Andhra Pradesh aims to attract investments to the tune of US$ 5 billion in the ESDM sector and create employment for 0.4 million people by 2020. N. Chandrababu Naidu, chief minister of Andhra Pradesh, shared his vision to develop the electronics industry into an important growth engine for the entire state, in a conversation with Sudeshna Das, senior executive editor, Electronics Bazaar. He aims to do this through effective use of the state’s talent pool, through continuous skills enhancement, by promoting innovation and future technologies, as well as by the creation of excellent infrastructure.
EB: What is your vision for the ESDM industry in the state?
India is one of the largest consumers of electronics goods. Demand for electronics hardware in the country is projected to touch US$ 400 billion by 2020. This will create an import bill of US$ 296 billion (on a ‘business as usual’ basis) – greater than India’s projected oil import bill at the time.
We are now on the verge of an electronics manufacturing revolution in India. The sector has been identified as one of the focus sectors under the ‘Make in India’ programme.
My target is to attract investments to the tune of ₹ 400 billion (US$ 5 billion) and create employment for 0.4 million people in the ESDM sector by 2020, in Andhra Pradesh.
My vision is to position Andhra Pradesh on the world map for electronics manufacturing, similar to how the erstwhile state was firmly placed on the world IT map.
EB: What unique strengths of the state will investors in the ESDM sector and in electronics design, specifically, find attractive?
Ever since my government took over, we have given priority to infrastructure and industrial growth. Apart from leveraging our long coastline through port-led development, we have focused on setting the platform for manufacturing through 24×7 quality power supply, developing industrial land banks and promoting our skilled resource base.
Andhra Pradesh is the first state in south India to offer 24×7 power to industry. We have identified an industrial land bank of 300,000 acres, and are targeting to add another 700,000 acres. We are planning to set up 20 electronics manufacturing clusters (EMCs) across Andhra Pradesh.
The state houses 368 engineering colleges and 78 Industrial Training Institutes (ITIs). We also have upcoming institutes of excellence such as the IIT at Tirupati, IIIT at Sri City and NIT at Tadepalligudem. We have also set up the Andhra Pradesh State Skill Development Corporation (APSSDC), and are partnering with private companies such as Siemens and Mitsubishi to set up skills development centres in the state. We are working on aligning the curriculum to industry needs.
We also have a very attractive electronics policy with best-in-class fiscal incentives that provide subsidies in areas such as land, power, skills development and taxes. Our policy complements and tops-up the incentives provided by the government of India, which makes it an extremely compelling proposition for investors in the sector. We have also established a new agency (the Andhra Pradesh Electronics & IT Agency), which offers a single window facility to ESDM companies.
EB: What is the AP government’s strategy to achieve the goals stated in the Andhra Pradesh Electronics Policy 2014-2020?
Our strategy to make Andhra Pradesh a global electronics manufacturing hub rests on building core physical infrastructure, providing best-in-class policy instruments, developing a pool of skilled manpower, and providing the most conducive business environment.
We plan to develop a mega electronics hub in Visakhapatnam, a hardware park in Kakinada and 20 EMCs across the state, including in the greenfield capital city of Amaravati. Four districts, namely, Nellore, Chittoor, Visakhapatnam and Krishna, have been designated brownfield EMCs.
EB: What are the steps taken by the AP government to ensure ‘ease of doing business’ in the ESDM sector?
I am pleased to inform you that within 15 months of the bifurcation of the state, Andhra Pradesh has made an impact through its investor-friendly initiatives. It has been ranked second among states in the country with regard to ‘ease of doing business’ as per the World Bank’s report for the Department of Industrial Promotion & Policy.
We have a ‘Single Desk Portal’, which provides all clearances/approvals within 21 working days to set up an industry in the state. Apart from this, we have introduced labour reforms, permitted self-certifications under relevant laws, and online systems for registration and filing of returns of state taxes. We have also declared the electronics hardware industry as an essential service under the AP Essential Services Maintenance Act.Our vision and continuous push is to transform Andhra Pradesh into the best investment destination, not just in India, but to compete with the best countries.
EB: What is the current investment status in the ESDM sector of the state, and what is the projection for this financial year?
My government believes in being proactive and following a targeted approach for attracting investments. Over the past 15 months, we have gained significant traction in the mobile manufacturing sector.
Foxconn has started manufacturing mobile phones from Sri City. Recently, Xiaomi’s first ‘made in India’ smartphone was launched – it was manufactured in Andhra Pradesh. Three of India’s leading handset companies – Micromax, Celkon and Karbonn — are also setting up manufacturing units in Tirupati.I want to create a mobile manufacturing hub in Andhra Pradesh. Already, with the interest shown by mobile manufacturing companies, I am hopeful that 6-7 million phones will be manufactured in Andhra Pradesh by next year, and around 30,000 – 40,000 new jobs will be created in the sector.
EB: What is the status of the different thrust areas mentioned in the AP State ESDM Policy 2014-20 such as establishing 20 EMCs, the centre for excellence on fabless semiconductors, etc?
We have identified six locations – Visakhapatnam, Vijayawada, Kakinada, Sri City, Tirupati and Anantapur—that are available for investors to start manufacturing units immediately. We will continue to identify and add EMCs in the state. Discussions are on with semiconductor companies to set up fabless semiconductor facilities, and there are plans to create a Silicon Campus too.
EB: How does the AP government plan to ensure policy implementation for promoting electronics and IT in the state?
