Industrial Policy
About the sector

Andhra Pradesh is at the forefront of developing industrial infrastructure in line with the requirement of various manufacturing firms across sectors. The state-designated nodal agency, Andhra Pradesh Industrial Infrastructure Corporation (APIIC), has developed over 534 industrial estates, with adequate infrastructures such as power, water, ETP, STP, common facilities, plug-and-play facilities, etc. These industrial estates have accommodated 18,725 units that have invested over INR 50,000 Cr (USD 6 Bn.) while generating employment for around 4 lakh youth to date. All its industrial parks are supplied with high quality and reliable power supply 24x7 with the help of a total installed power base of 25 GW and water supply provided at the doorstep of the industry wherever needed.

APIIC is also developing various industrial parks, both for MSMEs as well as Mega industries, with the help of various schemes from the Government of India such as Industrial Corridors under NICDC, Bulk drug parks under DoCPC, EMCs under MeiTY, etc.

Andhra Pradesh is the only state to have 3 industrial corridors Viz., Visakhapatnam – Chennai Industrial Corridor (VCIC), Chennai – Bengaluru Industrial Corridor (CBIC), and Hyderabad - Bangalore Industrial Corridor for accelerated development across the State. In these three corridors, the state is developing the best-in-class Infrastructure in industrial parks in various locations including Kopparthy, Acthutapuram, Orvakal, & Krishnapatnam.

Visakhapatnam-Chennai Industrial Corridor (VCIC) hosts three industrial nodes at Vizag, Chittoor, and Kopparthy. These are planned over an extent of ~33,000 acres out of which 30% extent is presently being developed as a ‘Start-up’ Area. Various industrial infrastructure projects with an estimated investment of ~INR 5,000 Cr have been envisioned in this corridor. The infrastructure within these nodes is being developed with strategic, technical as well as financial support from ADB. Projects planned under Tranche-I, with an estimated investment of ~INR 2,300 Cr (USD 300 Mn.), are being executed at full throttle and are at advanced stages of implementation, with some of the projects targeted to achieve completion in the upcoming quarter.

Chennai – Bengaluru Industrial Corridor (CBIC) hosts an industrial node at Krishnapatnam, spread over an extent of ~12,000 acres. CBIC is being implemented with financial assistance from NICDIT. A start-up area of ~2,500 acres is currently being developed with an investment of ~INR 2,200 Cr (USD 280 Mn.).

Hyderabad Bengaluru Industrial Corridor (HBIC) hosts an industrial node covering Orvakal, Anantapur and Hindupur. Orvakal node is being developed over an extent of ~10,000 acres. The project has been approved by NICDIT and project development activities are being initiated. A project estimate for INR 1521.30 Cr (USD 200 Mn.) was submitted to NICDC.

Sector Highlights & Key Initiatives

‘YSR Jagananna Mega Industrial Hub’ (YSR JMIH) is being developed over an extent of 6,739 acres near the Kopparthy node of VCIC. Further, phase-I of the ‘YSR Electronics Manufacturing Cluster (EMC)’ adjoining the YSRJMIH is being developed over an extent of 540 acres. YSR- EMC is envisaged to attract an investment of INR 10,000 Cr (USD 1.2 Bn) within the electronics sector and will generate employment for about 25,000 people. The entire industrial region in Kopparthy is also being connected with industrial water supply through a 46 MLD water supply project the development of which is in progress.

The Government of India has accorded in-principal approval for the development of AP Bulk-Drug Park with the financial assistance of INR 1,000 Cr (USD 125 Mn), at KP Puram and Kodhada village of Thondagi Mandal of East Godavari district.

Government of India has also accorded approval for the development Multi-Modal Logistics Parks (MMLPs) at Anantapur and Visakhapatnam, while similar proposals for MMLPs at Orvakal and Kopparthy are also under discussion.

APIIC has developed Mega Food Park under the Mega Food Park Scheme by MoFPI at Mallavalli village, Bapulapada Mandal, Krishna district. A Core Processing Centre (CPC) within this park is being developed, along with basic enabling infrastructure to aid the establishment of Food Processing Units in the Park. CPC is located within Mega Food Park and is spread over an extent of 7.48 acres.

225 acres in Kopparthy, Kadapa district is proposed to be developed as a Power Equipment manufacturing HUB with Grant support from the Government of India

APIIC is also developing industrial parks through financial assistance under the MSE-CDP scheme released by the Government of India. It has already developed 11 industrial estates and 22 projects are further being proposed.

