class infrastructure including

Fibre optic connectivity

Excellent Telecom facilities

Excellent logistics in terms of road, rail and air connectivity

Reliable and assured power supply

Plug-and-Operate built up space

Plots of convenient size to develop individual facilities

Internationally compatible ambience

Common facilities like housing, malls, food courts, travel consultants, day care centers, gymnasiums, promenades and parks

Conference Halls

Security systems

Transnational corporations in the financial, insurance and related service sectors can set up their facilities in the Financial District to cater to the increasing demand in the immediate region as also in the rest of the Asia Pacific market.

APIIC on behalf of Government of Andhra Pradesh, is seeking investment to the extent of US $ 43 Million from Private Sector partners to develop this Financial Distrct in a Jointventure format.  The individual companies are also requested to set-up their facilities in this Financial District.

The Blue 'Chip' industry

Vision 2020

To develop the Electronic Hardware and Telecom sector and attract investments in this sector thereby making Andhra Pradesh as one amongst the leading States in the sector.

Electronics is the fastest growing industry in India.  The industry achieved a cumulative growth of 20 per cent in production and overall growth of 40 per cent in export values during the VII plan.  The electronics industry comprises of hardware (including telecom), software and services.  Electronic hardware and telecom industry, when compared to the software industry has shown conservative growth trends.  It is essential to strengthen the hardware industry to achieve a balanced growth in both software and hardware sectors.  The Ministry of Information Technology expects the Indian Electronic Hardware Sector to have a compounded annual growth rate (CAGR) of 15 per cent in future.

Reports generated by the National Association of Software Services Companies (NASSCOM) indicate that India could become a major market in the electronics industry the near future.  With expected e-business solutions exports of over US $ 5 billion by 2005 and eight million Internet connections by 2003, the demand for robust, reliable and flexible telecom infrastructure and internet devices is expected to drive the market towards higher growth figures.  The Association has also projected the personal computer penetration levels to increase from the present 4.3 million units (as on March 2000) to 30 million units by 2008.  This, added to the fact, that unlike other developed countries, India is still in its infancy in this industry, translates into infinite opportunities for investment in this sector.

Andhra Pradesh has contributed significantly to the software industry and is globally known for its enormous intellectual capital.  Hyderabad is ranked one among the largest generators and exporters of software in the country.  The Government, in its Vision 2020, has identified electronic hardware as a high growth sector and has provided guidelines to strengthen the manufacturing sector to evolve a robust economy.

The State will leverage its strengths in this sector to catapult the growth and attract investments.

 Andhra Pradesh is ranked 1st in the strategic Electronics category and has resources that are required to manufacture high value technological goods.

Andhra Pradesh is rated among the top five most investor-friendly states in India by Foreign Investment Advisory Service, a joint service of the International Finance Corporation and the World Bank.

Andhra Pradesh is the incubating house for high-skilled professionals.  It is found that out of 40 per cent of the State-based Indians who have migrated to the US, majority of them are chip designers, which forms the highest degree of skill in one of the most complex product of the hardware industry.


A suitable policy specific to the electronic hardware and telecom sector is evolved with the following objectives:

Attracting contract manufacturing and mother board assembly units.

Maximizing the State's earning potential (domestic as well as export) by strengthening the overall electronics industry.

Accelerating the growth of electronic hardware industry in the State by removing bottle-necks for the start-ups and other operating units in the State.

Upgrading and developing manpower skills required for the electronic hardware industry by facilitating training.

The policy for electronic hardware encompasses the following areas that are considered vital for the growth of this industry in the State:

Setting up hardware technology parks (HTP) at Hyderabad and Visakhapatnam in a phased manner jointly with the private sector.

Tax benefits and incentives specific to the sector.

Procedural simplifications - A system of single table clearance will be devised.

Establishment of Electronic Industry Promotional Agency.

