Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF

Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF

Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA For updated information, please visit www.ibef.org 1 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Contents Andhra Pradesh An Introduction Infrastructure Status Business Opportunities Doing Business in Andhra Pradesh State Acts & Policies For updated information, please visit www.ibef.org 2 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Andhra Pradesh Factfile Visakhapatnam, Vijayawada, Tirupati, Warangal, Guntur, Kakinada, Nellore and Kurnool are some of the key cities in the state. The most commonly spoken language of the state is Telugu. Hindi, English and Tamil are the other languages used. Parameters Andhra Pradesh Capital Hyderabad Geographical area (sq km) Administrative districts (No) Source: Maps of India

Andhra Pradesh is located in the Southern peninsula of India and has a coast line of 974 km. The state is bound on the North by Odisha and Chhattisgarh, on the West by Maharashtra and Karnataka, on the South by Tamil Nadu and on the East by the Bay of Bengal. For updated information, please visit www.ibef.org 275,100 23 Population density (persons per sq km)* 308 Total population (million)* 84.6 Male population (million)* 42.5 Female population (million)* 42.1 Sex ratio (females per 1,000 males)* 992 Literacy rate (%)* 67.7 Sources: Andhra Pradesh Government Website (www.aponline.gov.in), *Provisional Data Census 2011 ANDHRA PRADESH AN INTRODUCTION 3 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Andhra Pradesh in Figures (1/2) Parameter Andhra Pradesh All-States Source

8.6 100 CMIE, 2010-11, current prices 17.4 15.9 CMIE, 2004-05 to 2010-11, current prices 1,530.8 1,324.3 CMIE, 2010-11, current prices 16,094.7 199,627.0 Central Electricity Authority, as of March 2012 66,070,782 903,727,208 Telecom Regulatory Authority of India, as of January 2012 1,342,750 13,350,938 Ministry of Communications & Information Technology, as of December 2011 National Highway length (km) 4,537 71,772 Ministry of Road Transport & Highways, Annual Report 2011-12 Major and minor ports (No) 1+14 12+187 Indian Ports Association 9 133 Economy GSDP as a percentage of all states GSDP Average GSDP growth rate (%)*

Per capita GSDP (US$) Physical Infrastructure Installed power capacity (MW) Wireless subscribers (No) Broadband subscribers (No) Airports (No) For updated information, please visit www.ibef.org Airport Authority of India * Calculated in Indian Rupee Terms ANDHRA PRADESH AN INTRODUCTION 4 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Andhra Pradesh in Figures (2/2) Parameter Andhra Pradesh All-States Source Literacy rate (%) 67.7 74.0 Provisional Data Census 2011 Birth rate (per 1,000 population) 17.9 22.1 SRS Bulletin (www.censusindia.gov.in), 2011 FDI Equity inflows (US$ billion) 6.7 160.0 Department of Industrial Policy & Promotion, April 2000 to January 2012 Outstanding investments (US$ billion)

946.8 11,318.3 CMIE (2011-12) 100 881 www.pppindiadatabase.com Social Indicators Investment Industrial infrastructure PPP projects (No) SEZ (No) Notified as of July 2012, 76 386 Special Economic Zone, SRS: Sample Registration PPP: Public-Private Partnership, SEZ: www.sezindia.nic.in System For updated information, please visit www.ibef.org ANDHRA PRADESH AN INTRODUCTION 5 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Advantage Andhra Pradesh (1/2) Hub for Knowledge-Based Industries Andhra Pradesh has emerged as a key state for the knowledge-based industry including IT, pharmaceuticals and biotechnology. Over 70 of the 500 top global corporations are present in the state. Policy and Fiscal Incentives The state offers a wide range of fiscal and policy incentives for businesses under the Industrial Investment Promotion Policy, 2010-2015. Additionally, the state has well drafted sector-specific policies. Rich Labour Pool 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. For updated information, please visit www.ibef.org ANDHRA PRADESH AN INTRODUCTION 6 Andhra Pradesh AUGUST

2012 THE RICE GRANARY OF INDIA 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 states GSDP grew at a Compound Annual Growth Rate (CAGR) of 16 per cent between 2004-05 and 2011-12. Vast natural gas reserves found in the KrishnaGodavari basin have opened up immense possibilities for the state economy. It is also a leading agricultural state in the country. Stable Political Environment The state has a stable political environment with a single-party government. The State Government is committed towards creating a progressive business environment. For updated information, please visit www.ibef.org ANDHRA PRADESH AN INTRODUCTION 7 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Economic Snapshot GSDP At current prices, the Gross State Domestic Product (GSDP) of Andhra Pradesh was US$ 141.0 billion in 2011-12. Between 2004-05 and 2011-12, the average annual GSDP growth was 16.0 per cent. This growth was mainly driven by the service and secondary sectors. Andhra Pradeshs GSDP 2011-12 141 2010-11 129.2 2009-10 103.4 2008-09 92.9

2007-08 90.6 2006-07 66.4 2005-06 CAGR 16.0% 57.8 2004-05 49.9 0 20 40 60 80 100 120 140 160 US$ billion Source: CMIE For updated information, please visit www.ibef.org ANDHRA PRADESH AN INTRODUCTION 8 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Economic Snapshot NSDP At current prices, the Net State Domestic Product (NSDP) of Andhra Pradesh was about US$ 127.1 billion in 2011-12. The average NSDP growth rate between 200405 and 2011-12, was about 16.1 per cent. Andhra Pradeshs NSDP 2011-12

127.1 2010-11 116.5 2009-10 93.1 2008-09 83.6 2007-08 81 2006-07 59.4 2005-06 CAGR 16.1% 51.7 2004-05 44.7 0 20 40 60 80 100 120 140 US$ billion Source: CMIE For updated information, please visit www.ibef.org ANDHRA PRADESH AN INTRODUCTION 9 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA

Economic Snapshot Per Capita GSDP Per Capita GSDP 1,800 1,655.8 1,600 The average per capita GSDP increased by 14.8 per cent between 2004-05 and 2011-12. 1,530.8 CAGR 14.8% 1,400 1,236.5 1,104.9 1,121.8 1,200 US$ The per capita GSDP of Andhra Pradesh increased from US$ 628.8 in 2004-05 to US$ 1,655.8 in 2011-12. 1,000 800 628.8 719.1 818.5 600 400 200 0 Source: CMIE For updated information, please visit www.ibef.org ANDHRA PRADESH AN INTRODUCTION 10 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Economic Snapshot Per Capita NSDP

