Andhra Pradesh Industrial Development Policy (4.0) 2024-29
30–40%
Of FCI — Early Bird Investment Subsidy
15%
Max Standard Capital Subsidy (Mega / Ultra Mega)
100% SGST
Net SGST Reimbursed for 5 Years from DCP
100% FCI
Overall Cap on Combined Incentives
Why the policy exists
A five-year industrial policy offering investment subsidy up to 15% of FCI (30–40% under the Early Bird Project Scheme), first-ever Top-up on PLI, Employment and De-carbonization subsidies, 100% net SGST reimbursement for 5 years, and stamp duty/land conversion reimbursements — across four investment bands from ₹51 crore FCI upward
The AP Industrial Development Policy (4.0) 2024-29, notified vide G.O.Ms.No.68 dated 26.10.2024, substitutes IDP 2023-27 and introduces — for the first time in the State, as noted by the Finance Department — capital subsidy on investments plus a Top-up Subsidy on PLI, an Employment Subsidy and a De-carbonization Subsidy. The motto: reduce cost of production and improve speed of business for enterprises.
Vision: Transform Andhra Pradesh into an internationally competitive industrial hub, seamlessly integrated into global value chains and renowned for achieving product perfection across sectors.
- •Globally attractive manufacturing hub — without compromising climate goals.
- •Product-perfect value creation; support for globally recognized quality certifications.
- •Attract FDI in emerging sectors; targeted engagement with Fortune 500 companies.
- •Employment creation, capitalizing on the demographic dividend.
- •Green energy transition (40 GW renewables by 2030) and circular economy (Recycle-Reuse-Reduce).
- •AI, IoT and Industry 4.0 adoption; inland water transport; port-based value addition.
- •Dovetailing with GoI schemes; end-to-end domestic value creation with GI tagging of local produce.
Quantified targets for the policy period
| Parameter | Target |
|---|---|
| Manufacturing GVA | INR 3.4 Lakh Cr (FY24 AE) → INR 7.3 Lakh Cr |
| Investments | INR 30 Lakh Cr attracted; ~15% (INR 5 Lakh Cr) operationalized |
| FDI | Minimum USD 10 Billion (INR 83,000 Cr) |
| Employment | 5 Lakh first-time manufacturing jobs |
| Industrial Parks | 175+ developed during the policy period |
| Exports | 15% y-o-y growth; USD 20 Bn (FY24) → USD 40 Bn |
Notified vide G.O.Ms.No.68, dated 26/10/2024 | Nodal set-up: SIPB (Chairman: Hon'ble Chief Minister) & SIPC (Chairman: Chief Secretary), Convener: Commissioner of Industries | Valid for 5 years from notification
What qualifies, and under whose decision
Key Definitions — Investment Bands
| Band | Fixed Capital Investment (FCI) Range | Standard Investment Period (from CFE) |
|---|---|---|
| Sub Large Projects | INR 51 to 500 Crores | 2 years |
| Large Projects | INR 501 to 1,000 Crores | 3 years |
| Mega Projects | INR 1,001 to 5,000 Crores | 3 years |
| Ultra Mega Projects | INR 5,001 Crores and above | 4 years |
Categories Covered
| Category | Covers |
|---|---|
| New projects | New and existing enterprises investing in and establishing new units anywhere in the State |
| Expansion projects | Existing enterprises investing in expansion of units |
| Focus sectors — Sustenance (10) | Automobile; Chemicals & Petrochemicals; Engineering; Food Processing; Pharma & Life Sciences; Medical Devices; Textiles, Apparels & Footwear; Blue Economy; Metals & Alloys; Furniture |
| Focus sectors — Propelling (10) | Aerospace, Defence & Drones; EVs & Battery; Biotechnology; Toys; Green & Renewable Energy; Ports & Logistics; Semiconductors & Electronics; Ship Building; Specialty Steel; MRO |
| Cross-cutting sectors | Industrial Parks · Logistics · MSME · IT & ITES · Hospitality & Tourism · Energy |
To be eligible for incentives, the enterprise must obtain Consent for Operation (CFO) and commence commercial production during the operative period of the Policy, unless exempted through a G.O. Units already availing benefits under IDP 2023-27 continue those benefits till the end of that policy's operative period.
