IT in Andhra Pradesh  AP is the first state to initiate some of the key e-Governance projects in

the country

 Presently the share of IT exports of our state is 12.4% of National IT

exports.

 IT Employment in AP occupies 11.4% of National IT employment.  AP IT sector contributes 0.85% share to the National GDP (National

GDP share is 5.7%).

 AP ranks 4th in IT performance in the country.  For the year 2011-2012, AP growth rate is 16% as against National

growth rate of 15.7%.

 The total IT turnover from the State for the year 2011-2012 is

Rs.53,246 crores (Exports:Rs. 40,646 crores + Domestic:Rs.12,600 crores) .

 IT contributes to 39% of total exports from AP.  AP has 56 IT SEZs, out of 353 approved IT SEZs in the country.

Growth of IT in AP (1999-2012) PARTICULARS

1999

2012

INCREASE

No. of IT companies

194

1268

6.5 times

Employment

12,000

318624

26 times

Exports (Rs.Crores)

284

40646

143 times

Built-up Space (sft)

200,000

60 million

300 times

AP: Reliable Source for technical & business talent Large pool of English-speaking graduates

1920 U.G. Colleges

4,48,152 graduates/year

698 Engineering Colleges

2,69,175 engineers/year

713 MCA Colleges

50,148 seats/year

971 MBA Colleges

78,340 seats/year

174 Polytechnic Colleges

40,785 seats/year

Advantage AP The Most Preferred IT/ITES/ EHW Destination  Strategically located – North of South and South of North of the country.  Excellent Air, Rail & Road network – More than 30 flights, 160 trains and nearly 2000 buses connect Hyderabad everyday with other parts of India.  Direct connectivity to London, Bangkok, Frankfurt, Singapore, Kaula Lampur and the Middle East.  Has optic fibre linked telephone exchanges with telephone density of 11:8 per 100 people.  Multi-cultural social fabric.  Low cost living with excellent civic amenities.  Lowest crime rate – 193 per 1,00,000 population.

ICT Policy 2010 - 2015: Objectives •

To achieve an Export turnover of US $ 14,000 million

•

To create additional direct IT employment of 125 thousand

•

To contribute to 50% of annual total exports from the State

•

To grow at a annual rate of 17%

IT Infrastructure Initiative: Information Technology Investment Region

•

ITIR - 202 Sq. Km. (50,000 acres) delineated corridor for encouraging Investments in IT/ITES/EHW/ESDM sectors

•

Expected to become a significant driver of economic activity in Hyderabad

Key Highlights  Direct Revenues – Rs.310,849 crores

 IT Investment potential – Rs.219,440 crores  IT Exports – Rs.235,000 crores  Direct employment – nearly 15 lakhs  Indirect employment – nearly 53 lakhs

 Increase in tax revenue to State – Rs.30,170 crores

Information Technology Investment Region (ITIR)

7

SE Z

9

SEZ 3 2 4

8

SEZ SE Z

1

6 10

5

SE Z

12

13 11 SE Z

SE Z

Electronic Hardware Industry – Scenario •

The Electronic Hardware Industry has potential of US $ 1.75 trillion Industry world wide . It is expected to reach US $ 2.4 Trillion by 2020

•

Size of the global electronics industry vis-à-vis other major industries

4.40 times oil, petrol and minerals 2.75 times chemical and plastics 2.45 times food, beverages and tobacco 2.44 times transportation 2.20 times electricity, gas and water

•

The demand for the Indian market was US $ 45 billion in 2008-09 and is expected to reach US $ 400 billion by 2020/ USD $ 1 billion in India

•

The Indian electronics hardware production constitutes only around 1.31% of

the global production. •

The domestic electronics production in 2008-09 was about US $ 20 billion. At the current rate of growth the domestic production can cater to a demand of US$

100 billion in 2020 as against a demand of US$400 billion. This aggregates to a demand supply –gap of US $ 300 billion. by2020

Electronic Hardware Industry – Scenario

•

The status of Electronic Industry in Andhra Pradesh at present is:

- AP State ranks No.5 in the National Electronic industry - AP State contributes to 7.5per cent of electronic production in the Country - AP reached Rs.6500 crores production and Rs.650 crores exports and direct employment of 60000+ by 2010-2011 - Houses 300+ electronic industries with 60,000 employee base and in highly specialized lines. - For attracting Electronic Hardware Industry, to set up and grow their operations in the State of Andhra Pradesh, the new Electronic Hardware Policy 2012-2017 is on anvil. - State of Andhra Pradesh aspires to achieve an EHM(Electronic Hardware Manufacturing) Revenue(both domestic & Export s) of more than Rs.66.682 crores and employment of 1,75,000 by 2017. - Special facilitation and incentives for Electronic Hardware - in the areas of Industrial Electronics, Communication & broadcast equipments, Computers & Peripherals, Strategic electronics & components (Semiconductors, Solar & Displays) etc., through Electronic Hardware Policy 2012-2017.

ANDHRA PRADESH ELECTRONIC HARDWARE POLICY 2012-2017 Salient Features • • • • • •

• • • .

Convert existing clusters such as FAB City and Aeronautical SEZ into Centers of excellence, giving fresh impetus on Infrastructure Create 4 Hubs covering NEWS (North, East, West, and South) in and around ORR, Hyderabad consisting of 300 Acres of Multi product Electronic SEZ’s and another 200 acres for the supporting Electronic Industry. Create a joint Government-Industry committee to market India and attract investment in India. Incentivizing investments in Andhra Pradesh by creating a model where the subsidy or rebate given to a Electronic Hardware industry is determined on the basis of the value addition. R&D will be the key focus areas for Andhra Pradesh as competing on volume is not feasible. IP creation by local units will be given prime importance. Common facilitation Centre/Incubation Centre/Cluster should be established with full pledged testing facilities to meet the global quality parameters such as EMC, Safety Testing, RF, Microwave Testing, Environmental Testing, and Endurance Testing & Other Functional Testing. This should be closer to the Electronic Industries Cluster. Creating Hardware Manufacturing Clusters in both SEZ and non-SEZ(domestic) areas in tune with the Policy Guidelines of Electronic Hardware Promotion program of Govt of India Create a fund under the management of a working committee comprising representatives of industry bodies and government, with an equal stake to promote design, manufacturing, assembling, and Innovation and packaging business. Organizing exhibitions, conferences and taking Electronic Hardware companies located in the state as part of trade delegations to domestic, national and international exhibitions.

ANDHRA PRADESH ELECTRONIC HARDWARE POLICY 2012-2017 Salient Features •

•

•

•

•

Recognizing the importance of involving Industry Stake Holders, President, ELIAP has been included as a member of Consultative Committee on IT Industry (CCITI) which is a industry – Government body for administration of incentives and providing comfort and facilitation for Electronics Hardware Sector. Nodal Agency: The state Government will create a Nodal wing within IT& C Department which will act as a single window to deal with Customs / Excise and other State and Central Government agencies. The agency will also coordinate with Government of India for expediting the release of Special Incentive Package Scheme (SIPS) applicable to mega projects of National importance. HR Initiative: The Government of Andhra Pradesh will strive to implement the recommendations made by the national Skill development Program - NSDP. It will create an Institution mechanism similar to JKC which will coordinate with Engineering Colleges, ITI etc to implement the NDSP recommendations. New Infrastructure: The state Government will set up New Electronic Hardware Park in an area of 150 Acres with options of SEZ and Non SEZ giving a greater discretion to electronic industry the option of operating in SEZ or Non SEZ. State of the Infrastructure with all basic amenities such as internal Roads, water, power and other common facilities will be made available to the investors. Renewable Energy: The state Government will encourage unites using Renewable energy. Units using Renewable source of energy with minimum 40% of their power requirements coming from renewable sources for their operations and manufacturing will be eligible for additional incentives such as Electricity tax exemption for 5 years. Sales tax exemption for two additional years against the Carbon Credits earned year on year basis.

ANDHRA PRADESH ELECTRONIC HARDWARE POLICY 2012-2017 Salient Features •

International Outreach: Participation of the IT &C Department Government of Andhra Pradesh with industry association such as ELIAP, MAIT ELCINA in International ICT and Electronic exhibition and conference world wide and also strive to conduct International scale ICT Event in the state to project Andhra Pradesh as the most ideal destination for investment. The State Government will also explore to tie up opportunities with major electronic clusters located globally to give Marketing and Technology access to Local electronic design and manufacturing companies based in Andhra Pradesh.