The average per capita NSDP increased by 14.9 per cent between 2004-05 and 2011-12. Per Capita NSDP 1,600 1,400 1,200 1,492.2 1,380.5 CAGR 14.9% 1,113.9 987.2 1,009.4 1,000 US$ The per capita NSDP of Andhra Pradesh increased from US$ 563.3 in 2004-05 to US$ 1,492.2 in 2011-12. 800 600 563.3 644.5 731.7 400 200 0 Source: CMIE For updated information, please visit www.ibef.org ANDHRA PRADESH AN INTRODUCTION 11 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Economic Snapshot Percentage Distribution of GSDP In 2011-12, the tertiary sector at US$ 72.9 billion, contributed 51.7 per cent to the GSDP (at current prices). It was followed by secondary

sector, contributing 24.6 per cent (US$ 34.7 billion) and the primary sectors contribution of 23.7 per cent (US$ 33.4 billion). The secondary sector had fastest growth of 19.3 per cent followed by tertiary sector (17.3 per cent) and primary sector (14.3 per cent) between 2004-05 and 2011-12. Percentage Distribution of GSDP 100 90 80 70 50.6 CAGR 17.3 % 51.7 60 50 40 21.5 24.6 27.9 23.7 2004-05 2011-12 30 20 10 0 Primary Sector Secondary Sector 19.3 % 14.3 % Tertiary Sector Source: CMIE For updated information, please visit www.ibef.org ANDHRA PRADESH AN INTRODUCTION 12 Andhra Pradesh AUGUST 2012

THE RICE GRANARY OF INDIA Economic Snapshot Agricultural Production In 2011-12^, the total area under food grain production in the state was estimated at 7.0 million hectares. The total production of food grains in the state was estimated at 17.3 million tonnes in 201112^. Major food grains# produced in the state are rice, maize, pulses and jowar. Annual Production (000 tonnes) - 201112^ Crop Sugarcane 15,912 Rice 11,919 Cotton 4,352* Maize 3,547 Mango 3,363** Total Pulses 1,412 Chillies 892 Onion 877 Groundnut 786 Bengal Gram 693

Sugarcane, cotton, chillies, onion, groundnut and turmeric are some of the other major crops produced in the state. Turmeric 523 Black Gram (Urad dal) 336 In 2011-12^, the total production of oilseeds in the state was estimated at 1.2 million tonnes. Jowar (Sorghum) 304 Red Gram (Tur dal) 228 Food grains include rice, jowar, bajra, maize, ragi, wheat, pulses and other millets. # Green Gram (Moong 124 dal) Source: Directorate of Economics and Statistics, Government of Andhra Pradesh (www.apdes.ap.gov.in) ^Second Advance Estimates as on January 5, 2012 * 000 Bales of 170 kgs each **In 2010-11 For updated information, please visit www.ibef.org ANDHRA PRADESH AN INTRODUCTION 13 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Economic Snapshot Exports Andhra Pradeshs exports increased at a Compound Annual Growth Rate (CAGR) of about 22.38 per cent between 2006-07 and 2010-11. Exports from Andhra Pradesh 25 CAGR 22.38 %

In 2010-11, exports from the state was US$ 20.10 billion. Computer software contributes more than 30 per cent to the total exports from the state. Drugs & pharmaceuticals, fine chemicals, animal, marine and leather products, engineering products, agriculture and agro based products, minerals and mineral products, handlooms, handicrafts, textiles, gems and jewellery, electronics and electrical products are other major export items. For updated information, please visit www.ibef.org US$ billion 20 16.9 15.42 14.25 15 10 20.1 8.96 5 0 2006-07 2007-08 2008-09 2009-10 2010-11 Source: Andhra Pradesh Socio Economic Survey 2011-12 ANDHRA PRADESH AN INTRODUCTION 14 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Economic Snapshot FDI Inflows &

Investments According to the Department of Industrial Policy & Promotion, the cumulative FDI inflows from April 2000 to January 2012 amounted to US$ 6.7 billion. The state has had a healthy FDI inflow over the years. For the period April 2011 to January 2012, FDI inflows amounted to US$ 779 million. In 2011-12, the total outstanding investments in the state were US$ 946.8 billion. Of the total outstanding investments, electricity sector accounted for around 34.4 per cent followed by manufacturing sector at 19.7 per cent and services sector at 18.6 per cent. Break up of Outstanding Investments by Sectors (2011-12) 3.3% Electricity 11.8% Manufacturing 34.4% 12.2% Services Real Estate Irrigation 18.6% 19.7% Mining Source: CMIE For updated information, please visit www.ibef.org ANDHRA PRADESH AN INTRODUCTION 15 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Contents Andhra Pradesh An Introduction Infrastructure Status Business Opportunities

Doing Business in Andhra Pradesh State Acts & Policies For updated information, please visit www.ibef.org 16 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Physical Infrastructure Roads As of March 2012, Andhra Pradesh had 17 National Highways running through it and covering a length of 4,537 km. Roads network under Andhra Pradesh Roads and Buildings Department was 70,394 km, as of September 2011. As of September 2011, road density thousand population was 0.86 km. As of April 2012, there were 41 Public-Private Partnership (PPP) projects in the roads sector that are at various stages of development. Road Type Source: Maps of India per Road Length* (km) As of September 2011 State Highways 10,470 Major District Roads 32,205 Rural Roads 22,989 Source: Andhra Pradesh Socio Economic Survey 2011-12 *under Andhra Pradesh Roads and Buildings Department For updated information, please visit www.ibef.org

INFRASTRUCTURE STATUS 17 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Physical Infrastructure Railways As of March 2011, Andhra Pradesh had a total railway network of 5,264 km, out of which 4,348.44 km is under the control of the South Central Railway with Secunderabad as the headquarters. The state had a total of 677 railway stations and the broad guage rail network of 4,996.61 km, as of March 2010. The Mass Rapid Transit Service (MRTS) project is expected to carry about 1.5 million passengers per day by 2015 and 2.2 million passengers per day by 2025. The total cost for the MRTS project has been estimated at US$ 2.9 billion. US$ 0.3 billion is being given as central assistance by Government of India under the Viability Gap Funding (VGF) scheme. The state is the first to have a Public Private Partnership (PPP) Metro Rail project sanctioned by Government of India. For updated information, please visit www.ibef.org The metro rail project is environmental friendly and is expected to reduce pollutants by about 3,100 Tonnes Per Annum (TPA). In September 2010, construction work of the project has been awarded to Larsen & Toubro Limited through competitive bidding process.

Andhra Pradesh Railway Network (As of March 2010) Name of the Railway South Central Railway Southern Railway No of Stations Total Route (in kms) 586 4,348.44 * 16 120.85 Sources: Directorate of Economics and Statistics East Coast Railway 75 570.64 Website - www.apdes.ap.gov.in, Hyderabad Metro Rail Website -www.hyderabadmetrorail.in *As of March 2011 INFRASTRUCTURE STATUS 18 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Physical Infrastructure Airports The state has an international airport at Hyderabad and domestic airports at Visakhapatnam, Tirupati, Rajahmundry, Warangal, Vijayawada, Donakonda, Kadapa and Puttaparthy.

