Export & Import - Exim Policy- Industrial Policy - Andhra Pradesh, India Finance & Investment Guide

Andhra Pradesh is located on the eastern coast of India, on the Indian Ocean. Its proximity to ports gives it an added advantage as exports are concerned. It has made major improvement in its infrastructure and development in the past four years and is considered as one of the best states in India for investments.

Land area: 275,068 sq. km.
Population: 66.5 million
Capital: Hyderabad
Per Capita Income: Rs 7,155
Inflation Rate: 9.3%

Industrial Policy
New Industrial Policy 1995 of Government of Andhra Pradesh aims at an overall development of the state, which includes--increased investment in industries, both from inside and outside the State; faster implementation of the projects, successful running of the existing and new industries and improvement in the quality of life of the people of the State. The physical targets are to achieve accelerated rate of industrial growth of 20% per annum and total investment of Rs.1000 billion during the next 5 years.

The incentives offered by the government include:

Investment subsidy 20% of capital cost subject to a maximum of Rs. 2 million for industries fixed capital for units outside Hyderabad, Vijaywada and Visakhapatnam.
Additional investment subsidy @ 5% of fixed capital cost up to Rs.0.5 million by A.P. Industrial Infrastructure Corporation (APIIC), at its under-occupied Industrial Estates.
Investment subsidy 20% of fixed capital cost subject to a maximum of Rs. 2 million for captive power plants up to 1,500 KVA.
Sales Tax Deferment, (up to 14 years) equals to 135% of fixed capital investment for new industrial units.
Sales tax exemption, of 100% of fixed capital or Rs. 3.5 million, whichever is less, for small-scale sector for a period of 5 years.
25% rebate on power bills for 3 years, up to Rs. 5 million (large-and medium-scale) and Rs. 3 million for small scale industry.

Advantages Andhra Pradesh boasts the highest level of fiscal incentive for investment in India. Three major rivers provide adequate water supply for industrial use in any part of the State. The State Government actively supports investment, both foreign direct investment and domestic investment in manufacturing, mining and infrastructure sectors. The Commissionerate of industries of the State Government assists the investor in all the aspects of establishing industrial ventures in Andhra Pradesh. It is the nodal agency for investment promotion in Andhra Pradesh.

Andhra Pradesh utilizes a single form to handle all statutory clearances viz. pollution, land use certification, plant layout, power supply, etc. Its Investment Promotion Board ensures project-related approvals are handled within 4 weeks. The Commissionerate of Industries can provide one stop professional service. It offers a complete package of assistance. More specifically, the Commissionerate of Industries can provide information to enable an investor to choose the best possible location for an operation taking into account the requirements - e.g.- availability of labor, transport and other specific commercial needs.

Its capital Hydrabad is the center for a software technology housing approximately 60 reputed national and multinational software firms and providing incentives such as 100% foreign equity allowable, income tax holiday, no customs or central excise duties, re-export of capital goods allowed, and availability of high-speed data links at international tariffs.