As I mentioned earlier, AP has set up an agency (the Andhra Pradesh Electronics & IT Agency) exclusively to address the needs of the electronics and IT industries. This is headed by professionals from the industry, which will help in understanding the needs of the companies and, hence, enable us to make the process of setting up and doing business in Andhra Pradesh easy. The agency is tasked with the responsibility of creating the ecosystem needed for electronics manufacturing within identified clusters.
EB: How will the state foster entrepreneurship and an innovation culture in the ESDM sector?
Andhra Pradesh has laid heavy emphasis on promoting innovation, and developing an entrepreneurial and start-up culture in the state. We have released an ‘Innovation and Start-up Policy’ with a target to have an entrepreneur in every family in the state. We want to incubate 5000 companies and start-ups, and have also proposed to mobilise a venture capital fund to drive innovation.
Andhra Pradesh is the first state in India to have a dedicated Innovation Society to foster innovation and entrepreneurship. The society has adopted a two-pronged approach:
- Facilitate the setting up of innovation hubs in multiple locations where incubators are helping entrepreneurs to pursue their ambitions. We have provided a state-of-art environment and infrastructure for the benefit of such entrepreneurs.
- Facilitate the setting up of incubation centres at universities and institutes of higher education, with an aim to establish 100 innovation hubs across the state by 2020.
EB: What are the initiatives taken by the AP government to promote e-governance?
I have always been a keen proponent of using IT in governance. My focus is to make Andhra Pradesh the top state in terms of the quality and number of e-services in India.
We have the Mee Seva project, which has been recommended by DARPG (Department of Administrative Reforms and Public Grievances) for country-wide replication. Currently, 311 services are being offered through Mee Seva. Another 150 services are being identified. With more than 4000 kiosks and a dedicated network to support the service, Mee Seva is one of the most robust citizen service delivery platforms. We target setting up 10,000 Mee Seva centres to ensure coverage across the state.
Providing Gigabit connectivity to all villages is also my priority. Through AP Fiber Net, we aim to deliver affordable broadband to everyone by 2018. Our objective is to bridge the digital divide through rural e-commerce and digital literacy.
With e-Pragati, Andhra Pradesh will become the first state in India to conceive and execute a state-wide enterprise architecture. The project has a ‘One-Government’ approach and uses the best principles of enterprise architecture. It is a comprehensive framework for implementing e-governance and provides e-services to citizens of Andhra Pradesh. e-Pragati will extend to 33 secretariat departments and over 300 government agencies in AP, and seeks to provide 745 services under one roof.
EB: What are the innovative marketing plans and platforms (like electronics bazaars, etc) offered by the AP government to promote the ESDM sector in the state?
We have adopted a multi-pronged approach for marketing and branding the state as an ESDM destination. Our marketing is centered on concrete strengths of the state, including the availability of a large industrial land bank, single desk facilitation, 24×7 power, best-in-class policies and skilled manpower.
Additionally, visits by state government delegations to various countries and forums are being leveraged to gain media traction, and there is focus on our outreach programmes with electronics industry leaders. Separately, we also work with trade journals such as Electronics Bazaar, and participate in various exhibitions, conduct targeted road shows and investor activation campaigns.
EB: What are the outreach activities taken up by the state to ensure effective communication with the ESDM ecosystem partners, including industry and academia?
The primary outreach activities fall into the following categories:
- Periodic meetings and interaction with those in industry and the investors, to address their needs
- Targeted outreach campaigns to activate the broader investor ecosystem
- One-to-one outreach to specific investment targets—this is the mainstay of our approach to attract marquee investors to the state
Additionally, with the formation of the AP Electronics and IT Agency, which is dedicated to promoting the electronics and IT industry, we will be able to reach out to existing and prospective investors in a more focused way.
EB: What initiatives has the AP government taken to facilitate the growth of the strategic electronics segment, besides announcing the Aerospace and Defence Manufacturing Policy 2015-20? How does your government plan to roll out different initiatives related to this?
Andhra Pradesh is one of the first states to proactively come out with an attractive Aerospace and Defence Manufacturing Policy. The state is already home to strategic electronics facilities run by Bharat Electronics Limited, including its new Defence Systems Integration Complex, which is coming up in Anantapur district.
We plan to leverage these facilities to develop the necessary ecosystem to manufacture electronic components and build a supplier ecosystem in collaboration with SMEs, which will invigorate the strategic electronics segment in the state.
We are now very keen to leverage the interest of global aerospace and defence majors in setting up manufacturing facilities in the state. These initiatives, we believe, will help develop and foster the strategic electronics segment in the state.
EB: What are the plans for skills enhancement in this sector, with special focus on MSMEs?
We have formed two societies, the Society for Innovation and the Society for Electronics and IT, which will work with educational institutes to upgrade the curriculum and ensure that students are industry-ready. We have also set up the Andhra Pradesh State Skill Development Corporation, which, in partnership with the industry, will work towards developing a significant base of skilled workers ready for industrial absorption. We will focus on setting up Skill Development Centers at major industrial parks and clusters to facilitate continuous upgradation of skills.
EB: What is your message to the ESDM ecosystem partners?
Andhra Pradesh is poised for tremendous growth, and our journey has begun.The electronics industry is an important growth engine for Andhra Pradesh. The state has the second longest coastline in the country, and we are developing world-class ports to leverage this strategic advantage.Our vast industrial land bank, 24×7 quality power supply, best-in-class policy instruments, conducive business environment, availability of water for industries, abundant talent pool, along with the state’s focus on promoting innovation and future technologies, makes it one of the best investment destinations for the ESDM sector.I am personally committed to positioning Andhra Pradesh on the electronics manufacturing world map, and I welcome ESDM industry leaders to make the state their business hub.