Subsidy quantum — exact figures
A. Investment Subsidy — Base, by Band
| Band | Subsidy | Criteria | Disbursement |
|---|---|---|---|
| Sub Large | 12% of FCI | DCP within 2-year standard period; reduced 0.5% per month of delay | 5 equal annual instalments from DCP |
| Large | Max 12% of FCI — 6% at 50% + 6% at 100% of committed plant capacity | Capacity installation as committed; 0.5%/month delay reduction | 7 equal annual instalments from DCP |
| Mega & Ultra Mega | Max 15% of FCI — 5% each at 50% / 75% / 100% of committed plant capacity | Capacity installation as committed; 0.5%/month delay reduction; new & expansion projects | 10 equal annual instalments from DCP |
Additional 5% of FCI (Sub Large) for enterprises wholly owned by women/BC/SC/ST/specially-abled investors domiciled in AP. Mega & Ultra Mega projects may additionally receive tailor-made benefits on a case-to-case basis considering gestation, pioneering nature, location, technology, and employment/revenue significance.
B. Special Package — Early Bird Project Scheme
| Category | Subsidy | Criteria |
|---|---|---|
| Category I | 30% of FCI | First 200 eligible projects receiving CFE within 18 months of policy notification |
| Category II | 40% of FCI | Investments in sectors/sub-sectors identified under any GoI PLI scheme; CFE window relaxed to 24 months from notification |
If a project qualifies under Category II, it is not eligible under Category I. The Early Bird subsidy overrides the base investment subsidy of the respective band. DCP must be achieved within the band's standard investment period from the date of policy notification. Mega & Ultra Mega Early Bird projects get a negotiated tailored package; disbursement follows the respective band's tenure.
C. Top-up on PLI / GoI Schemes (all bands)
| Subsidy | Criteria |
|---|---|
| 10% of the total incentive amount sanctioned under the GoI scheme, capped at 5% of FCI made in AP; 5 equal annual instalments from DCP | Only for projects with GoI approval under PLI (or other GoI scheme notified by the State); eligible only to the extent of investment committed to GoI and proportionate FCI made in AP |
D. Employment Creation Subsidy (all bands)
| Direct Employment to Investment (E/I) ratio | Eligible incentive |
|---|---|
| 5 and above | 10% of FCI |
| 3 to below 5 | 9% of FCI |
| 1 to below 3 | 8% of FCI |
| Less than 1 | NIL |
Direct employment includes full-time and contract employees on the company's payroll. Disbursed in equal annual instalments — 5 years (Sub Large), 7 years (Large), 9 years (Mega), 10 years (Ultra Mega) from DCP — subject to cumulative on-payroll employment evidenced by new EPF accounts created by the employer.
E. De-carbonization Subsidy (all bands; captive-use projects)
| Band | Non-Red category (% of eligible project cost) | Red category (% of eligible project cost) | Max incentive |
|---|---|---|---|
| Sub Large | 10% | 15% | 6% of FCI (cap for this incentive) |
| Large | 20% | 25% | 6% of FCI (cap for this incentive) |
| Mega | 20% | 25% | 6% of FCI (cap for this incentive) |
| Ultra Mega | 30% | 35% | 6% of FCI (cap for this incentive) |
On plant & machinery invested in de-carbonization interventions (circular economy, clean production, waste reduction, resource efficiency, green energy, safety). Disbursed per the tenure of the respective band's investment subsidy.
F. Local Procurement Subsidy (Sub Large)
| Grant | Criteria |
|---|---|
| 1% of annual export turnover, reimbursed annually for 3 years from DCP (or within the policy period, whichever earlier) | Exporting units in select sectors registered in the State; eligible sectors as per operational guidelines; new & expansion projects |
G. Power Cost Reimbursement (Sub Large)
| Grant | Criteria |
|---|---|
| Fixed INR 1 per unit | For 2 years from date of commencement of commercial production |
H. Net SGST Reimbursement (Sub Large & Large)
| Grant | Criteria |
|---|---|
| 100% of net SGST payable, reimbursed for 5 years from DCP | On sale of final products manufactured, sold and registered in the State |
I. Stamp Duty, Land Conversion & Sick Units (all bands)
- •Stamp duty: 100% stamp duty and transfer duty on purchase of land for industrial use reimbursed; 100% stamp duty on lease of land/shed/buildings, mortgages and hypothecations reimbursed — one-time only on a given land, not on subsequent transactions.