Hyderabad is connected to several key international destinations such as Amsterdam, Bangkok, Chicago, Frankfurt, Dubai, Singapore, Sharjah, London and Kuala Lumpur, besides all major destinations across India. The Rajiv Gandhi International Airport near Shamshabad (about 25 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 was US$ 560 million. The total land area is 5,495 acres for the airport. GMR-Hyderabad International Airport Limited (GHIAL), Shamsabad Started operations in March 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 40 million passengers per year and one million tonne of cargo. Total built-up area of 900,000 sq m. A third-party airframe maintenance, repair and overhaul (MRO) facility was set up by MAS-GMR Aerospace Engineering Company Ltd a joint venture company of GHIAL and Malaysian Aerospace Engineering Sdn. Bhd. (MAE). A flight academy was established at the airport. Source: GHIAL website, www.hyderabad.aero For updated information, please visit www.ibef.org INFRASTRUCTURE STATUS 19 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Physical Infrastructure Ports Andhra Pradesh has the second-highest cargohandling port. The Visakhapatnam port ranks amongst the top three of the 12 major ports in the country. In 2011-12, it had a port traffic of 67.42 million tonnes. Visakhapatnam Port Traffic (million tonnes)

80.0 70.0 64.6 63.9 65.5 2007-08 2008-09 2009-10 68.0 67.4 2010-11 2011-12 60.0 50.0 40.0 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 14 intermediate and minor ports. 30.0 20.0 10.0 0.0 Source: Ministry of Shipping, Government of India For updated information, please visit www.ibef.org INFRASTRUCTURE STATUS 20 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Physical Infrastructure Power (1/2) As of March 2012, Andhra Pradesh had a total power generation

installed capacity of 16,094.73 MW, which comprised 9,048.86 MW, under state utilities, 3,948.71 MW under private sector and 3,097.16 MW under the central utilities. Installed Power Capacity (MW) 18,000.0 16,000.0 15,035.5 13,409.4 14,000.0 12,000.0 16,094.7 11,866.8 11,639.1 2007-08 2008-09 10,000.0 Of the total installed power capacity, 11,199.08 MW was contributed by thermal power, 275.78 MW and 885.34 MW was contributed by nuclear and renewable capacity, respectively. Hydro power contributed the rest of 3,734.53 MW of capacity. The entire capacity of gas-based power plants is contributed by the private sector. Per capita consumption of electricity was 952 kWh in 2010-11. For updated information, please visit www.ibef.org 8,000.0 6,000.0 4,000.0 2,000.0 0.0 2009-10 2010-11 2011-12 Source: Central Electricity Authority INFRASTRUCTURE STATUS 21

Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Physical Infrastructure Power (2/2) AP Gencos Hydro-Power Plants The integrated Andhra Pradesh State Electricity Board (APSEB) was restructured in 1999 to form the following companies: Segment Company Name Power Generatio n Andhra Pradesh Power Generation Corporation Limited (AP Genco) Power Transmissi on Transmission Corporation of Andhra Pradesh Limited (AP Transco) Power Distributio n Central Power Distribution Company of Andhra Pradesh Limited (APCPDCL), Hyderabad AP Gencos Thermal Power Plants 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 For updated information, please visit www.ibef.org INFRASTRUCTURE STATUS 22 Andhra Pradesh AUGUST 2012

THE RICE GRANARY OF INDIA Physical Infrastructure Telecom According to Telecom Regulatory Authority of India (TRAI), Andhra Pradesh had nearly 66.07 million wireless subscribers and 2.34 million wire-line subscribers as of January 2012. According to Department of Telecommunications, Government of India, Andhra Pradesh had 4,266 telephone exchanges and 107,407 Public Call Offices (PCOs) as of December 2011. Optical fiber cable networks of BSNL with 44,500 kms, Reliance with 6,000 kms, Bharat with 3,450 kms and TATA with 1,700 kms, provide wide range of communication network to Andhra Pradesh. As of March, 2011, there were 16,150 post offices in the state. For updated information, please visit www.ibef.org Telecom Infrastructure (As of January 2012) Wireless Subscribers 66,070,782 Wire-line Subscribers 2,348,940 Broadband Subscribers 1,342,750* Telephone Exchanges Public Call Offices (PCOs) 4,266* 107,407* Sources: Telecom Regulatory Authority of India, Department of Telecommunications, Annual Report 2011-12, Ministry of Communications & Information Technology *As of December 2011 INFRASTRUCTURE STATUS 23 Andhra Pradesh

AUGUST 2012 THE RICE GRANARY OF INDIA Development Projects: Urban Infrastructure Under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), 51 projects costing around US$1,142.3 million have been sanctioned for Hyderabad, Visakhapatnam, Vijayawada and Tirupati. Some of the key areas of development are roads/flyovers, water supply, storm water drainage, old city drains, solid-waste management and mass rapid transport system. As of April 2012, total 18 projects of value US$ 235.1 million have been completed. These projects were located in Hyderabad, Vijayawada and Vishakhapatnam and related to roads, water supply, drains/storm water drains and sewerage. The state has 150 Urban Local Bodies (ULBs); comprising 16 corporations, 108 municipalities JNNURM, Ministry of Urban Development, and 26Sources: nagarapanchayaths. www.urbanindia.nic.in Andhra Pradesh Socio Economic Survey 2011-12 For updated information, please visit www.ibef.org Water Supply The average water supply in various Urban Local Bodies (ULBs) is 85 LPCD. Sewerage System and Solid-Waste Management System Solid waste collection efficiency is 95 per cent across the cities of Andhra Pradesh. During the period 2007 Area coverage of the to 2011, 43 water

sewerage system in supply schemes with an the major cities varies estimated cost of US$ from 10 per cent to 45 191.8 million were per cent. completed adding 370.44 MLD of water, raising the installed Source: Andhra Pradesh Socio Economic Survey capacity from 1,229.24 2011-12 to 1,599.68 MLD LPCD: Litres Per Capita per Day MLD: Million Litres per Day Some of the urban development projects in Hyderabad Outer Ring Road Project P.V.Narasimha Rao Elevated Expressway Flyover at Lunger House Junction Hussain Sagar Lake and Catchment Area Improvement Project Sources: Andhra Pradesh Socio Economic Survey 2011-12, Hyderabad Metropolitan Development Authority INFRASTRUCTURE STATUS 24 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Development Projects: Key Public Private Partnership Projects Sector PPP Type Project Cost (US$ million) Stage Ports BOOT 3,652.2 Constructio n