•

Encouragement of “Made for India” products: The state Government will encourage the use of products made in India for developmental initiatives such as e-governance plan, UID, SSA, R-APDRP and all other e-governance initiatives at the state level. This initiative of the state Government is to reduce the use of imported products in all state and central Government program. On a case basis where ever required the state Government from time to time will request Government of India to impose Anti Dumping duty of goods which are directly contradicting the Made in India Electronic products. State Government procurement with higher local value addition will be encouraged and additional basis points in Technical evaluation will be given to companies using products with greater Indian value addition and local language interface.

ANDHRA PRADESH ELECTRONIC HARDWARE POLICY 2012-2017 Salient Features • General Incentives for all Electronic Hardware companies: -100% reimbursement of stamp duty, transfer duty and Registration fee paid on sale/lease deeds/ mortgages& Hypothecations on the first transaction. -50% reimbursement of stamp duty, transfer duty and Registration fee paid on sale/lease deeds /mortgages& Hypothecations on the 2nd transaction. -Admissibility of Industrial Power category tariff. -50% to Micro, 40 % to small & 25 % to medium & large scale industry power subsidy on power bills for a period of 5 years from the date of commencement of commercial operations -Reimbursement/Grant of 50% exhibition subsidy for participating in the national/ international exhibitions limited to 9 sq m space. -20 % Investment subsidy limited to Rs.20 Lakhs for micro & small industries and additional 5% incentive subsidy for women, SC, ST Entrepreneurs. -3% interest rebate limited Rs.5 Lakhs per year for 5 years. -10% subsidy on capital equipment for technology up gradation limited to Rs.25 lakhs as one time availment to an eligible company. -50% subsidy on the expenses incurred for quality certification limited to Rs.4 Lakhs (Conformity European(CE),China, Compulsory Certificate (CCC),UL Certification, ISO, CMM Certification, SA, RU etc., -25% subsidy on cleaner/ green production measures limited to Rs.10 Lakhs -25% rebate in land cost limited to 10.00 lakhs in Industrial estates, industrial parks, sez’s, hubs, parks & clusters. -50% reimbursement/ grant of cost involved in skill up gradation & training the local manpower limited to Rs 2,000/- per person.

ANDHRA PRADESH ELECTRONIC HARDWARE POLICY 2012-2017 Salient Features •

Specific Incentives to Focus Areas in Electronic Hardware sector: -Allocation/ Reservation of 20% of Order value to electronic hardware SMEs in State Govt promoted Projects - Special incentives forStart up, Micro, Small & Medicium, R&D, SC/ST/Women Entrepreneurs/Tier II/Tier III locations and existing units (other than large industries) •

Priority Project Incentive for ESDM Sector A special negotiated package of incentives will be offered for priority projects in ESDM sector proposed to set up by the Electronic Hardware Companies for manufacture of ESDM including PV/Fab/ Semiconductor design and Manufacturing, Assembling, Testing and Packaging plants. The priority projects in ESDM sector are defined as such projects promoted by the Electronic Hardware companies having the present employment of more than 100, existing investment of more than Rs.10 crores and turnover of more than Rs.20 crores for the last three years and projected future employment potential of 500.

• Provision of Land for construction of own Manufacturing facility: Allotment of Government land to the Electronic Hardware Industry are made subject to availability, fulfillment of certain eligibility criteria by the applicant company, and on payment of land cost & development cost, as determined from time to time by the allotment agencies, i.e., APIIC/HMDA and the concerned local Statutory Authorities.

INITIATIVES OF GOVT.OF ANDHRA PRADESH  Information Technology & Communications (Promotions) Dept, GoAP issued a notification on Electronic Hardware Policy (2012-2017) vide GO MS No 27, Dt. 24.07.2012  In tune with National Policy on Electronics, 2011, GoI – To promote

Electronic Industry in the State  IT&C Dept, GoAP also issued guidelines for “Creation of Electronic Hardware Manufacturing Clusters” in the State vide GO MS No 28, Dt. 24.07.2012  Proposed Greenfield EMCs : Two in Hyderabad Region & one in Visakhapatnam  Jointly by AP Industrial Infrastructure Corporation Ltd (APIIC) ~ IT/EHW infrastructure development nodal agency of GoAP & Software Technology Parks of India (STPI), Hyderabad, GoI  APIIC has identified three land parcels for Greenfield EMCs Development  Hyderabad Region - Electronic City (E-City) at FAB City (602 Ac.) & Maheshwaram (310 Ac) : Located close to Outer Ring Road (ORR) of Hyderabad  Visakhapatnam Region – Parawada (~100 Ac) : ~ 15 km from 15 Visakhapatnam City

