Complete Investor Guide to AP Industrial Policy APIIC Parks Authority Incentives & 8 High-Return Projects (Rs.10 Crore Onwards)
Profitable Industries to Start in Andhra Pradesh
The state of Andhra Pradesh bears its share of the good fortune in being one of the most blessed coastal states in India, with 974 km of coastline, three deep-water ports, the world largest chilli trading hub at Guntur, India largest shrimp-exporting belt and one of the country most established pharmaceutical clusters at Visakhapatnam. But for the past decade, the state has been “rebuilding from bifurcation. This rebuilding has now been completed.
The industrial policy of the AP governments includes capital subsidy of 20-35%, SGST reimbursement, POWER COST reimbursement and a dedicated policy for Green Hydrogen. APIIC is responsible for the management of 50+ industrial parks. The Visakhapatnam-Chennai Industrial Corridor (VCIC) is one of the four India Industrial Corridors. This article highlights the 8 highest yielding industrial projects that can be invested in by the investors with a fixed investment of Rs.10 crore and above.
Andhra Pradesh Economy – Rebuilding Stronger Than Before
AP GSDP hit Rs.13 trillion, increasing at an annual rate of 11 %+. Shrimp exports in the state are the highest in the country at Rs.15,000+ crore per year. Produces 40% of the chillies in India. At the largest pharma park in India at Jawaharlal Nehru Pharma City (JNPC) in Vishakhapatnam, there are 200+ pharma companies. Krishnapatnam Port is one of the fastest growing container ports in India. The VCIC when fully developed will create 1 million+ jobs along the 800 km coastal spine.
Policy Architecture – AP Industrial Development Policy
AP Industrial Development Policy offers capital subsidy up to 35% on capital investment, stamp duty exemption, employment generation subsidy of Rs.1,000 per month, power cost reimbursement of Rs.1-2 per unit for 5-7 years and SGST reimbursement for 5-7 years, in addition, there are sector-specific bonuses for aquaculture, pharma and renewable energy. Clearances are processed in clearly defined timelines in APIICs single-window portal. The AP Green Hydrogen Policy stakes the state as the second largest green hydrogen hub in India, after Rajasthan.
Infrastructure – Ports, Power and the VCIC Corridor
The three major ports of AP namely, India’s oldest major port (Visakhapatnam), Krishnapatnam and Gangavaram together process 120+ MT per year. The VCIC stretches 800 km along the coasts and has industrial nodes. The East Coast Economic Corridor (ECEC) is the route through which AP ports are connected with Bangladesh, Myanmar and the Strait of Malacca – the busiest shipping route in the world. AP has installed renewable energy capacity of more than 20 GW, among which solar parks in Anantapur and wind farms in Kurnool are some of the lowest cost industrial power generators in India.
Sector Strengths – Coastal, Agricultural and Pharmaceutical
The state does not have a combination of aquaculture dominance, chilli production monopoly, depth of port logistics and the scale of a pharma cluster in the same geography. India shrimp is produced by 70%+ in Krishna, West Godavari and East Godavari. The largest chilli market in the world is Gunturs. There are 200+ Pharma Companies manufacturing the bulk drugs for international markets in JNPC, Visakhapatnam. Anantapur & Kurnool have high AP Solar Irradiance, which is conducive to investments in green energy.
High-Return Industrial Projects – Rs.10 Crore and Above
The following projects are based on the real resource profile, policy incentives and market demand of Andhra Pradesh. Have a formal feasibility study done by NPCS and involve the state nodal agency before committing capital.
Project 1: Integrated Shrimp and Seafood Processing Plant
The estimated investment is Rs.15-Crore to Rs.50 Crore in Nellore and Krishna and West Godavari.
AP is not only India’s leading shrimp exporter but also most shrimp is exported as commodity IQF block frozen product. Butterflied, peeled and deveined and breaded shrimp have 40-80% price premiums. A HACCP certified plant, that is EU/US registered and has integrated cold chain from farm to reefer container is a high return opportunity. MPEDA offers capital subsidy and market development assistance to the seafood export infrastructure.
