Trade and Commerce | APPSC State Specific Preparation Course - APPSC (Andhra Pradesh) PDF Download

Trade and Commerce in Andhra Pradesh

• The state of Andhra Pradesh was recently divided into Telangana and residuary Andhra Pradesh (Seemandhra) by the Andhra Pradesh Reorganization Act, 2014.
• Before the division, Andhra Pradesh was among the faster-growing states in India.
• Between 2004-05 and 2015-16, the Gross State Domestic Product (GSDP) grew at an average rate of 10.67% annually to reach US$ 92.2 billion.
• The Net State Domestic Product (NSDP) also grew significantly at a rate of 10.64% annually to reach US$ 82.86 billion.
• Andhra Pradesh boasts well-developed social, physical, and technological infrastructure along with a robust power, airport, IT, and port network.
• As of 2015-16, the state's Gross State Domestic Product was estimated at US$ 92.17 billion.
• Foreign Direct Investment (FDI) inflows into Andhra Pradesh amounted to US$ 11.57 billion between April 2000 and March 2016.
• The Government of Andhra Pradesh allocated a budget of US$ 20.72 billion for FY 2016-17.
• Significant focus in the expenditure budget was placed on education, irrigation, health, and the energy sector.
• For the 2016-17 state budget, the government announced an investment of US$ 486.44 million for the development of roads and buildings in the state.

Andhra Pradesh's Special Economic Zones (SEZs)

• By July 2016, Andhra Pradesh had 19 operational SEZs spread across diverse sectors like textiles, food processing, footwear, leather products, multi-product, pharmaceuticals, IT SEZs, and more.

Power Generation in Seemandhra

• Seemandhra, comprising Rayalaseema and coastal Andhra, hosts a majority of the power projects of the erstwhile Andhra Pradesh state.
• The state is home to coal-based power plants primarily due to their proximity to ports.
• As of April 2016, Andhra Pradesh possessed a total installed power generation capacity of approximately 15,311.17 MW.

Industrial Single Window Clearance

• Andhra Pradesh was the first state in India to introduce the Industrial Single Window Clearance system.
• The legislation mandated new businesses to register with the single-window for expedited clearances and streamlined the process for obtaining industrial approvals.

Diversified Development Initiatives

• The state maintains separate policies for the growth of sectors such as solar power, electronic hardware, and food processing.

Tourism and Marine Exports

• Andhra Pradesh boasts a vast coastline of approximately 974 km, renowned temple destinations, lush green forests, and spicy cuisine, resulting in a surge in domestic tourism in recent years.
• The state is a major producer of saline water shrimps and freshwater prawns, contributing over 20% to the nation's total marine exports.

Key Agricultural Sectors

• Andhra Pradesh's rich climatic and soil conditions make it a significant agricultural hub, cultivating crops like rice, sorghum, oilseeds, cotton, pulses, and gram.

Andhra Pradesh Economic 

• Pharmaceutical Industry: Andhra Pradesh hosts several global and national pharmaceutical companies with manufacturing hubs in different cities. The state had a total of four Pharmaceutical Special Economic Zones (SEZs) as of July 2016.
• Information Technology and IoT: The Information Technology, Electronics, and Communication (ITE&C) sector in Andhra Pradesh has introduced a new Internet of Things (IoT) policy aiming to capture a significant market share in India's IoT industry by 2020.
• Agricultural Production: Andhra Pradesh produces mid-range and superior long-staple varieties of cotton. In the year 2016-17, the state produced 858 metric tons of raw silk.
• Exports: Andhra Pradesh is a major contributor to marine exports, accounting for 45% of total marine exports. It also ranks second in pharmaceutical exports, contributing 30% to India's total pharmaceutical exports. The state attracts approximately 4.01% of India's Foreign Direct Investment (FDI) inflows.
• Industrial Development: Andhra Pradesh has been at the forefront of developing sector-specific policies. Establishing industrial clusters and infrastructure such as biotech parks, textile parks, and hardware parks are key strategies to attract investments across various industries.
• Investment Opportunities: The state offers abundant natural resources, policy incentives, and infrastructure conducive to investments in sectors like pharmaceuticals, biotechnology, IT and IT-enabled services (ITeS), mining, minerals, textiles, leather, and tourism.

Investment Promotion in Andhra Pradesh

• Seemandhra, consisting of Rayalaseema and coastal Andhra, hosts a significant portion of the power projects of former Andhra Pradesh.
• Coal-based power plants are predominantly located in the state due to proximity to ports.
• The Visakhapatnam port is ranked among the top five out of 13 major ports in the country.

Initiatives to Promote Investments

• Pharma Sector Opportunities: Availability of ports, Pharma City, international airport, extensive land parcels, and effective waste treatment facilities offer ample opportunities for pharmaceutical companies.
• Culture and Tourism Development: The government has allocated US$ 34.79 million for promoting culture and tourism in the state.
• Support for Leather Industry: Financial assistance is provided by the government in the form of investment grants amounting to 30.0% of the plant and machinery cost for Small Scale Industries (SSI) and 20.0% for other units, with a maximum limit of US$ 120,000 for technology upgrades or expansions.
• Metro Rail Projects: The Union Government has planned metro rail projects in Visakhapatnam, Guntur, and Vijayawada.
• Role of Industries and Commerce Department: The Department of Industries and Commerce is primarily responsible for overall industrial development, especially for small-scale industries. It designs and implements various schemes for industrial growth in the state.

Key Functions of the Industries and Commerce Department

• Assisting and guiding entrepreneurs in establishing industrial units: One of the core roles involves providing support and advice to individuals looking to set up new industrial ventures.
• Facilitating entrepreneurs in obtaining various industrial approvals and clearances: The department helps business owners in securing necessary permits and authorizations from different government bodies through a single point of contact.
• Registration of small industries, cottage industries, and small-scale enterprises: The department oversees the registration process for small businesses and enterprises, fostering their development.
• Offering incentives to eligible industrial units: Incentives are provided to industrial units that meet the criteria, encouraging growth and sustainability.
• Creating a conducive business environment for industrial growth: The focus is on establishing a transparent and business-friendly atmosphere to expedite the growth of the industrial sector within the state.
• Providing marketing support to local industrial units: Assistance in marketing strategies and initiatives is extended to support local industrial businesses.
• Reviving struggling small industrial units: Efforts are made to revitalize and support small industrial units facing challenges or difficulties.