ANDHRA PRADESH OPPORTUNITY • AP State • Contributes 7.5% to the electronic production of the country • Ranks No.5 in the National Electronic Industry Manufacturing & No. 3 in in attracting Investments in India. • Has potential to achieve atleast 10- 15% of National Share of Electronic Manufacturing by 2020 (in view of growing contribution of Software exports and new Automobile manufacturing industries in Andhra Pradesh.) • AP ~ Segment wise Contribution • Instrumentation & Industrial Electronics (25%) , Strategic Electronics (33%) Consumer electronics & Telecom (each about 13%) ,Component Manufacturing (9%) and Computer Hardware (7%).

16

IT&C Dept., GoAP

ELECTRONIC HARDWARE MANUFACTURING CLUSTERS IN ANDHRA PRADESH

E-CITY

MAHESHWARAM Hyderabad Region

PARAWADA Visakhapatnam Region

PROJECT BACKGROUND  The demand for Electronics in Indian market was USD 45 Billion in 2008-09 and is expected to reach USD 125 Bn by 2014 & 400 Bn by 2020.  Inadequate infrastructure, stringent tax structures, limited R&D etc. are impediments to growth of Electronics sector in India.  In order to ensure desired growth in the sector with the objective of meeting the demand domestically,  Government of India (GoI) proposes to offer incentives to attract domestic & global investments into Electronics System Design and Manufacturing (ESDM) sector with Electronic Hardware Manufacturing Clusters (EMC) as a means- Issued notification on EMC Scheme Dt.22/10/2012 and December, 2012.  GoI Vision: Transform India into a global hub for ESDM to meet domestic and global demand as well.

18

ADVANTAGE HYDERABAD  Administrative, Economic & Financial capital of Andhra Pradesh ~ largest contributor to the State’s GDP  Hub for IT and ITES services, pharmaceuticals and entertainment industries apart from education, research & health infrastructure  International Air Connectivity, Excellent rail & road connectivity (NH7, NH9, NH 202, Outer Ring Road, Radial Roads, PVNR Expressway, upcoming Metro Rail, MMTS, 3 major rail terminals, etc.) 19

AD Excellent V A N T A Connectivity GE VISAKHAPATNAM Road: The section of Golden Quadrilateral (NH5) from Kolkata to Chennai connects Visakhapatnam to the North-East and to the South Port: Visakhapatnam, one of the country's largest ports is the oldest shipyard on the east coast of India Air: Visakhapatnam International Airport is well connected with Domestic and International (Dubai) flights Rail: The railway station at Visakhapatnam is under the control of East Coast Railway of Indian Railways. It stands on the Chennai Central Howrah Station route • Industrial Base: Industrial Development is conspicuous in Visakhapatnam urban agglomeration with the large scale industries like Hindustan Shipyard, Hindustan Petroleum Corporation, Coromandal Fertilizers, Bharat Heavy Plates and Vessels, L.G.Polymers Ltd., Hindustan Zinc Plant and Visakhapatnam Steel Plant and Petroleum Chemical and Petro-Chemical Industrial Region (PCPIR)  Coastline: Immense potential to trigger industrial growth • Manpower, social infrastructure, KG Basin, existing industrialization (Petroleum, Steel, Fertilizers, Power, Mineral based, Agro) provide strong base to proposed EMC at Parawada

PROPOSED EMCs IN ANDHRA PRADESH

GoAP proposes Three Greenfield EMCs:  EMC at Fab City (E-City), Hyderabad – 602 Ac  EMC at Maheshwaram, Hyderabad – 310 Ac  EMC at Parawada, Visakhapatnam – 100 Ac

21

Hyderabad Project Site – E-City A N D H R A

P R A D E S H

E L E C TR O N I C H A R D W A R E M A N U F A C TU R I N G C L U S TE R A T E - C I TY , H Y D E R A B A D , A N D H R A P R A D E S H