Developmental initiatives like establishment of Special Export Zones (SEZs) around Hyderabad, setting up a venture capital fund, planning Post 2003, technical know-how development and development of global markets.

 In order to provide impetus to the electronics Industry, to enhance its export potential and to develop an efficient electronic component industry, the Electronic Hardware Technology Parks (EHTP) & the Software Technology Parks (STP) schemes offer a package of incentives and facilities.  The Scheme's salient features are:

Duty free imports are permitted for all types of goods including capital goods required by EHTP/STP units for their production provided they are not items in the negative list of imports of the EXIM Policy.

The entire production should be exported to hard currency areas.  Sales in the domestic tariff area (DTA) are permissible as per the norms decided by Department of Electronics and are also subject to fulfilment of value addition criterion prescribed.

Units should operate in custom bonded premises.

Tax holiday is admissible for such units for a block of five years in the first eight years of operation.

100% foreign equity participation is permissible under the scheme. 


Hyderabad, with its various advantages like availability of quality manpower, geographic location, real estate prices, with good social and civic infrastructure promoting a decent quality of life and with a development oriented Government, propelling and facilitating its growth, is perceived as an ideal investment destination in India.

Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC), a state owned premier infrastructure development agency has been the moving force behind the implementation and promotion of a number of Industrial Initiatives in the State.  APIIC Ltd., has set a precedence by floating a joint venture company - with the private sector giant L&T - called L & T INFOCITY Limited, in Madhapur near Hyderabad.  HITEC City provides World Class Infrastructure for Information Technology Companies to establish their product development centres.

Feature of the Proposed Hardware Park:

Spread over 1200 hectares of land strategically located at a distance of 14 KM from Hyderabad and adjacent to the proposed International Airport.

The Hardware/Industrial Park will provide developed plots, standard design factory buildings, to meet the needs of the clients of fastest growing sectors of the world economy - Hardware, Software, Warehousing and container depots etc.

The Park will provide one stop solution to the HITEC Companies, for all their business and social needs.

The Park will be an integrated township with all infrastructure facilities viz.  Housing, Hotels,dormitories, Club Houses, Recreation and sports facilities.

The Park will have common facilities like, show Rooms, Banks, shopping Complexes, etc.

The Park will have backup Captive Power Plants and state-of-the-art Sewerage system, and Effluent Waste Management System confirming to the International norms.

Tele-communications/High speed data communication facilities would be provided at site using telecommunication towers and satellite earth station.

The park management/authority will provide a single window system to ensure quick and hassle free service to client and to facilitate establishment of factories, offices, service centres etc.

The Park will be accessibility by all transport modes, road, air, rail etc.

The Park will expand into a Logistics Hub and will be the centre of regional distribution.  The Logistics Hub/Park will provide Ware-housing, container depots and distribution facilities.  Cargo movement between Air, road, rail other multimodal transportation facilities will be streamlined to facilitate and provide for smooth aggregation and dispersal of cargo.

The hardware Park will be in the suburb of the City of Hyderabad, with well-developed infrastructure.

APIIC on behalf of the Government of Andhra Pradesh is seeking investment from private sector partner to develop US $341 million Hardware Park in a joint Venture Format.  The individual companies are also requested to set up their facilities at the Hardware Park.

Leather Parks

The leather industry in Andhra Pradesh boasts of large range of products for both domestic and international markets and is one of the major producers of hides and skins in the country.  The Government has set up a full fledged Leather Training Institute and Footwear Design Centre at Hyderabad for training of man power.  In order to explore the huge list of population along with trained man power, an action plan has been formulated to kick start the development of leather industry in the State of Andhra Pradesh.  A 3-tier approach has been contemplated with 72 no. of Mini Parks covering an extent of 10 hectares in every district of the State which would primarily undertake preliminary tanning of raw hide.  16 Nos. of medium size Parks has been proposed which would produce finished leather and intermediate products.  6 Nos. Mega Parks have been proposed  which would convert the finished leather and intermediate products into finished whole product and exportable products..  This Mega Park would cover an extent of 120 hectares and mainly caters to international markets and part to domestic market.  LIDCAP entered into an MoU with CLRI, Chennai  and with APIIC for execution of the projects.
Investment Opportunities are available for:
a) Developing the Medium and Mega Leather Industrial Parks and
b) Setting up manufacturing units in the Medium and Mega Leather
    Industrial Parks. 


