Andhra Pradesh Electronics Manufacturing Policy 4.0 (2024-29)
Up to 30%+10%
Capital Subsidy on EFCI (Mega, with Top-Ups)
75% of EFCI
Overall Cap on Combined Incentives
₹1/Unit
Fixed Power Cost Reimbursement for 5 Years
100%
Net SGST Reimbursement for 5 Years from DCP
Why the policy exists
Capital subsidy of 20%–30% of Eligible Fixed Capital Investment for electronics manufacturing units, with employment and value-addition top-ups, ₹1/unit power cost reimbursement, 100% net SGST reimbursement for 5 years, 100% stamp duty reimbursement, recruitment assistance, and tailor-made packages for Mega and Ultra Mega projects — aligned with the AP Industrial Development Policy (4.0) 2024-29
The Andhra Pradesh Electronics Manufacturing Policy 4.0 (2024-29) is notified in alignment with the AP Industrial Development Policy (4.0) 2024-29, to establish the State as the premier destination for the electronics industry — by providing world-class infrastructure and a conducive policy environment, fostering innovation and emerging technologies, bringing the entire electronics value chain to the State, and creating large-scale employment opportunities. AP already hosts dedicated electronics manufacturing clusters in Visakhapatnam, Tirupati, Nellore, Sricity, Kadapa and Anantapur, and is the only Indian state with three National Industrial Corridors.
Quantified Targets (Policy Period)
| Parameter | Target |
|---|---|
| Electronics production / Sector GVA | USD 50 Billion (₹4.2 Lakh Crore) by end of policy period |
| Investment attraction | USD 10 Billion (₹84,000 Crore) during the policy period |
| First-time employment creation | 5 Lakh persons from the electronics manufacturing sector |
Guiding Principles
- •Globally attractive manufacturing destination for enterprises diversifying production bases.
- •Product-perfect value creation — support for globally recognised quality certifications.
- •Attracting FDI, including Fortune 500 electronics manufacturers, through country-specific desks.
- •Employment creation leveraging 250+ engineering colleges, 500+ ITIs and 250+ polytechnics.
- •Green energy transition — 40 GW renewable energy target by 2030.
- •AI, IoT and Industry 4.0 adoption in manufacturing.
- •Inland water transport (interlinking of rivers) and port-based value addition — 3 ports with 18m+ drafts, 15% of India's port handling capacity.
- •Dovetailing with Government of India schemes (Make in India, PLI, India Semiconductor Mission).
- •End-to-end domestic value creation and GI tagging of local produce.
Motto: “Reduce cost of production and improve speed of business for enterprises.”
Notified vide G.O.Ms.No.5, ITE&C (Promotion Wing) Department, dated 30.10.2024 | Nodal Department: IT, E&C Department, Government of Andhra Pradesh | Valid for 5 years from policy notification, or till a new Policy is announced, whichever is later
Who qualifies, and in which band
Applicability
- •New and existing enterprises investing in and establishing new units.
- •Existing enterprises investing in expansion.
- •Applicable to all territories within the geographical boundaries of the State of Andhra Pradesh.
Investment Bands & Standard Investment Periods
| # | Category | Fixed Capital Investment Range | Committed Standard Investment Period |
|---|---|---|---|
| 1 | Sub Large Projects | Above ₹50 Crore – up to ₹200 Crore | 3 years |
| 2 | Large Projects | Above ₹200 Crore – up to ₹1,000 Crore | 3 years |
| 3 | Mega Projects | Above ₹1,000 Crore – up to ₹5,000 Crore | 4 years |
| 4 | Ultra Mega Projects | Above ₹5,000 Crore | 4 years |
On the remarks of the Finance Department, the overall incentive a company can claim — through the combination of incentive packages under this policy or any subsequent policies — shall not exceed 75% of the Eligible Fixed Capital Investment (EFCI) in the State. The Government is working towards an ESCROW account-based disbursement mechanism for timely payout.
Projects with FCI of ₹50 Crore or below are not covered under the investment bands of this sectoral policy — such units would ordinarily route through the State's MSME/industrial policy framework. Definitions of EFCI, DCP (Date of Commercial Production) and value-addition criteria will be detailed in the operational guidelines, which are to be notified separately.