Energy BOO 3,650.3 Constructio n Gangavaram Port Ports BOT-Toll 358.6 Constructio n Cuddapah Mydukur Kurnool Road Roads BOT-Toll 344.6 Constructio n Urban Development DBFOT 195.0 Constructio n Four-Laning of Hyderabad Karimnagar Ramagundam Road Roads BOT-Toll 295.2 Bidding Narketpally Addanki Medaramitla Road Roads BOT-Toll 260.2 Bidding Urban Development Lease

54.3 Bidding Tourism Lease 13.0 Bidding Project Name Vodarevu Nizampatnam Ports and PortBased Corridor Development Krishnapatnam Ultra Mega Power Project Integrated Solid Waste Management for Hyderabad Bus Terminal and Commercial Development at Musheerabad Health Spa and Resort Source: www.pppindiadatabase.com Four-Laning of Khammam Tallada Roads BOT-Toll 143.5 EOI EOI-Expression Devarapalli Road Of Interest, BOOT: Build-Own-Operate-Transfer, BOT: Build-Operate-Transfer, DBFOT: Design-Build- Four-Laning of Perecherla Thokapalli Road For updated information, please visit www.ibef.org Four-Laning of Warangal Khammam Road Finance-Operate-Transfer, Roads BOT-Toll 113.5 EOI BOO: Build-Own-Operate Roads BOT-Toll 103.5 INFRASTRUCTURE STATUS EOI 25 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA

Development Projects: SEZs (1/3) There are 37 operational SEZs in the state, as of July 2012. Some of the Operational SEZs in Andhra Name/Developer Pradesh Location Primary Industry Vishakhapatnam Multi Product Nanakramguda IT/ITeS Achutapuram, Visakhapatnam Textile Mandal, Visakhapatnam Pharmaceuticals CMC Limited Ranga Reddy District, Hyderabad IT/ITeS DivyaSree NSL Infrastructure Pvt Ltd Ranga Reddy District, Hyderabad IT/ITeS DLF Commercial Developers Ltd Ranga Reddy District, Hyderabad IT/ITeS Hyderabad Gems SEZ Ltd Ranga Reddy District, Hyderabad Gems and Jewellery Mandal IT/ITeS Pocharam, Rangareddy IT Medak Bio-technology Visakhapatnam SEZ

Andhra Pradesh Industrial Infrastructure Corporation Ltd Brandix India Apparel City Private Ltd Ramky Pharma City Pvt Ltd L&T Phoenix Info Parks Pvt Ltd Infosys Technologies Ltd Vivo Bio Tech Ltd Medak Dist For updated information, please visit www.ibef.org Source: www.sezindia.nic.in SEZ: Special Economic INFRASTRUCTURE STATUS Zone 26 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Development Projects: SEZs (2/3) The state has 6 SEZs with valid in-principal approvals, as of July 2012. SEZ with Valid In-Principal Approvals Name/Developer South Coast Infrastructure Development Co of Andhra Pradesh Private Ltd (SCIDCAP) Lepakshi Knowledge Hub Private Ltd Location NH-5 between Prakasam and Nellore District Ananthapur Primary Industry Building Materials Multi Product M/s Sri Kubera Infracom India Ltd Sadasivpet, Medak Strategic Manufacturing M/s Drugs & Pharmaceuticals Manufactures Association Nakkapalli Mandal, Visakhapatnam Pharmaceuticals /APIs/Formulations M/s Vivimed Labs Ltd M/s. Planet SEZ Private Limited

Boyapalem, Naruva & Chittivalasa villages, Ranasthalam Mandal, Srikakulam Visakhapatnam Chemicals & Pharmaceuticals Petroleum and Oil & Gas Industry Source: www.sezindia.nic.in For updated information, please visit www.ibef.org INFRASTRUCTURE STATUS 27 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Development Projects: SEZs (3/3) There are 109 SEZs with formal approvals in the state, as of July 2012. Some of the SEZ with Formal Approvals Name/Developer Location Primary Industry Chippada, Visakhapatnam Pharmaceuticals Hyderabad IT Visakhapatnam Multi Product Chillakur Mandal, Nellore Multi Product Mahabubnagar Agriculture and Livestock Nellore Multi Product Rassai Properties & Industries Ltd Hindupur, Anantapur

Multi Services Infosys Technologies Ltd Pocharam Village, Ghatkesar Mandal, Rangareddy IT Nellore Leather M/s Divis Laboratories Ltd WIPRO Ltd APIIC M/s Krishnapatnam Infratech Pvt Ltd Deccan Infrastructure and Land Holdings Ltd Andhra Pradesh Industrial Infrastructure Corporation Ltd (APIIC) Andhra Pradesh Industrial Infrastructure Corporation Ltd(APIIC) Stargaze Properties Private Ltd For updated information, please visit www.ibef.org Kancha Imarath, Maheswaram IT/ITeS/ ElectronicSource: Hardware www.sezindia.nic.in INFRASTRUCTURE STATUS 28 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Social Infrastructure Education (1/2) The state has a literacy rate of 67.7 per cent according to the provisional data of Census 2011; the male literacy rate is 75.6 per cent and the female literacy rate is 59.7 per cent. In 2010-11, a total of 13.31 million students were enrolled in 101,204 schools. There were 66,834 primary schools, 15,421 upper primary schools, 18,776 high schools and 173 higher secondary schools. The total number of teachers were 476,555. Number of Colleges (201112) Colleges

Government Colleges 251 Aided Colleges 179 Government Junior Colleges 806 Private Aided Junior Colleges 275 Private Un-Aided Junior 2,850 Source: Andhra Pradesh Socio Economic Survey 2011-12 Colleges Number of Colleges (201112) Course In 2011-12, the total number of students enrolled in engineering and management colleges were 304,200 and 86,905, respectively. The Hyderabad University and the Osmania University are among the leading universities of the country. Engineering 705 Master of Computer Application (MCA) 644 Master of Business Administration (MBA) 926 Bachelor of Pharmacy 290 Polytechnics 251 Source: Andhra Pradesh Socio Economic Survey 2011-12 For updated information, please visit www.ibef.org INFRASTRUCTURE STATUS 29 Andhra Pradesh

AUGUST 2012 THE RICE GRANARY OF INDIA Social Infrastructure Education (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. In 2011-12, there were 5,202 junior colleges with a total enrolment of 0.87 million students. The Technical Education Department of Andhra Pradesh supports 705 engineering colleges. For updated information, please visit www.ibef.org Life-Sciences Institutes 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. INFRASTRUCTURE STATUS 30 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Social Infrastructure Health Andhra Pradesh has 1,624 Primary Health Centres (PHCs), 281 Community Health Centres (CHCs), 58 Area Hospitals, 17 District Hospitals, 12,522 Sub-Centres and 267 Urban Health

