In the year 2020, Andhra Pradesh converted only 64% of investment proposals into actual investments. These investments also include investments from proposals in the previous years. According to the Department of Promotion of Industry and Internal Trade, Andhra Pradesh ranked lower than other major states like Gujarat which had a conversion rate of 128%, Telangana had 79%, and Madhya Pradesh had 72%.
Not only has Andhra Pradesh had a lower conversion rate this year, but the number of proposals coming towards the state has also considerably decreased. In 2018, Andhra Pradesh received 161 investment intentions, 139 in 2019, and until October 2020 merely 55 investment proposals were filed. The proposed value of investments has more than halved since 2018 from Rs. 19,804 crore to Rs. 9389 crore until October 2020. The YSRCP government’s policies and uncertainty regarding the capital city have discouraged investors.
India attracted $20 billion worth of foreign investments between April to July 2020. India was the most preferred investment destination in the year of the pandemic. Companies such as Google, Facebook, and Walmart made massive investments in the country. Foxconn, the makers of Apple iPhones decided to shift operations from China to India. The company decided to set up operations in Chennai and Bengaluru. Thomson, a consumer electronic brand committed $143 million to expand its manufacturing plant in Noida. Hyundai decided to expand its technical center, it now has two centers in Tamil Nadu. Other foreign companies include Samsung, SGS, Axtria, WeWork Global, Tsuzuki. All of these have picked destinations other than Andhra Pradesh.
In 2020, Kia Motors announced its decision to invest $54 million in its manufacturing facility in the Anantapur district. The investment is an addition to its initial investment of Rs. 12,900 crore for a new manufacturing unit undertaken during the TDP regime. The then Chief Minister Chandrababu Naidu launched the trial run of the first car in India. This was one of the largest foreign direct investments to the country. No other significant investment has come to the state since.
The current Andhra Pradesh government has failed to promote Andhra Pradesh as a viable investment destination. If the number of investment proposals is any indication, foreign companies setting up operations in the state will only reduce further.