Project 2: Chilli Oleoresin and Capsaicin Extraction Unit
Estimated Investment: Rs.12-Rs.35 Crore | Guntur, Warangal, Khammam
Guntur is the largest trading centre for chilli in the world. Chilli oleoresin is priced at Rs. 2,000-Rs.4,000/kg whereas dried chilli is priced at Rs.100-Rs.200/kg. Technically accessible, this is a high margin opportunity for a CO2, solvent extraction unit where the product is food-grade chilli oleoresin, capsaicin, paprika oleoresin to be exported to EU and US food manufacturers. Gunturs raw material base provides the world lowest chilli input costs.
→ https://apeda.gov.in/apedawebsite/
Get Detailed Project Report (DPR): Chilli Oleoresin Manufacturing Guide
Project 3: Pharmaceutical API Manufacturing (JNPC Vizag)
Estimated Investment: Rs.25-Rs.80 Crore | Visakhapatnam JNPC, Kakinada
It is India’s biggest pharma park with 200+ companies at JNPC, Visakhapatnam. Domestic production of 53 molecules that India was importing from China will be encouraged under the central PLI scheme for critical APIs. Shared utilities (ETP, CETP, power plant) and existing talent pool, and AP capital subsidy make one of the most cost-effective API manufacturing setup in India for API synthesis unit in JNPC.
Read the Complete Book Here: Handbook on Active Pharmaceutical Ingredients (API), Drugs & Pharmaceutical Products
Project 4: Green Hydrogen Production Facility
Estimated Investment: Rs.50-Rs.200 Crore | Visakhapatnam, Krishnapatnam, Kakinada
It is India’s most promising site for green hydrogen production and export as a result of its A.P combination of low-cost solar/wind power and deep-water port access. The AP Green Hydrogen Policy offers export-oriented projects support in the areas of land, power connectivity and investment facilitation. Shell India, ReNew Power and Greenko has signed MoUs with AP to develop green hydrogen. Four key advantages of this green hydrogen plant, along with a liquefaction and export terminal located next to the port, place an investor at the “ground floor of a global market worth Rs.8 lakh crore by 2030”.
→ https://mnre.gov.in/national-green-hydrogen-mission/
Related Article: Green Hydrogen Plant Setup in India: Technology, Cost & Policy
Project 5: Granite and Natural Stone Processing Unit
Estimated Investment: Rs.15-Rs.40 Crore | Kurnool, Cuddapah, Anantapur
AP is a great source of various stones that are sought after around the world – Cuddapah Black Limestone, Kurnool Limestone and Anantapur granite. The majority of stone is left as raw blocks to be processed in the countries of China and Italy. CNC stone processing plant exporting precision stone for architectural applications in the construction industry in the Gulf can make export returns 3-4 times more than raw block prices. Access is given to shipping from AP port at Krishnapatnam and Gangavaram to Dubai, Doha and Muscat.
Access Complete Business Plan: Granite & Marble Polishing Batti (Bar) Manufacturing: Complete Project Report & Business Guide
Project 6: Aquafeed and Fish Meal Manufacturing Plant
Estimated Investment: Rs.15-Rs.35 Crore | Nellore, Prakasam, West Godavari
The captive demand for aquafeed in India with production of 70%+ shrimp by massive aquaculture sector is estimated at 1.5 million tonnes per year. Currently, the majority of feed is being imported from Thailand and Vietnam. Locally available fish meal, soybean meal, wheat bran can be used in a domestic high-protein pellet feed manufacturing unit which can be directly procured by AP 400,000+ aquaculture farmers and these can be manufactured at 20-30% lower price compared to imported alternatives, and agri-processing units can be established with capital support from NABARD.
View Full Project Details: Fish Meal Manufacturing Plant – Detailed Project Report & Business Plan
Project 7: Solar Module and Component Manufacturing
Estimated Investment: Rs.25-Rs.100 Crore | Anantapur, Kurnool, Kadapa
Solar irradiance is one of the highest in the world in Anantapur district and already there is the largest solar park in India (Kurnool Ultra Mega Solar Park, 1,000 MW). The government offers central incentives of 4-6% on net incremental sales under PLI scheme for solar modules. A Solar Module manufacturing plant in AP renewable energy corridor serves the large-scale renewable energy projects in AP, directly, without interstate freight and enjoy AP lowest industrial power tariffs.