Centres. Leading Hospitals in Hyderabad Apollo Hospital Yashoda Hospitals Care Hospital There are 233 Hospitals with 16,114 beds under the control of Andhra Pradesh Vaidya Vidhana Parishad (APVVP), which manages secondary level hospitals in the state. Health Indicators (2010) Birth Rate* 17.9 Wockhardt Kamineni Hospital Nizams Institute of Medical Sciences MNJ Institute of Oncology and Regional Cancer Centre Indo-American Cancer Institute and Research Hospital Death Rate* 7.6 Global Hospital Infant Mortality Rate** 46 Medwin Hospital Life Expectancy at Birth (years) Medicity Hospital Male (2002-06) 62.9 L V Prasad Eye Institute Female (2002-06) 65.5 Krishna Institute of Medical Sciences Sources: Ministry of Health and Family Welfare, Government of India, Sample Registration System (SRS) Bulletin 2011 (www.censusindia.gov.in) *Per thousand persons For updated information, please visit www.ibef.org ** Per thousand live births INFRASTRUCTURE STATUS 31 Andhra Pradesh

AUGUST 2012 THE RICE GRANARY OF INDIA 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 Visakhapatnam are well known golf courses in the state. Kuchipudi is the classical dance form from Andhra Pradesh. It is known for its graceful movements and its strong narrative / dramatic character. Major Stadiums and Sports Complexes in Hyderabad Swarnandhra Pradesh Sports Complex G. M. C. Balayogi Athletic Stadium Gachibowli Indoor Stadium Fateh Maidan Sports Complex The Lal Bahadur Stadium The Tirupati temple in Southern Andhra Pradesh makes the state one of the leading religious tourism spots in the country. Aquatics Complex AP Tourism promoted convention centres in Hyderabad include Taramati Baradari, Hyderabad International Convention Centre, Shilpa Kala Vedika, HITEX, Marriott Convention Centre, Ramoji Film City, Katriya De Royal Convention Facilities. Shooting Range, Hyderabad Central University For updated information, please visit www.ibef.org Kotla Vijay Bhaskar Reddy Indoor Stadium SAAP Tennis Complex, Fateh Maidan Rajiv Gandhi International Cricket Stadium INFRASTRUCTURE STATUS 32 Andhra Pradesh

AUGUST 2012 THE RICE GRANARY OF INDIA Contents Andhra Pradesh An Introduction Infrastructure Status Business Opportunities Doing Business in Andhra Pradesh State Acts & Policies For updated information, please visit www.ibef.org 33 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Key Industries 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 and 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. As of September 2011, the state has received 7,346 proposals for large scale industries, out of which, 3,132 proposals have gone into production with an investment of US$ 15.4 billion, providing employment opportunity to 479,900 persons and 525 proposals with investment of US$ 18.0 billion are under implementation stage. For updated information, please visit www.ibef.org 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 Automotive & Auto Components Gems and Jewellery BUSINESS OPPORTUNITIES 34 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Key Industries IT and IT-enabled Services (1/2) The share of IT exports from Andhra Pradesh occupies around 13.9 per cent of national IT exports. IT sector contributes to about 49 per cent of total exports from all sectors in the state. Total IT exports from the state were about US$ 7.68 billion in 2010-11. Total employment generated by IT and ITeS industry in the state increased from 264,375 in 2009-10 to 279,438 in 2010-11. In 2010-11, employment generated by the IT sector has grown by 15,063. Andhra Pradesh has emerged as a state that provides the right climate for the growth of IT business and is now one of the most preferred destinations in the country. As of July 2012, there were 43 IT/ITeS notified

SEZs in the state. For updated information, please visit www.ibef.org Some of the Key Players Mahindra Satyam Microsoft IBM Cognizant BUSINESS OPPORTUNITIES 35 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Key Industries IT and IT-enabled Services (2/2) Formerly, Satyam Computers, Mahindra Satyam was established in 1987 and has its global headquarters at Hyderabad and several offices in 39 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. Microsoft India Development Centres (MSIDC) was established in 1998. It is located in Hyderabad on a 54-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 over 270 patents in last five years. IBM is a leading global IT services and solutions provider with operation in over 170 countries across the world. Products offered by companys India operations 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. 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 2011, the company earned revenue of US$ 6.1 billion. In December 2009, Cognizant invited 120 personnel working in Invensys Rail, at Hyderabad, to work on its global product research and development tie-up with the latter. Mahindra Satyam Microsoft

IBM Cognizant For updated information, please visit www.ibef.org BUSINESS OPPORTUNITIES 36 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Key Industries Pharmaceuticals and Biotechnology (1/2) 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. Jawaharlal Nehru Pharma City has been set up at Parawada, Visakhapatnam. This is an Integrated Industrial Park for bulk drug manufacturers, pharmaceutical companies and fine chemical manufacturers. The Industrial Park is spread over in 2,143 acres, out of which 611.37 acres has been notified as a pharmaceutical SEZ industrial park. The State Government has helped to develop the pharmaceutical and biotechnology industry through specific policies promoting knowledgebased 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 2008. For updated information, please visit www.ibef.org Some of the Key Players Albany Molecular Research Inc (AMRI) Novartis Matrix Laboratories Ltd Indian Immunologicals Ltd (IIL)

BUSINESS OPPORTUNITIES 37 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Key Industries Pharmaceuticals and Biotechnology (2/2) Albany Molecular Research Inc (AMRI) Novartis AMRI research centre is located in the ICICI Knowledge Park in Hyderabad. AMRI 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 US-based resources. Novartis has presence in over 140 countries and employs 115,000 people. Has been present in India for the last 64 years in the healthcare sector. Has its healthcarerelated IT/ITeS and R&D facility in Hyderabad. The company has a development centre at Hyderabad which integrates development franchises of the company through information technology. The facility also operates as a global centre for marketing and sales, sourcing, business planning and analysis. In 2011, the company earned revenue of US$ 58.5 billion. Mylan Laboratories Ltd (formerly known as Matrix Laboratories Ltd) is a subsidiary of US-based Mylan Inc. The company has four USFDA-approved facilities located at Hyderabad and one USFDA-approved facility located at Visakhapatnam. It is one of the worlds largest manufacturers and suppliers of Active Pharmaceutical Ingredients (APIs) for a wide range of therapeutic categories, including antibacterials, central nervous system agents, antihistamine/anti-asthmatics, cardiovasculars, antivirals, antidiabetics, antifungals, proton pump inhibitors and pain management drugs. In 2011, total revenue of the company was US$ 671.4 million. IIL produces a range of veterinary vaccines such as Foot and Mouth Disease (FMD) vaccines, anti-rabies vaccines, 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 Vietnam. Mylan Laboratories Ltd Indian Immunologicals Ltd (IIL) For updated information, please visit www.ibef.org BUSINESS OPPORTUNITIES

