Incentives For New Manufacturing Set Ups In Andhra Pradesh

Indian State Governments offer varied incentives under their respective state industrial development corporation policies to promote the set-up of new manufacturing units in the state. Such incentives are in the form of capital subsidies, interest subsidies, subsidized electricity tariffs, and more. The purpose of such incentive schemes is to attract investment thereby enabling infrastructure development, generating employment, developing focus sectors, and largely facilitating the overall economic development of the state.

To enable the availability of a quick summary of such general incentives offered by various Indian states, Nexdigm is releasing a series of documents focusing on providing a brief overview of such incentives offered by respective State Governments in India. This document covers information about incentives offered by Andhra Pradesh under the 'Industrial Development Policy 2023-27'.

Policy Overview

Andhra Pradesh aims to achieve a minimum of 30% contribution by industry in the State GDP, promote port-led industrial development, develop a world-class industrial eco-system and create employment generation opportunities. Thus, the Andhra Pradesh Government has released 'Industrial Development Policy 2023-27', valid from 1 April 2023 to 31 March 2027. The policy focuses on enhancing the position of the state as a preferred destination for global investment and promoting growth of domestic enterprises thereby contributing to the state's overall economic development.

Nexdigm Ratings and Observations

Note: The information/data used for the ratings is subjective based on our assessment of the policy, the experience of Nexdigm professionals in dealing with State Authorities, digitization of select statutory requirements, etc.

• The policy places a special emphasis on the MSME sector and offers multiple incentives with tailor-made incentives available to Mega & Ultra-Mega industries.
• The policy grants incentives to 9 select service sectors (Micro and Small) notified by the State Level Committee (covered in Appendix 1).
• Specific policy measures such as the establishment of 'Entrepreneurship Clubs' and 'Incubation Centers' on an experimental basis (to be scaled up later) are envisaged to enhance the start-up ecosystem.
• To retain leadership in the Ease of Doing Business ranking, the Andhra Pradesh Government is repositioning the 'Single Desk Portal' to facilitate time-bound clearances for investments and the 'YSR AP ONE' program for providing end-to-end service support to investors.
• The policy focuses on allotment of land by the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) for industrial purposes within a period of 21 days upon receipt of applications.
• The Andhra Pradesh Government has also introduced a 'Fast-track Clearance System' for Large, Mega, and Ultra-Mega projects wherein all clearances shall be provided within 21 days from the date of application.

Policy Highlights

Industry Classification

Manufacturing enterprises, for the purpose of the scheme, are classified under different categories based on the quantum of investment which has been briefly tabulated below:

Region Classification

Regions in Andhra Pradesh, for the purpose of the scheme, are classified under different categories based on the development stage of such regions. This promotes investments with relatively higher incentives in developing or underdeveloped regions for the balanced growth of Andhra Pradesh. The classification is tabulated briefly below:

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