- •Land conversion: 100% of land conversion fee reimbursed.
- •Sick units: Government will investigate and, case-to-case, extend support and revival measures.
Overall cap: the combined incentive a company can claim through this policy or any subsequent sectoral policies shall not exceed 100% of FCI in AP. Government is working towards an ESCROW account-based disbursement mechanism for timely payouts. The G.O.'s order portion also records Finance Department advice to cap maximum cash outgo under the Early Bird category at 75% of FCI.
Beyond direct subsidy
Land & Industrial Corridors
- •AP is the only Indian state with three National industrial corridors — VCIC (Visakhapatnam–Chennai), CBIC (Chennai–Bengaluru) and HBIC (Hyderabad–Bengaluru).
- •20 existing clusters with 14,093 acres of industrial land; 30 further clusters identified over ~1.3 Lakh acres (54,781 acres port-based, 75,683 acres hinterland), of which 44,777 acres already in State possession.
Private Industrial Parks — three development models
| Model | Structure |
|---|---|
| Model I | Complete private land — developer acquires land and builds full internal infrastructure (roads, power, water, ETP, sewage etc.) |
| Model II | Partial Government/APIIC land — Government consolidates land parcels; developer shares proportionate developed plots with the Nodal Agency/APIIC |
| Model III | Complete Government/APIIC land — competitive bidding, JV Agreement for development, O&M and marketing; proportionate plots to APIIC |
Incentives and models are detailed in the separate AP Policy for establishment of Private Industrial Parks with 'Plug and Play' Industrial Infrastructure (4.0) 2024-29.
Logistics, Tariffs & Labour
- •Raw material hubs: sector-specific giga-size fulfilment centres near ports for on-demand raw material availability.
- •Modal shift: development of National Waterway 4; two approved Dedicated Freight Corridors (Vijayawada–Itarsi, Vijayawada–Kharagpur) with prioritized road links to seaports.
- •Tariff rationalization: power, water, building permission and layout charges to be rationalized toward stable equilibrium structures.
- •Labour: a State Skill Census with industry associations; PPP-based industry adoption of ITIs; industrial housing (dormitories) on ear-marked land, offered to industries on rental basis.
MSME & Entrepreneur Support
- •A dedicated MSME and Entrepreneur Development Policy to be introduced separately.
- •175+ MSME parks — at least one per constituency — under the Private Parks models.
- •Dedicated corpus of INR 500 Cr towards CGTMSE, technology transfer, revival of sick units, R&D etc.
- •8-dimensional approach: MSME facilitation · incubation/mentoring · unit-level competitiveness · access to finance · sustainability & circularity · import substitution/export promotion · cluster infra development · special assistance for inclusion. Motto: One Family, One Entrepreneur by 2030.
What is needed, and the strings attached
| Condition / Evidence | Notes |
|---|---|
| Consent for Establishment (CFE) | Starts the standard investment period clock; also the trigger for Early Bird 18/24-month windows |
| Consent for Operation (CFO) + DCP within policy period | Mandatory for incentive eligibility, unless exempted through a G.O. |
| Committed completion date & plant capacity (in application) | Delay beyond committed DCP cuts investment subsidy 0.5% per month; Large/Mega/Ultra subsidy tranches release at 50%/75%/100% capacity milestones |
| New EPF accounts for employees | Evidence of cumulative on-payroll employment for the Employment Creation Subsidy instalments |
| GoI PLI approval letter & sanctioned incentive amount | Basis for the 10% Top-up, capped at 5% of AP FCI, proportionate to AP investment |
| Export turnover records (select sectors) | Basis for the 1% Local Procurement Subsidy, claimable annually for 3 years |
| Plant & machinery cost for de-carbonization interventions | Eligible project cost basis for the De-carbonization Subsidy; captive-use projects; Red/Non-Red categorization applies |
| Stamp duty / transfer duty / land conversion payment proofs | Reimbursed 100%; stamp duty one-time per land, not on subsequent transactions |
Gap / to confirm: The G.O. does not prescribe application formats or a document checklist — the operational guidelines, to be issued separately, will define terminologies (FCI composition, Red category, eligible sectors for local procurement) and claim procedures. Verify these before committing benefit figures in any client DPR, CMA or application.