Incentive quantum — exact figures
A. Capital / Investment Subsidy (on EFCI)
| Category | Capital Subsidy | Disbursement | E/I Ratio Top-Up (+5%) | Value-Addition Top-Up |
|---|---|---|---|---|
| Sub Large (₹50–200 Cr) | 20% of EFCI | 5 equal annual instalments from DCP | If Employment/Investment ratio > 10 | +5% of EFCI |
| Large (₹200–1,000 Cr) | 25% of EFCI | 7 equal annual instalments from DCP | If Employment/Investment ratio > 3 | +5% of EFCI |
| Mega (₹1,000–5,000 Cr) | 30% of EFCI | 10 equal annual instalments from DCP | If Employment/Investment ratio > 2 | +5% of EFCI |
| Ultra Mega (> ₹5,000 Cr) | Tailor-made benefits on a case-to-case basis — considering gestation period, pioneering nature, location, technology, importance to the State's industrial growth, and employment/revenue generation potential | Tailor-made benefits on a case-to-case basis — considering gestation period, pioneering nature, location, technology, importance to the State's industrial growth, and employment/revenue generation potential | Tailor-made benefits on a case-to-case basis — considering gestation period, pioneering nature, location, technology, importance to the State's industrial growth, and employment/revenue generation potential | Tailor-made benefits on a case-to-case basis — considering gestation period, pioneering nature, location, technology, importance to the State's industrial growth, and employment/revenue generation potential |
The E/I ratio top-up is in addition to the base investment subsidy. The value-addition top-up criteria will be detailed in the operational guidelines. Mega projects are additionally eligible for tailor-made benefits over and above the standard package.
B. Power Cost Reimbursement
| Benefit | Period | Applies To |
|---|---|---|
| Fixed power cost reimbursement of ₹1 per unit | 5 years from date of commencement of commercial production | Sub Large, Large and Mega projects |
C. Net SGST Reimbursement
| Benefit | Period | Applies To |
|---|---|---|
| 100% net SGST payable on sale of final products manufactured, sold and registered in the State | 5 years from date of commercial production | Sub Large, Large and Mega projects |
D. Stamp Duty Reimbursement
- •100% stamp duty and transfer duty on purchase of land meant for industrial use.
- •100% stamp duty on lease of land/shed/buildings, mortgages and hypothecations.
- •Reimbursed only once on the land — not on subsequent transactions on the same land.
E. Recruitment Assistance (First-Time Recruits)
| Employee | Assistance | Duration | Disbursement |
|---|---|---|---|
| Male employee | ₹4,000 per employee per month | 6 months | After one year of operations |
| Female employee | ₹6,000 per employee per month | 6 months | After one year of operations |
The higher assistance for women employees makes workforce composition a genuine planning variable — for assembly-line-heavy electronics units, front-loading female recruitment materially improves the claim value.
Value chain coverage
| # | Targeted Subsectors |
|---|---|
| 1 | Semiconductor Fab, Display Fab |
| 2 | ATMP (Assembly, Testing, Marking & Packaging), OSAT, Printed Circuit Boards (PCB) |
| 3 | Compound Semiconductors / Silicon Photonics (SiPh) / Sensors / Discrete Semiconductors Fab for High Frequency / High Power / Optoelectronics devices; semiconductor packaging |
| 4 | Passive & Active Components, Li-ion & Advanced Chemistry Cell (ACC) Batteries, Chargers and other power electronics, and other eligible components as prescribed from time to time |
| 5 | Automotive Electronics, Mobile & Mobile Sub-assemblies & Accessories, Consumer Electronics, IT Hardware & Peripherals, Telecom & Networking Devices, LED |
| 6 | IoT devices and variants (Medical IoT, Industrial IoT, Defense IoT, Social IoT), short/medium/long-range communication technologies, wired communication technologies, and systems manufacturing for IPv6 adoption |
| 7 | e-Waste Processing |
The Government will run a robust investment promotion strategy across the full value chain — from fabs to e-waste processing — to build a holistic ecosystem rather than assembly-only capacity.
Bringing down the cost of production
Land & Clusters
- •Land consolidation in nodes along the State's three National Industrial Corridors — VCIC (Visakhapatnam–Chennai), CBIC (Chennai–Bengaluru) and HBIC (Hyderabad–Bengaluru).
- •29 new clusters covering 1.32 lakh acres being added to the existing 20 clusters.
- •Four existing Electronics Manufacturing Clusters (EMCs) to be deeply integrated into the corridor network, with road, water and power provided to the cluster doorstep.