Explore This Book: Solar PV Power and Solar Products Handbook
Project 8: Port-Based Cold Chain Logistics Hub
Estimated Investment: Rs.25-Rs.75 Crore | Visakhapatnam, Krishnapatnam, Kakinada
Combined shipment capacity of AP three ports is 120+ MT per year and is growing at a fast rate by VCIC investment. Cold chain warehousing and multi-temperature facilities, used to store seafood and pharmaceuticals, and container freight stations (CFS), are in serious short supply for the volume of cargo handled. A modern multimodal logistics park in proximity to Krishnapatnam Port can provide lease income for 5-7 years on warehousing along with logistics service income.
AP Coastal Corridor – The ASEAN Trade Gateway
AP East Coast Economic Corridor links its ports with Myanmar, Bangladesh and Strait of Malacca. Visakhapatnam by sea is nearer to Singapore than Mumbai is. The VCIC once completed will be the most dynamic manufacturing belt on the coast of India. AP port access gives manufacturers a 2-3 day shipping lead over west-coast rivals, especially those who are targeting the ASEAN export market – the fastest-growing trade bloc in the Asia region.
Explore proven business ideas with high success potential
How NPCS Supports Your Andhra Pradesh Startup
NPCS offers detailed shrimp processing, chilli oleoresin, pharma APIs, aquafeed, solar manufacturing and port logistics project reports, which have been calibrated as per the AP raw material economics and incentive structure APIIC. They have bankable DPRs which are accepted by banks for PMEGP, MUDRA and NABARD applications and have been designed keeping in view the documentation requirement of APIICs in a single window.
What Smart Investors Are Doing Right Now
Aurobindo Pharma, Divis Laboratories, Hetero Drugs and other international seafood companies have already come to AP industrial zones attracted by the VCIC. High conversion rate from MoU to operational unit – as a result of active monitoring by APIICs – indicates real administrative capacity. AP seafood exports, as per APEDA data, are up 18% YoY, confirming the seafood supply chain investment thesis.As per APEDA data, seafood exports from AP are on the rise by 18% YoY, thus supporting the seafood supply chain investment thesis.
Conclusion
In Andhra Pradesh, the infrastructure is ahead of the investors. They’re in place, they’ve been built, the electricity is on, the raw materials are mined and, in the sea, and the incentives are ample. The projects listed above are all eight of the points of entry to one of India most supply-rich, logistics-advantaged industrial areas. Go first and capture the early mover’s advantage.
Authority Reference Links & Further Reading
- APIIC – Andhra Pradesh Industrial Infrastructure Corporation: https://apiic.in/
- Invest India – Andhra Pradesh: https://www.investindia.gov.in/state/andhra-pradesh
- IBEF – Andhra Pradesh: https://www.ibef.org/states/andhra-pradesh
- APEDA – Agricultural & Processed Food Export: https://apeda.gov.in/apedawebsite/
- PHARMEXCIL – Pharmaceuticals Export Promotion Council: https://www.pharmexcil.com/
- National Green Hydrogen Mission – MNRE GOI: https://mnre.gov.in/national-green-hydrogen-mission/
- Ministry of New & Renewable Energy – GOI: https://mnre.gov.in/
- Indian Bureau of Mines – GOI: https://ibm.gov.in/
- CII – Confederation of Indian Industry: https://www.cii.in/
- FICCI – Federation of Indian Chambers of Commerce: https://ficci.in/
- NABARD – Agricultural Finance: https://www.nabard.org/
- SIDBI – Small Industries Development Bank: https://www.sidbi.in/
- Ministry of Commerce & Industry – GOI: https://commerce.gov.in/
- MSME Ministry – GOI: https://msme.gov.in/
- Startup India – DPIIT: https://www.startupindia.gov.in/
- Ministry of Food Processing Industries – GOI: https://mofpi.gov.in/