How approvals and claims flow
- •Step 1 — Single Desk Portal: Investor applies on the SDP (operational since June 2015) — 93+ regulatory clearances across 19 departments to set up and operate business in 21 days, covering pre-establishment, pre-operation approvals and renewals, with online payment and status tracking.
- •Step 2 — Liaison support: A dedicated Liaison Officer from the Investment Facilitation Cell follows up with line departments and keeps the investor updated on approvals and pending pre-requisites.
- •Step 3 — CFE & project execution: On CFE, the band's standard investment period begins; the unit installs committed capacity and achieves DCP.
- •Step 4 — CFO & commercial production: CFO obtained and commercial production commenced within the policy's operative period.
- •Step 5 — Incentive claims: Claims filed as per the operational guidelines (to be notified); instalment disbursement runs from DCP per the respective band, proposed through an ESCROW account-based mechanism.
Re-engineered approval categories
| Category | Mechanism |
|---|---|
| Category 1 | Approval granted on self-certification, on 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 |
Foreign investors get country-specific desks with bespoke facilitation, local information/expertise and a business-opportunity portal. An Integrated Data Management System will track district-wise industrial output, integrate with PM Gati Shakti, and run an industry feedback forum. All re-engineering is to be done without compromising industrial safety.
Bodies governing the policy
| Body | Role |
|---|---|
| State Investment Promotion Board (SIPB) | Chairman: Hon'ble Chief Minister; Member Convener: Chief Secretary. Meets once a month for final decisions on investments/promotion activities and approval of Mega projects. Final authority on changes, amendments and tailor-made incentive packages. |
| State Investment Promotion Committee (SIPC) | Chairman: Chief Secretary; Convener: Commissioner of Industries. Meets monthly to review single desk performance, investment facilitation and project grounding, implementation of large/mega projects, screening of mega proposals, and issues meriting SIPB consideration; advises SIPB on tailor-made incentives. |
SIPC Members: Secretaries of Industries; Finance; Environment, Forest, Science & Technology; Revenue (LA); Revenue (CT); Employment & Labour; Energy & Infrastructure; MAUD; Panchayati Raj; Member Secretary, Pollution Control Board; VC & MD, APIIC; Commissioner of Industries (Convener); other Secretaries/HODs case-to-case.
Key dates and durations
| When | What |
|---|---|
| 26/10/2024 | AP Industrial Development Policy (4.0) 2024-29 notified vide G.O.Ms.No.68; substitutes IDP 2023-27 from this date. |
| 18 months from notification | Early Bird Category I window — first 200 eligible projects to receive CFE for the 30% of FCI subsidy. |
| 24 months from notification | Early Bird Category II window — PLI-sector projects to receive CFE for the 40% of FCI subsidy. |
| 2 / 3 / 3 / 4 years from CFE | Standard investment periods to achieve DCP — Sub Large / Large / Mega / Ultra Mega — beyond which the investment subsidy reduces 0.5% per month of delay. |
| DCP + 2 years | Power cost reimbursement window (INR 1/unit, Sub Large). |
| DCP + 3 years | Local Procurement Subsidy claim window (1% of export turnover, annually, Sub Large — or till policy end, whichever earlier). |
| DCP + 5 years | Net SGST reimbursement window (100% of net SGST); also the instalment tenure for Sub Large investment subsidy, PLI top-up and Sub Large employment subsidy. |
| DCP + 7 / 9 / 10 years | Instalment tenures — Large investment & employment subsidy (7); Mega employment subsidy (9); Mega/Ultra Mega investment subsidy and Ultra Mega employment subsidy (10). |
| 5 years | Validity of the Policy from date of notification, or till a new Policy is announced; extendable by the Government. Amendments apply prospectively and cannot curtail benefits already granted. |