Logistics
- •Raw Material Hubs — sector-specific giga-size fulfilment centres by large shipping/logistics operators, holding imported/domestic raw material inventory available on demand.
- •National Waterway 4 (NW-4) development along the Coromandel coast (Kakinada, Eluru, Buckingham canal) for inland water transport.
- •Two approved Dedicated Freight Corridors — North-South DFC (Vijayawada–Itarsi) and East Coast DFC (Vijayawada–Kharagpur), with road links to seaports prioritised.
Tariffs & Labour
- •Rationalisation of power tariffs, water tariffs, building layout charges and other charges to stable equilibrium structures.
- •Skill Census in collaboration with industry associations to map workforce skills against industry needs.
- •Industry adoption of ITIs on PPP model for industry-specific skilling.
- •Industrial housing — earmarked land parcels for dormitories near electronic clusters, offered to industries on rental basis; state support for industry-built worker housing.
Clearances, facilitation and regulatory re-engineering
- •Single Window Mechanism 2.0 — the Single Desk Portal (launched June 2015) delivers 93+ regulatory clearances across 19 departments within 21 days, covering pre-establishment, pre-operation approvals and renewals, with online payment and status tracking.
- •Dedicated Investment Facilitation Cell — each investor is assigned a Liaison Officer for follow-up with line departments and pendency tracking.
- •Assistance to foreign investors — country-specific desks providing bespoke facilitation, local information/expertise, and a business-opportunity portal.
- •Integrated Data Management System — demand/market/infrastructure/value-chain information on demand, district-level industrial output tracking, integration with PM Gati Shakti, and an industry feedback forum with SLA-based enforcement.
Re-engineered Approval Categories
| Category | Mechanism |
|---|---|
| Category 1 | Approval granted on self-certification, upon fee payment and application submission |
| Category 2 | In-principle approval on self-certification; final approval post-inspection |
| Category 3 | Deemed approval if post-inspection approval is not received within the defined SLA |
All re-engineering is to be implemented without compromising industrial safety requirements.
Focused support for the MSME base
- •A dedicated MSME and Entrepreneur Development Policy to be introduced for focused sectoral support.
- •175+ MSME parks to be developed — at least one park per constituency — under the AP Policy for the establishment of Private Industrial Parks with 'Plug and Play' Industrial Infrastructure (4.0) 2024-29.
- •Dedicated corpus of ₹500 Crore during the policy period towards CGTMSE, technology transfer, revival of sick units, R&D, etc.
- •8-dimensional competitiveness approach: MSME facilitation, incubation/mentoring, unit-level competitiveness, access to finance, sustainability & circularity, import substitution/export promotion, cluster infrastructure development, and special assistance for inclusion.
Motto: “One Family One Entrepreneur by 2030.” As of February 2024, AP has around 7.41 lakh registered MSME units employing about 61.98 lakh people (as of July 2024).
The MSME incentive quantum itself is not specified in this sectoral policy — it flows from the forthcoming dedicated MSME & Entrepreneur Development Policy and the Private Industrial Parks Policy (4.0) 2024-29. Track those notifications separately before advising sub-₹50 Crore electronics units.
Key dates and durations
| When | What |
|---|---|
| 30/10/2024 | Policy notified vide G.O.Ms.No.5, ITE&C (Promotion Wing) Department, Government of Andhra Pradesh, superseding the framework under G.O. Ms. No. 5 dated 17.05.2021 and G.O. Ms. No. 3 dated 15.03.2024. |
| 5 years | Policy validity from the date of notification, or till a new Policy is announced, whichever is later. Amendments apply prospectively and cannot curtail benefits already granted. |
| 3 years | Committed standard investment period for Sub Large and Large projects. |
| 4 years | Committed standard investment period for Mega and Ultra Mega projects. |
| 5–10 annual instalments | Capital subsidy disbursement schedule from DCP — 5 instalments (Sub Large), 7 (Large), 10 (Mega). |
| To be notified | Operational guidelines — detailing definitions, value-addition criteria and procedures for availing incentives — to be issued separately by the IT, E&C Department. |
Incentives will be extended to eligible industries only as per the operational guidelines to be notified separately. Application procedure, claim formats and documentary requirements are therefore Indicative until those guidelines are published — verify with the IT, E&C Department / Single Desk Portal before committing claim timelines to a client.