38 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Key Industries Apparel and Textiles The state is a leading producer of cotton, with a production of about 4.35 million bales (bales of 170 Kgs each) in 2011-12 (As of January 5, 2012). Medium grade and superior long staple varieties of cotton are predominantly grown in the state. The State Government has identified textile sector as one of the long term growth engines. To utilise potential of the sector, the State Government has already established five Apparel Export Parks (AEPs) and seven textile parks. It proposes to establish another 5 Apparel Export Parks (AEPs) and 12 Textile Parks in the state. There are over 80 spinning mills including a number of 100 per cent export-oriented units with stateof-the-art machinery, producing cotton, synthetic and blended yarns. Between April 2006 and February 2012, 55 handloom clusters were sanctioned under Integrated Handlooms Development Scheme (IHDS) in the state. The state has, moreover, emerged as a large textile processing centre. Over 100 units are there in the state with a processing capacity of around 13 million metres of cloth per annum. The number of power looms in the state aggregates to around 44,000 employing approximately 110,000 workers. Apparels, fabrics and furnishings have been identified as potential products by the state. Total handloom & textiles exports the state stood at around US$ 0.40 billion in 2010-11. BUSINESS OPPORTUNITIES 39 For updated information, please visitfrom www.ibef.org Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Key Industries Agri and

Processed Food Sector (1/2) 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 one of the largest producer of rice in India. It is a leading producer of cash crops such as tobacco, groundnut, dry chilly, turmeric, oilseeds, cotton, sugarcane and jute. The state is one of the largest producers of horticulture products with production of around 26.58 million tonnes (excluding cut flowers and coconuts) in 2010-11. The state produces some of the finest varieties of mangoes, grapes, guavas, papayas and bananas. Andhra Pradesh ranks 1st in production of sweet orange, lime/lemon, papaya and oil palm. For updated information, please visit www.ibef.org As per the advance estimates, the area under food grains during the year 2011-12 is expected to be 7.0 million hectares in the state. Some of the Key Players CongAgra Foods Cargill India Pvt Ltd ITC Andhra Pradesh Dairy Development Cooperative Federation (APDDCF) BUSINESS OPPORTUNITIES 40 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA

Key Industries Agri and Processed Food Sector (2/2) ConAgra Foods Cargill India Pvt Ltd ITC Andhra Pradesh Dairy Development Cooperative Federation (APDDCF) ConAgra Foods Inc, USA, 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 has dominant market position in the edible oils and branded foods sectors. Brands include Sundrop, Healthy World, ACT II and Rath. Agro Tech Foods Limited, an affiliate of ConAgra Foods have their registered office at Secunderabad. 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 a joint venture with EID Parry for a sugar refinery at Kakinada 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. In 2010-11, the total revenue of the company was around US$ 7.0 billion. 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. APDDCF runs 12 dairy plants and manufactures milk products under the Vijaya brand name. These plants together have a capacity of 2,437 thousand litres per day. Products include butter, Ultra-High-Temperature (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). For updated information, please visit www.ibef.org BUSINESS OPPORTUNITIES 41 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Key Industries Agriculture and Allied Industry (1/2)

Forestry Andhra Pradesh has 6.23 million hectares of forest area, which accounts for 22.65 per cent of the total geographical area of the state. In 2011-12, the contribution of forestry & logging to the GSDP was estimated at US$ 1,233 million. Fisheries The fisheries sector has been identified as one of the six growth engines in agriculture sector under, Vision-2020 of the state. Among Indian states, Andhra Pradesh is one of the largest producers of brackish-water shrimp and fresh-water prawn production. In 2010-11, the total production of fish in the state was 1.56 million tonnes compared to 1.29 million tonnes a year ago. Production of fish comprised of around 1,270,000 tonnes of inland fish (including fresh water prawn & brackish water shrimp) and around 290,000 tonnes of marine fish. The contribution of fisheries to GSDP in 2011-12 was estimated to be US$ 3.05 billion. The Andhra Pradesh Government has entered into an agreement with the USbased World Tuna Development International (WTDI) to develop tuna fishery in the Bay of Bengal. The Government have sanctioned US$ 2.94 million for construction of four Fish Landing Centres in the state under Assistance to States for Developing Export Infrastructure and other Allied Activities(ASIDE) funds. Sources: Indian Institute of Economics, www.iieasia.in, Andhra Pradesh Socio Economic Survey 2011-12, www.aponline.gov.in, For updated information, please visit www.ibef.org BUSINESS OPPORTUNITIES 42 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Key Industries Agriculture and Allied Industry (2/2) Animal husbandry is rapidly expanding in the state and is playing a significant role in improving the rural economy. This sector provides gainful employment to a large number of small and marginal farmers and agricultural labourers and enhance their economic status. Activities of the animal husbandry department

have been oriented towards improving health of livestock and increased production of milk, eggs and meat. As of March 2011, the state had 5,015 institutes supporting production in the animal husbandry sector and 5,300 institutes for health of livestock. For updated information, please visit www.ibef.org Product Milk (million tonnes) Egg (in million) Meat (million tonnes) Productio n (2010-11) Production (2009-10) 11.2 10.4 20,130 19,390 0.74 0.68 Source: Andhra Pradesh Socio Economic Survey 201112. BUSINESS OPPORTUNITIES 43 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Key Industries Petroleum, Chemicals and Petrochemicals According to the Ministry of Petroleum and Natural Gas, the net natural gas production was about 1,383 million cubic metre for 2010-11. 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 has 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, Andhra Pradesh Industrial Infrastructure Corporation (APIIC), holds 51 per cent in the SPV and AP Genco, holds the balance. Hindustan Petroleum Corporation is setting up a Diesel Hydrotreater Unit of 2.2 MMTPA at Visakhapatnam refinery with an investment of US$ 569 4 million. The project is in the stage of completion. In October 2009, the Department of Petrochemicals, Government of India, signed a Memorandum of Agreement (MoA) with 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 generated in the PCPIR are estimated to be around US$ 74.6 billion. The MMTPA: Million Metric Tonne Per Annum State Government is in the process of finalising the Master Plan and obtaining Environmental BUSINESS OPPORTUNITIES 44 For updated information, please www.ibef.org Clearances. The total areavisit of PCPIR is 603.58 square kilometers. Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Key Industries Tourism (1/2) Arrival of International Tourist in Andhra Pradesh (in 1000 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 12th in international tourist arrivals and accounted for 1.8 per cent of the total international tourist arrivals in India in