Projects in the Pipeline


Government of Andhra Pradesh decided to develop Greenfield Gangavaram Port on commercial format with private sector participation to cater the present and future needs of the region and catalyze its industrial development and sustainability. The port is located at Latitude 17 37'N and Longitude 18 14'E. Government of Andhra Pradesh nominated Andhra Pradesh Industrial Infrastructure Corporation Ltd., (APIIC) as the Nodal agency to develop the Gangavaram Port on commercial format.

APIIC has appointed M/s. L&T-RAMBOLL Consulting Engineers Ltd., Chennai in association with Rogge Marine Consulting GMBH, Germany for preparation of  feasibility report and selection of developer including the assistance during Technical and Financial closure..

Salient features of the Port

Deep water close to shore-line (20 m contour located at  1 to 1.5 kms. from the shore)

Absence of rock within 20 m below CD in the proposed Harbour area.

Availability of fairly flat and large tract of un-inhabited back up area of 440 hectares.

Close proximity to National/Regional Road and Rail net work.

5 Km from National High way (NH. 5)

10 km from nearest main BG railway line

15km from Visakhapatnam Airport

Field surveys and investigations (Geotechnical Investigations, Seabed Surveys & Oceanographic Investigations,Topographic Surveys, Environmental data collection) establish suitability of the site for development of deep water port facilities.

Environmental assessment study reveals that Gangavaram Port does not impinge on ecologically sensitive areas (Port area falls under CRZ III category).

Traffic potential for Gangavaram Port has been studied through a stratified structure of distributed, generated and diverted cargo based on sound assessment and assumptions.

                                                        2006       2012          2020

Potential traffic (MTPA)               17.57      35.71          71.93
Realizable traffic (MTPA)            12.67      23.79          50.51

The Port proposed to be developed as a multi-purpose port (Dry Bulk, Break Bulk, Container, Liquid Bulk etc.).

The estimated Project Development cost worked out on realizable cargo is as follows:

                        Short term                   Medium term                   Long term
                        (2006)                           (2012)                                (2020)
                        US $ 234                     US$ 325                           US$ 468

APIIC issued an Advertisement calling for Expression of Interest (EOI) from the Port developers. The following consortia responded to the EOI.

     Adani Exports Ltd., Ahmedabad.

     Ham dredging and Marine contractors,.Mumbai

     HypoVereinsbank, Munchen.

     P&O Ports, Mumbai

     Essar Investments Ltd., Mumbai

     DVS Raju & others, Hyderabad

     Zoom Developers P Ltd., Mumbai

     Kumars Group of Companies, secunderabad.

     LKPPL-LITL Joint venture, Hyderabad.

     L&T Ltd., Chennai..

    The Developer's Selection Process is in progress.  

Food Processing Park, Kuppam

A Food Processing Industrial Park at Kuppam in Chittoor district of Andhra Pradesh is proposed with following facilities:

a. Facilities:

Modern cold storages

Testing laboratories

Warehousing facilities

Internal Roads

Water supply/ power supply

Telecom facilities etc.

Location: Kuppam in Chittoor District in close proximity to NH-4

Linkage:  Easy accessibility by rail and road connecting Chennai-Bangalore.

b. Other features:

Area: Land area of  53 hectares

Cost :  projected cost  US $ 2 Million.

Finance :  A detailed feasibility report was preppred and got it appraised by A.P.State Financial Corporation.

Approvals:The Govt. of India has approved the project for the funding.