E-CITY~SITE LOCATION

23

TO HIMAYAT SAGAR

E-CITY ~ SITE BOUNDARY (SEZ & NON SEZ)

FAB CITY BOUNDARY

EXISTING APPROACH ROAD

263.25 Ac SEZ BOUNDARY

339.11 Ac

NON SEZ BOUNDARY

EMC BOUNDARY

24

E-CITY ~ TARGET SEGMENTS Delineate d Area (Ac) SEZ (263.25)

Target Segments/ Beneficiaries

•Semiconductors •Chip Design •VLSI (National/ International Player as Anchor Tenant) Telecommunications, Strategic electronics, Component industry, Power and Solar segments

Non SEZ (339.11)

Investment Commitments

Commitment for 40 acres (22% of plotted area) by ELIAP member firms

• • • •

Telecom (16 nos.), Power (11 nos.), 63 ELIAP Member Firms Solar (7 nos.), expressed interest in embedded systems, RFID segments, setting up their units Medical electronics, Strategic electronics Commitment for 208 • Support services like Testing, Plastic Acres (92% of plotted Committed Investments: Rs. 1326 Cr. (~ 5 times of Financial Assistance sought under moulding, etc. (7 nos.) area) EMC Scheme)

25

E-CITY~COMMON MANUFACTURING SUPPORT FACILITIES Target Segment

Type of Equipment (Design) EDA Design Suite (Mentor Graphics, Cadence, Synopsis & Multisim)

SEZ (Semiconductors , Chip Design, VLSI, etc.)

High Frequency Circuit Design (ADS & AWR)

Non SEZ (Telecom, Solar, RFID, etc.)

Antenna & Impairment Modelling Suite (FeKo, Antenna Magus, ADI)

First Silicon Design Verification System Semiconductor Design Hardware Lab (Bench top & Automated Design Checks)

Rf & Embedded Software development Suite (C,C++,Java,.NET, MatLab, LabVIEW) Mixed Signal Embedded Electronics Design & Validation Suite (Lab with all Equipment)

Non SEZ

Prototyping • Embedded Design Prototyping Board on Micro controllers, Processors, FPGA & ASIC's. • RF & Telecom Protocol Emulator • Medical Electronic Bench, etc. 26

E-CITY~CONCEPTUAL MASTER PLAN LANDUSE STATEMENT PROCESSING AREA LANDUSE Plotted Development/ Industrial Units Manufacturing Support Units

AREA IN PERCENTAGE AC OF AREA 416.05 13.42

Testing Training Incubation Trade pavilions Support Units - CAD/CAM, Tool Room etc Road Network

64.81

Green and Open Spaces

56.08

Utilities

4.62

TOTAL - PROCESSING AREA

554.98

92.13%

NON PROCESSING AREA LANDUSE WELFARE SERVICES Road Netwok Green and Open Spaces Utilities/Infrastructure

TOTAL - NON PROCESSING TOTAL AREA (PROCESSING & NON PROCESSING)

AREA IN PERCENTAGE AC OF AREA 12.47 7.20 24.03 3.69

47.40

7.87%

602.37

100

27

E-CITY ~ ESTIMATED PROJECT COST & GRANT IN AID S.No.

Description

Estimated Cost (Rs. Cr.)

Processing Area 1. 2. 3.

Basic Development, Essential & Regulatory Services Manufacturing Support Services Other Support Services

300.72 80.00 44.75

Non Processing Area 4. 5.

Welfare Services Other Costs (Contingencies, Admin Expenses) Total Project Cost (Rounded Off to)

110.51 43.68

580.00

Eligible Grant in Aid (GIA) by GoI under EMC scheme works out to be Rs. 263.44 Cr. (as per extent, GIA works out to Rs 301 Cr.) Estimated Investments: Rs.18000 Mn. (~74% is already committed by ELIAP firms) Employment potential : 35,000 (direct) & 2,10,000 (indirect) 28

Hyderabad Project Site Maheswaram A N D H R A

P R A D E S H

E L E C TR O N I C H A R D W A R E M A N U F A C TU R I N G C L U S TE R AT MAHESHWARAM, HYDERABAD, ANDHRA PRADESH

MAHESHWARAM EMC ~ SITE LOCATION

ORR connects major economic & growth centers like Hi-Tech City, Hyderabad International airport, proposed EHMCs etc. 30