2010. With 21 per cent share of domestic travelers, the state ranked first in domestic tourist arrivals. Forty projects have been sanctioned for the state by the Ministry of Tourism during the Eleventh Five Year Plan period (2007-2012, up to March 2011), at a project outlay of US$ 42.53 million. The State Government has identified For updated information, please visit www.ibef.org Hyderabad, Visakhapatnam, Tirupati, 800 000) 770 789 795 2007 2008 2009 600 400 200 0 Arrival of Domestic Tourist in Andhra Pradesh (in 180 million) 160 140 127.9 132.7 2007 2008 157.5 120 100 80 60

40 20 0 2009 Source: Ministry of Tourism, Government of India BUSINESS OPPORTUNITIES 45 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Key Industries Tourism (2/2) Upcoming Mega Projects Kadapa Heritage Circuit Tirupati Heritage Circuit Charminar Area Mega Sagar Park near Nagarjuna Sources: Ministry of Tourism , Government of India and Andhra Pradesh Socio Economic Survey 2011-12 For updated information, please visit www.ibef.org BUSINESS OPPORTUNITIES 46 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Key Industries 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. Around 34 large and medium tanneries in the state produce about 40 million sq ft of processed hides and skins per annum. Hyderabad and Nellore are the key leather production clusters in the state. 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 Small Scale Industries (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. For updated information, please visit www.ibef.org Leather Industries Development Corporation (LIDCAP) LIDCAP is the nodal agency for leather industry development in the state. Plans to establish 72 mini-industrial parks on 25 acres each 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 has 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 Special Purpose Vehicle (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 units with Source: Leatherprocessing Sector in AP, ILC Profile, capacities ranging between six and 25 tonnes LIDCAP and a total capacity of 300 tonnes in a floor Website: www.lidcap.org, www.aponline.gov.in area of 220 acres. BUSINESS OPPORTUNITIES 47

Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Key Industries Mines and Minerals The states mineral production was valued at US$ 4.76 billion in 2010-11. Andhra Pradesh contributes about 15 per cent to the countrys mineral value production. Coal is the major mineral produced in the state which contributed 32.73 per cent of the total value of mineral production in the state in 200910. Production of manganese ore increased by 35.69 per cent and petroleum (crude) by 5.19 per cent in 2009-10. Production of barytes increased by 26.92 per cent, ochre by 28.92 per cent, dolomite by 22.91 per cent, and coal 13.20 per cent in 200910. For updated information, please visit www.ibef.org Contribution to National Minerals (%) in the Country Barytes 94 Ball Clay 63 Corundum 61 Diamond 40 Calcite 39 Mica 28 Garnet 26

Ilmenite 23 Limestone 20 Dolomite 15 Sources: Indian Mineral Scenario States, Ministry of Mines Website, www.mines.nic.in BUSINESS OPPORTUNITIES 48 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Key Industries 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. Andhra Pradesh Gems and Jewellery Park is a joint venture between the IOI Corporation and Andhra Pradesh 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. The state has estimated reserves of 12.10 million tonnes of gold ore and 1.82 million carats of diamond. In the state, diamond is mostly found in Cuddapah, Anantapur, Bellary, Kurnool, Kistna, Godavary and Guntur districts. For updated information, please visit www.ibef.org Hyderabad Gems SEZ Limited (HGSEZ) Situated at Hardware Park near the Rajiv Gandhi International Airport. Spread across 200 acres, the Hyderabad SEZ houses about 75-100 diamond, gold and watch manufacturing units. The SEZ also has a training centre for

manufacturing jewellery and cutting and polishing of diamonds BUSINESS OPPORTUNITIES 49 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Key Industries Other Growth Sectors (1/2) Hospitality, Leisure and Entertainment Being a major tourist hub in the country, the state is making rapid strides in the retail and entertainment segment. 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 state. Hotel Projects Under Planning Promoters Location Taj GVK Hotels & Resorts Hyderabad Pride Hotel Hyderabad Duet India Hotels Ltd Hyderabad Hotel Leela Ventures Hyderabad For updated information, please visit www.ibef.org BUSINESS OPPORTUNITIES 50 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Key Industries Other Growth Sectors (2/2) Retail Organised retail is catching up fast with significant mall development in the pipeline.

Shopping malls are being developed in suburban and peripheral areas followed by central business district. Electronics Hardware Semiconductors Key segments within the electronics hardware industries in the state: An investment of US$ 3 billion has been announced for setting up a fabrication unit in the Fab City, Hyderabad.to manufacture semiconductors used in computers, mobile phones and other digital devices Telecommunications Industrial electronics Test and measuring equipment Reliance Retail opened its first 'Reliance Fresh' stores in Hyderabad and Secunderabad in late 2006. Computer and consumer electronics Strategic electronics Reebok has opened its largest store in the world in Hyderabad. GVK group opened GVK one a world-class shopping space measuring over 7,00,000 sq ft at Hyderabad in May 2009. 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). GVK one also hosts a 1,257seat INOX multiplex along with a themed entertainment centre Funzone in Hyderabad. For updated information, please visit www.ibef.org Fab City has been allotted 1,200 acres, close to the new international airport. The Electronics Hardware Policy of the state offers various incentives such as exemptions, reimbursements, facilitating technical education, etc. to promote the industry.

Sources:. http://industriesportal.apcgg.gov.in, GVK group website: www.gvk.com BUSINESS OPPORTUNITIES 51 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Contents Andhra Pradesh An Introduction Infrastructure Status Business Opportunities Doing Business in Andhra Pradesh State Acts & Policies For updated information, please visit www.ibef.org 52 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Single-Window Approval Mechanism Andhra Pradesh is the first state in the country to have enacted the Industrial Single Window Clearance Act No 17 of 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$ 219,442. State level committees can clear those exceeding US$ 219,442. Above the district and state level committees is an empowered 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$ 109 in the first instance and US$ 219 in the second instance.

