Andhra Pradesh Electronics Incentives

“To  develop  Electronics Industry as an  important  Growth Engine for Andhra Pradesh  through effective  use of the  talent  pool, skill enhancement, promotion of  innovation  & future technologies and creation of excellent infrastructure.”

The Policy aims to attract investments to the tune of USD 5 Billion in ESDM sector and create an employment of 0.4 Million by 2020.

CCITI (Consultative Committee for Information Technology Industry) would administer the incentives in a speedy, time-bound and transparent manner.

Fiscal Incentives

  • Company category and incentives model:
Category Incentive Amount based on  Investment
Mega Projects 30% of investment capped at ₹250Cr.
General Projects 25% of investment capped at ₹250Cr.
MSME/ SC/ ST/ Women Projects 30% of investment capped at ₹250Cr.


  • Power Subsidy: 25% Power subsidy for Mega Projects and 20% Power subsidy for all other categories of companies for a period of five years.
  • Training Companies are eligible for investment subsidy of 50% or Rs. 1 Cr, whichever is lower.
  • Exemption of Electricity Duty: New Electronic Hardware units, after coming into commercial operations will be entitled for 100% exemption on Electricity duty for a period of 5 years.
  • VAT/ CST Reimbursement: 100% Tax reimbursement of VAT / CST, for the new units started after the date of issue of this Policy, for a period of 5 years from the date of commencement of production for products manufactured in AP and sold in AP.

(Mega Projects: Mega Projects are the projects or the investment intents with minimum Investment of Rs.250 crores (2.5 Billion) or the ones that can create an employment of more than 2,000 persons in a span of five years. A special dispensation would be provided to the Mega Projects.)

Additional Incentives

  • Capital investment subsidy of 50% capped at ₹1 crore for setting up finishing schools for Electronics Sector in colleges and educational institutions. Local Electronics associations imparting training in Electronics domain would also be entitled to this benefit.
  • Multiple Electronics Clusters (MECs): MECs intends to create infrastructure highly suited to electronics units by providing a subsidy of 50%. The Government of Andhra Pradesh proposes to promote the development of 20 EMCs across the State, by facilitating the preparation of project proposals by the entrepreneurs and providing single-window clearances.
  • Power subsidy to be harmonized to 20% for 5 years across all category of companies.
  • Renewable Energy: Units using renewable source of energy with a minimum of 40% of their power requirements coming from renewable sources for their operations and manufacturing will be eligible for additional incentives such as

-Electricity Duty exemption for 5 years

-Sales tax exemption for two additional years shall be available against the Carbon Credits earned on a year-on-year basis.

Land Usage

  • Mixed land use: Up to 20% of the built-up space can be used for employee housing and recreation purposes.
  • Project Timelines: Companies / Enterprises which are allotted land shall follow the timelines as mentioned below:
T = Date of CCITI Meeting & Decision for Land Allotment
T+3 months T+6 months T+36 months T+60 months T+72 months
Company to start operations in leased premises Begin Construction 30% of employment obligation to be fulfilled 70% fulfilled 100% fulfilled
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“One lakh new IT jobs for the youth will be created in the state within a couple of years. Five lakh jobs would also be created in the electronics, manufacturing sectors etc. “

Shri Nara Lokesh
Minister , Information Technology

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