MAHESHWARAM EMC ~ CONCEPTUAL MASTER PLAN LANDUSE STATEMENT PROCESSING AREA LANDUSE

AREA IN AC

Plotted Development/ Industrial Units

PERCENTAGE OF AREA

157.26

Manufacturing Support Units

18.60

Testing Training Incubation Trade pavilions Support Units - CAD/CAM, Tool Room etc Road Network

43.81

Green and Open Spaces

51.19

Utilities

11.81

TOTAL - PROCESSING AREA

282.68

91.19%

NON PROCESSING AREA LANDUSE

AREA IN AC

WELFARE SERVICES

8.35

Road Netwok

4.87

Green and Open Spaces Utilities/Infrastructure TOTAL - NON PROCESSING TOTAL AREA (PROCESSING & NON PROCESSING)

PERCENTAGE OF AREA

12.80 1.31 27.32

8.81%

310.00

100

31

MAHESHWARAM ~ ESTIMATED PROJECT COST & GRANT IN AID S.No.

Description

Estimated Cost (Rs. Cr.)

Processing Area 1. 2. 3.

Basic Development, Essential & Regulatory Services Manufacturing Support Services Other Support Services

253.53 16.41 17.23

Non Processing Area 4.

Welfare Services 45.27 Other Costs (Contingencies, DPR Preparation 5. 27.09 Cost) Eligible Grant in Aid (GIA) by GoI under be Total Project Cost (Rounded Off to) EMC scheme works out to 360.00

Rs. 155 Cr. ( as per processing & non-processing area/components criteria, GIA works out to Rs. 170.74 Cr.) Estimated Investments: Rs.5000 Mn. (GoAP is exploring investments from ELCINA, MAIT & ELIAP) Employment potential : 14,000 (direct) & 84,000 (indirect) 32

EMC PARAWADA ~ SITE LOCATION TO KOLKATA

MADHAVADHARA NAD

DUVVADA

R K BEACH

GAJUWAKA

HPCL LTD

LANKALAPALEM

VISAKHAPATNAM PORT

NH-05

PROJECT SITE

TO ANAKAPALLE

KANITI RESERVOIR

JN PHARMA CITY

DESA PATRUNIPALEM

PARAWADA

DOLPHIN NOSE

GANGAVARAM PORT VISAKHAPATNAM STEEL PLANT

SIMHADRI POWER PLANT - NTPC

BAY OF BENGAL

33

EMC PARAWADA - ESTIMATED PROJECT COST S.No.

Description

Estimated Cost (Rs. Cr.)

Processing Area 1. 2. 3.

Basic Development, Essential & Regulatory Services Manufacturing Support Services Other Support Services

79.04 25.00 8.72

Non Processing Area 4.

Welfare Services 21.12 Other Costs (Contingencies, DPR Preparation 5. 10.91 Cost) Total Project Cost (Rounded Off to) EMC scheme works 145.00 Eligible Grant in Aid (GIA) by GoI under out to be

Rs. 50 Cr. (as per processing & non-processing area/components criteria, GIA works out to Rs. 67.85 Cr.) Estimated Investments: Rs.2900 Mn. (GoAP is exploring investments from ELCINA, MAIT & ELIAP) Employment potential : 5,800 (direct) & 35,000 (indirect) 34

Advantage AP The Most Preferred IT/ITES/EHW Destination 

Hyderabad is listed as one of the 41 “Must Visit” cities in the world. Hyderabad is the only city from India, FEATURED IN THIS RANKING SHOWN AT 19TH PLACE. - The New York Times – January 2011



Andhra Pradesh highlighted as No.2destination in India, where Govt permissions, clearances Licences are provided in the quickest time frame - The World Bank Report “Doing Business in India 2009”



Microsoft looks at Hyderabad as one of the most important centers internationally. - Bill Gates, Microsoft



"Andhra Pradesh has become one of the leading global IT centers because of the talent of its business leaders, its workforce, and the strong support of its government leadership.“



- Harris Miller – President IT Association of America

THANK YOU Please do get in touch with us Sanjay Jaju, IAS Secretary to Government Information Technology & Communications Dept. Govt. of Andhra Pradesh, Hyderabad, E-mail: [email protected]