For updated information, please visit www.ibef.org DOING BUSINESS IN ANDHRA PRADESH 53 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Key Investment Promotion Offices (1/2) Agency State Investment Promotion Board (SIPB) Description 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 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. Controls the office of the Principal Secretary, Industries & Commerce, Commissioner of Industrial Promotion Major Industries, Commerce and Export Promotion Ministry 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. For updated information, please visit www.ibef.org DOING BUSINESS IN ANDHRA PRADESH 54 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA 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) For updated information, please visit www.ibef.org DOING BUSINESS IN ANDHRA PRADESH 55 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Contact List Agency Contact Information Andhra Pradesh Industrial Infrastructure Corporation 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: [email protected] Website: www.apiic.in Department of Industries and Commerce For updated information, please visit www.ibef.org Industries and Commerce Department 2nd Floor, D Block, Room No-348A Secretariat Hyderabad - 500022 Phone: 91-040-23454449 Fax: 91-040-23452985 E-mail: [email protected] Website: http://industriesportal.apcgg.gov.in/ DOING BUSINESS IN ANDHRA PRADESH 56 Andhra Pradesh AUGUST 2012

THE RICE GRANARY OF INDIA Key Approvals Required (1/2) S No Approvals and Clearances Required Respective Departments of State 1 Registration, Industrial Entrepreneurs Memorandum (IEM), Industrial Licenses Registrar of Firms 2 Allotment of Land/Shed in Industrial Estates or Industrial Areas Andhra Pradesh Industrial Development Corporation 3 Acquisition and Alienation of Government Lands Chief Commissioner of Land Administration (CCLA) Estimated Time 7 Days 7 Days for up to 1,000 sq m 21 Days for above 1,000 sq m 45 Days Panchayat Raj Department 4 Urban Development Authority Site and Building Plan Approval Town and Country Planning 7 Days Municipality Urban Development Authority 5 Change of Land Use Town and Country Planning 45 Days Municipality

6 Consent for Establishment under Pollution Control Green 7 Days AP Pollution Control Board Orange Red 21 Days 45 Days Source: Commissionerate of Industries, Government of Andhra Pradesh For updated information, please visit www.ibef.org DOING BUSINESS IN ANDHRA PRADESH 57 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Key Approvals Required (2/2) Approvals and Clearances Required S No Consent for Operation 7 Green Estimated Time 7 Days Orange 21 Days AP Pollution Control Board Under Pollution Respective Departments of State Red 45 Days Control 8

No-Objection Certificate for Fire Safety 9 Permission for Establishment of Distillery 10 Licence for Possession and use of Rectified Spirit 11 Licence for Possession and use of Denatured Spirit 12 VAT/CST Registration 13 Power Feasibility 14 Power Connection 15 Approval of Factory Plans 16 Factory License 17 Sanction of Water Supply Fire Services Department 15 Days 30 Days Excise Department 7 Days 7 Days Commercial Taxes Department Power Distribution Companies Factories Department 7 Days 7 Days 23 Days 7 Days 7 Days 7 Days Hyderabad Metro Water Supply and Sewerage

Source: Commissionerate of Industries, Government23 of Andhra 18 Water Connection Days Pradesh Board DOING BUSINESS IN ANDHRA PRADESH 58 For updated information, www.ibef.org Permission please to Drawvisit Water from Rivers 19 Irrigation Department 30 Days Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Cost of Doing Business in Andhra Pradesh Parameter Cost Estimate Land Price (US$ per sq m) 20 to 200 Labour Cost (minimum wages per day) US$ 2.8 to US$ 5.5 Lease Rent (US cents per sq ft per month) 36.6 to 61.0 Electricity (US cents per kWh) Commercial: 8.0 to 18.7 Industrial: 7.6 to 12.5 Residential Rent (US cents per sq ft per month) 12.6 to 62.5 Five-Star Hotel Room (US$ per night) 125 to 512 Water Cost (US$ per 1,000 litres per month) Commercial (Hyderabad ): 0.42 to 1.04 Industrial (Hyderabad): 0.52 to 2.08 Sources: Andhra Pradesh Government Websites and Industry Sources, Ministry of Labour and Employment, Government of India, Andhra Pradesh Electricity Regulatory Commission, Hyderabad Metropolitan Water Supply & Sewerage Board

For updated information, please visit www.ibef.org DOING BUSINESS IN ANDHRA PRADESH 59 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Contents Andhra Pradesh An Introduction Infrastructure Status Business Opportunities Doing Business in Andhra Pradesh State Acts & Policies For updated information, please visit www.ibef.org 60 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA State Acts & Policies (1/3) Industrial Investment Promotion Policy (IIPP) 2010-2015 Objective To build a strong and vibrant industrial economy that spins off large capital formation in the state and advances inclusive development of all sections of people and industry, that creates increasing employment opportunities, and raises wage incomes to higher levels through skill upgradation so as to improve the quality of life of citizen of the state. Read mor e Information and Communications Technology (ICT) Policy 2010-2015 Objective s To make Andhra Pradesh as one of the fore runners in the IT sector in the country. The objective will be achieved through the following: Provision of congenial, industry-friendly and proactive climate for IT companies to locate, grow and sustain their operations in most competitive and hassle-free environment.

Creation of employment opportunities to the educated youth of all sections of the society across all regions. Achieving higher levels of exports resulting in enhanced productivity, and augmentation of GSDP. To spread IT to nook & corner of the state. Leverage IT as a tool for the socio-economic development of the state. Read mor e For updated information, please visit www.ibef.org STATE ACTS & POLICIES 61 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA State Acts & Policies (2/3) Food Processing Policy 2010-2015 Objective To give a special focus to food processing industry by extending the benefits for a period of 5 years from April 2010 to March 2015. The policy will cover areas like Horticulture, Agriculture, Animal husbandry, Fisheries, Agro food processing industries and allied industries. Read mor e Tourism Policy 2010 Objective s To position the state competitively for attracting private sector investments in tourism and hospitality sectors. To target the incentives to the private sector better as per the State Government's priorities in terms of geographical areas and tourism products To focus on maximum generation of employment in the sector by development of Human Resources through capacity building Read mor e For updated information, please visit www.ibef.org

STATE ACTS & POLICIES 62 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA State Acts & Policies (3/3) Electronic Service Delivery Policy 2003 Objective To evolve a comprehensive and generic policy that permits rapid growth of electronic delivery of services under e-governance projects such as e-Seva, APonline, e-Procurement, CARD and i-Community. Read mor e Biotechnology Policy 2001 Objective 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. Read mor e For updated information, please visit www.ibef.org STATE ACTS & POLICIES 63 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Annexure Exchange Rates Year INR equivalent of one US$ 2004-05 44.95

2005-06 44.28 2006-07 45.28 2007-08 40.24 2008-09 45.91 2009-10 47.41 2010-11 45.57 2011-12 47.94 Average for the year For updated information, please visit www.ibef.org ANNEXURE 64 Andhra Pradesh AUGUST 2012 THE RICE GRANARY OF INDIA Disclaimer India Brand Equity Foundation (IBEF) engaged GenX Info Technologies Pvt Ltd (GenX) to prepare this presentation and the same has been prepared by GenX 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 For updated information, please visit www.ibef.org presentation to ensure that the information is accurate to the best of GenXs and IBEFs knowledge and

belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice. GenX 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 GenX 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. DISCLAIMER 65

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