Joint Participation: M/s Mahindra Infrastructure Group

Integrated Convention Centre Complex at Hyderabad

Government of Andhra Pradesh has proposed an  Integrated Convention Centre Complex at Hyderabad
Management :Andhra Pradesh Industrial Infrastructure Corporation , Hyderabad
Developer:      To be identified.
Facilities offered:

Plenary hall with seating capacity of 3000—5000

Accommodation with suitable parking log

Breakway rooms and seating flexibility

State-of-the-art audio-visual and other sophisticated equipment

Secretariat facilities

Ample exhibition facilities

Food Courts

Cafeterias and restaurants

Other comprehensive support services

State-of-the-art hotel(s) that would be the perfect rendezvous to mix business with pleasure

An 18 hole International Proffessional Championship Golf Course, with fully equipped clubhouse and supporting services

Villas and Residential Facilities

Other Features :

Land Area : 250 acres

Location : Manikonda village, Rajendranagar Mandal, Hyderabad

Neighbourhood : Indian School of Business.

Effective steps taken:

APIIC has issued advertisement calling for Expression of Interest from the developers for this Integrated Project at Manikonda Village.  The proposals received have been evalated and the shortlisted developers were sent the RfP.  Messrs Mmmar Properties, Dubai have submitted the proposal and it is being evaluated. 

Infrastructure available for Investment

Mega Infrastrcture Park, Pashamylaram

Location:Pashamylaram in Medak district about 35 KMs from Hyderabad
Area:  640 hectares
Infrastructure Facilities :

Well planned internal roads

Adequate and assured water supply (2 MGD)

Assured and uninterrupted power supply,

Telecom cable with OFC net work

Other social and civil infrastructure.

Good Connectivity

Present Status :

240 hectares of land in I and II phases are developed.

Industries Existing :

M/s Aurobindo Pharma

ITW Signode

BPL Refrigeration

Kirby Building Products

Phillips Morris etc

Availability :

100 hectares of land are readily available

Cost :

US $ 4.50 per

Further development :

Development of third phase in an extent of 400 acres is being executed.


Industrial Park, Hindupur

Location : Hindupur ,on State Highway at  about 100 Kms from Bangalore City
Area: 300 hectares of land
Prominent Industries

WIPRO (Fluid Power Division)

Gomathy Alloy Castings

Prime Granites

Scope for establishing Industries:

Ideal for development of hardware units, textilie and spinning units, auto components etc.


 144 hectares was developed under Phase - I


120 hectares is readily available

Cost :

US $ 1.50 per

Industrial Park, Bobbili

Location :Bobbili , Srikakulam district on the  State Highway and National Highway connecting Raipur .

Area : 400 hectares

Infrastructure facilities offered :

Well planned roads and adequate water and power supply.

Scope :Ideal for  agro, mineral and jute industries.

Availability: Land to an extent of 600 acres is available

Cost : US $ 2 per

Industrial Park, Ongole

Location:Ongole district headquarters on NH connecting Chennai city
Area :400 hectares


Well connected by road and rail linkages

Adequately endowed with water and power supply.

 Common Facilities Centre  with Bank, Post Office, Telecom facilities, Courier and Internet hubs.

Availability :Land to an  extent of 240 hectares is available

Apparel Export Park, Gundlapochampally

Location :Gundlapochampally, about 18 KMs from Hyderabad.

Special Features:

An exclusive Park for promotion of garment industry mainly catering to exports


The Park is well connected by NH and SH with an inter mediate ring road to HUDA.

The Park is at a distance of 15 KMs from Air Port.

Area:  70 hectares of land

Infrastructure facilities:

Well laid internal road net work

Dedicated sub station,

Storm water drains,

Conveyance pipeline for carrying  effluents

Common Facilities Centre for Post Office, Bank, Fire Station and Container services.

Cost : US $ 2.80 Millions

20 units have been allotted and 10 units have commenced their activity.

Availability :

60 acres of land is available Cost :  US $ 4.50 per


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