Telangana’s progress of 9.5 years undone in 5 months!
From being a top investment destinaton, State under Congress regime has seen several big companies turn their attention to somewhere else
Hyderabad: The new State of Telangana took baby steps like no one ever did before. In fact, the transition from baby steps to a full-fledged race along the path of development from 2014 to 2023 was one that stunned every other State, leaving behind many of the older States as the country’s youngest State reached the top in multiple sectors in double quick time.
Industries was one area where Telangana stamped its dominance, cutting across pharma, defence and aerospace and life sciences sectors to emerge as the preferred destination for investments for the biggest names from across the globe. In fact, industry giants were impressed with Telangana’s speed in according permissions and allocating land with tailor-made, transparent policies, a fact that was underlined by Foxconn chairman Young Liu, who praised ‘Telangana Speed’.
“Telangana is so fast. This is critical, especially for the hi-tech industry. Speed is essence and with that you can do almost anything. There is no big fish small fish. Fast is the key,” Liu had said after inaugurating T–Works on March 2 last year.
“Telangana gave me confidence and working with it is very likely to be able to double the revenue of Foxconn. Without speed it is not possible. With Telangana’s speed it is possible,” Liu added.
The surge owed largely to the relentless efforts of the then IT and Industries Minister, KT Rama Rao. His pitch for investments in Telangana at global forums like the World Economic Forum and international get-togethers apart from touring countries to secure deals with potential investors, along with his suave approach, saw many from other States posting on social media asking whether he was actually a politician or the CEO of a multinational conglomerate. His swift action of sending a team and then a chartered flight to bring Kitex Group chairman Sabu Jacob from Kerala to Hyderabad, which led to multiple deals worth about Rs.3,000 crore showed how the then Telangana government was steadfast in its commitment to develop the State’s industry.
Henry Fisker, Chief Executive Officer of American electric vehicle maker Fisker Inc that established its Indian headquarters in Hyderabad in 2022, praised the Telangana government, calling it pro-business while saying in an interview how Rama Rao had met him in the US and convinced him to invest here. Similar words were a regular phenomenon in inaugural ceremonies and expansion launches of multiple global majors, especially in the pharma and life sciences sectors.
Home for Aerospace, Defence sector
From being a popular hub for supply of crucial components for the aircraft and aviation sector, Telangana, particularly Hyderabad and its suburbs, fast evolved into a home for several international companies in the sector. Amazon’s exclusive cargo airline Amazon Air was launched in Hyderabad for foraying into the country in an attempt to enable faster deliveries to its customers. It also became the first e-commerce company in India to launch a dedicated air cargo network.
Today, Telangana has a strong presence of over 25 large companies and over 1000 MSMEs in the private sector. Original Equipment Manufacturers such as Lockheed Martin, Boeing, Safran, Tata, GE, Aviation, Pratt and Whitney, Honeywell, Collins Aerospace have invested in Telangana and have set up their units here. Tata Advanced Systems Limited (TASL) secured an Airbus contract to manufacture cargo and bulk cargo doors of the A320neo aircraft family. Global defence aerospace player Lockheed Martin and India’s Tata Group inked an agreement for production of fighter plane wings at their joint venture Tata Lockheed Martin Aerostructures Limited (TLMAL) in Hyderabad.
Pharma sector
The previous BRS government had planned to enhance the life sciences ecosystem from a US $50 billion sector to a US $100 billion dollar sector by 2025. To achieve US $80 billon dollar value in 2022 was no mean achievement, a fact that is evident from that no other State could match Telangana’s rise and speed in the life sciences sector. In tune with the rapid progress in the sector, the government had planned to increase the workforce from four lakh to eight lakh in the life sciences and allied sector in the next five years. Similarly, there were plans to add additional 20 lakh square feet real estate space at Genome Valley, Shamshabad in addition to the existing nearly 30 lakh square feet built up space. The vaccine production was targeted from nine billion doses to 14 billion doses or about 50 per cent of the vaccines made globally by 2024.
Telangana would have been home to the world’s largest integrated pharma manufacturing cluster – Pharma City – but unfortunately, the project has been shelved by the new Congress government, which says it wants to develop 10 pharma villages to ensure “scattered growth”.
Food processing sector
As of 2023, the food processing sector had a fixed capital base of nearly Rs.7,000 crore with more than 4,000 food processing units operating in the State, providing employment to about 1 lakh personnel. As of March 2023, 351 acres were allotted to 77 food processing companies and 803 acres under evaluation for various food processing companies in the Special Food Processing Zones. Further, several mega projects with total fixed capital investment of more than Rs.7,200 crore and direct employment of more than 58,000 personnel were under various stages of implementation when the BRS was in power.
The Big Tumble
Hyderabad: Seldom has a change in government affected a State’s industrial surge as it did in Telangana in the last five months. The first few months of the Congress government, when the Chief Minister and his Ministers went on an unbridled mudslinging campaign on the previous BRS government, with white papers that painted a pathetic picture of the State before the world, did unimaginable damage. From Tesla to Corning to Kaynes, big names appeared to have turned their attention elsewhere.
Chief Minister A Revanth Reddy, however, was quick to shift the blame on to the BJP-led Centre, claiming that American automotive company Tesla had wanted to invest in Telangana, but was “pressurised” to shift to Gujarat. In an interview to India Today TV, the Chief Minister even said that Foxconn and Tesla were “pressurised” to leave Telangana.
In December last, reports emerged of Corning Inc, the US-based Gorilla glass maker, planning to relocate its proposed plant from Telangana to Tamil Nadu. In September last, the previous BRS government had convinced the company to set up a unit for manufacturing gorilla glass, used extensively in mobiles, tablets and laptops. IT Minister D Sridhar Babu had however denied this, stating that the State was “still in active discussions” for grounding Corning’s project here.
In March this year, Kaynes Semicon also planned to shift its chip assembly unit from Telangana to Gujarat. One of the leaders in Outsourced Semiconductor Assembly and Test (OSAT) facilities, Kaynes Technology had in October last signed a pact with the then State government for setting up its OSAT and compound semiconductor manufacturing facility in the State. The Rs.2,800 crore investment project was to come up in Kongara Kalan, adjacent to the upcoming electronics manufacturing facility of Foxconn.
Interestingly, the announcements from the World Economic Forum at Davos, Switzerland, that Revanth Reddy and team had secured investments to the tune of Rs.40,232 crore, had given the impression that the Congress might have learned a lesson or two in hardselling itself, but apart from the announcements, many companies are yet to finalise agreements or confirm their investments in Telangana.
No policy yet for new Govt
It has been close to six months but the Congress government is yet to come up with an Industrial policy of its own. It was only on Tuesday that the Chief Minister held a meeting with officials, asking for a new policies for industrial development.