About the sector

Andhra Pradesh, with 2nd longest coastline in India, with a significant role in the merchandise trade. For the past three years, Andhra Pradesh has consistently ranked in the top three in terms of cargo traffic (FY 21-22, 156 million metric tonnes) handled at the ports, competing with Gujarat and Maharashtra. There are 6 operating ports and 4 Greenfield ports under various stages of development. The existing ports, the Vizag Port and other ports at Krishnapatnam, Gangavaram, and Kakinada ports have been acting as a gateway to not only Andhra Pradesh but all the adjoining states. In FY 2021-22, Vishakhapatnam handled ~70 million metric tonnes, while Krishnapatnam port handled ~40 million Metric tonnes per annum. The Government of Andhra Pradesh is currently developing 4 new Greenfield ports at Ramayapatnam, Machilipatnam, Bhavanapadu and Kakinada. The state currently possesses 4 fish landing centres with various cold storage units, fish processing units, chill centres, and boat handling and repair centres. To improve the livelihoods of 10 lakh families in coastal communities, the Government of Andhra Pradesh has prioritized the development of fishing harbours in 9 strategic locations under the Sagarmala initiative, 10 projects are under implementation by various departments of the state. Port Modernization and multiple port connectivity by railways, and highways are also in progress.

Andhra Pradesh was a top achiever in logistics ease in comparison with other Indian states as per (LEADS) report 2022. Andhra Pradesh has a robust air-connectivity infrastructure with 6 operational airports with aircraft movement of over 45,000 flights. The year-on-year freight traffic has been growing impressively at 33% in 2019-20, with total cargo handled standing at 3.96 metric tonnes for the year.

The state-owned godowns have a storage capacity of 676 million metric tonnes spread over 109 warehouses, operating with utilization of over 80%. The cold storage capacity stood at over 66.7 Million metric tonnes spread over 104 storage spaces. The state also has 4 Inland Container Depots (ICDs) and 16 Container Freight Stations (CFSs).

The State contributes 5% (USD 19 Bn) of total Indian exports (USD 42 Bn) in FY 2021 – 22 with a consistent improvement of 9.25% CAGR in the last three years. The top 10 export categories contributed 55.5% of the State’s export value in the Financial year 2019-20. Major export categories include Shrimp, Bulk drug & drug formulations, Ship, boat & Floating structures, Iron & Steel, and Spices. In terms of modal share, 55% of cargo is moved through rail and conveyor belts, which is higher than the national average of 35%. Road accounts for 32% of freight movement and the rest are moved either through pipelines or coastal shipping.

Sector Highlights & Key Initiatives

The State is taking an integrated approach to improve its performance on logistics. Andhra Pradesh is looking at bringing this change by optimizing people as well as cargo transport with the help of six drivers namely, ports, roads, airports, waterways, railways, and dedicated corridors for logistics. Through these efforts, the state aims to reduce time and cost delays in freight movement for Industry players and thereby strengthen Andhra Pradesh’s positioning as an Indian Maritime Gateway to the East. Additionally, it is introducing digital interventions that will enable entrepreneurs to have access to data. A dedicated Trade Portal to ease the process of exports is in place, supported by Export facilitation cells to guide potential exporters.

Infrastructure status has been granted to Logistics Sector which includes Multimodal Logistics Parks comprising Inland Container Depot (ICD), Cold Chain Facility, and Warehousing Facility, thereby supporting investments into the sector through special allowances reserved for infrastructure projects such as low-cost financing etc.

Multi-Modal Logistics Parks: The State is developing Multi Modal Logistics Parks (MMLP) in Anantapur and Visakhapatnam under the Bharatmala Pariyojana. This MMLP will integrate various forms of transport and help reduce the delays caused due to various documentation needed at ports. Andhra Pradesh has also submitted multiple projects under the PM Gati Shakti program which will further increase the speed of logistics, reduce congestion, and thereby reduce the cost of logistics within the state. 4 locations have been identified by Indian railways to help set up Gati Shakti Multi-Modal Cargo Terminal (GCT). 121 Projects worth more than Rs 1 lakh Crs (USD 13.23 billion) have been identified connecting to Port-led industrialization, Port Modernisation, Port Connectivity, Coastal Community Development & Coastal Shipping and inland waterways.

Waterways: The State intends to develop 6 Inland Waterways (NW 4), including Kakinada to Rajahmundry (50 Kms) – Krishna Canal, Bhadrachalam to Rajahmundry (171 Kms) – Godavari River, Rajahmundry to Vijayawada (139 Kms) – Eluru Canal, Wazirabad to Vijayawada (157 Kms) – Krishna River and Vijayawada to Peddaganjam (113 Kms) – Commanur Canal.

Fishing Harbours: The State intends to develop 6 Inland Waterways (NW 4), including Kakinada to Rajahmundry (50 Kms) – Krishna Canal, Bhadrachalam to Rajahmundry (171 Kms) – Godavari River, Rajahmundry to Vijayawada (139 Kms) – Eluru Canal, Wazirabad to Vijayawada (157 Kms) – Krishna River and Vijayawada to Peddaganjam (113 Kms) – Commanur Canal.

Air Cargo: The State is developing a Greenfield International Airport at Bhogapuram with State of art Cargo handling facilities. The air Cargo facilities at Vijayawada & Visakhapatnam will act as hubs in the air cargo network while those at minor airports planned at Kadapa, Kurnool, Tirupati, and Nellore will be operated as spokes for the trans-shipment of Cargo.

Marquee Investments