Andhra Pradesh CM N. Chandrababu Naidu has launched an aggressive reform-driven investment and recovery strategy as the state attempts to regain its position as a major economic hub. Speaking to Business Today TV, Naidu said the last 16 months have been about systematically rebuilding institutions, restoring fiscal balance and re-establishing brand Andhra Pradesh after a turbulent five-year period.
Naidu’s return to power in 2024 with a historic strike rate of 94% under the NDA alliance, he said, reflects “deep public confidence” in his vision. “The state was going through a very difficult time. Institutions were gone, finances were strained and investor confidence had collapsed. My mission was to bring stability and then accelerate growth,” he said.
Naidu’s tech push
Naidu said the rebuilding phase is now giving way to a high-growth strategy anchored in technology. Drawing on his legacy in creating Hyderabad’s IT ecosystem in the 1990s, he highlighted that the next boom will be driven by AI, quantum technologies, drones, electronics and green energy.
To leverage this, the state has announced Space City, Drone City, Electronics City and Quantum Valley, with India’s first publicly deployed quantum computer expected to arrive by January. Naidu says Andhra Pradesh has already attracted Rs 20 lakh crore of investment commitments in 18 months, with the potential to generate 20 lakh jobs.
Escrow accounts
A key reform is a state-guaranteed, escrow-based compensation mechanism, which eliminates any interaction between investors and government officials. As per the new norms, the state government will create escrow accounts for investors to ensure timely disbursement of promised incentives. Once the MoU is signed with the Government of Andhra Pradesh, an escrow account will be created automatically to enable real-time release of funds through the bank, eliminating any need for tracking, with a sovereign guarantee offered if required.
“Once a factory starts up, incentives and permits will be automatic. It’s a real ease – and speed – of doing business,” he said.
Naidu plans an additional Rs 30 lakh crore in investments and up to 50 lakh new jobs over the next three years. Its “One family, one entrepreneur” initiative aims to build a globally competitive knowledge economy, mastering AI.
“My goal is clear,” Naidu said. “Making Andhra Pradesh a global innovation hub and seeing Telugu become global leaders.”
Earlier in the day, Naidu said Andhra Pradesh had signed investment deals worth Rs 13 lakh crore in just two days at the CII Partnership Summit. With this, the total state-guaranteed investments crossed Rs 20 lakh crore, including Rs 8.87 lakh crore mobilized in the last 16 months.
The government is targeting $500 billion in overall investments. Naidu also laid the virtual foundation stone of three Raymond Group projects totaling Rs 1,202 crore, including an apparel unit in Ratpadu and two auto and aerospace component manufacturing plants in Anantapur district. All three projects are expected to begin operations by December 2027.
Weak FDI sets the context
This new impetus comes at a time when Andhra Pradesh is struggling to attract foreign direct investment. Between October 2019 and June 2025, the state received only $1.27 billion, placing it 14th among Indian states, far behind its southern peers.
The contrast with neighboring countries is striking. In the June 2025 quarter, Andhra attracted only $307 million, while Karnataka received $10 billion, Tamil Nadu $5.4 billion and Telangana $2.3 billion. Even smaller states, like Kerala and Haryana, recorded higher inflows. Andhra’s share in national FDI has remained between 0.2 and 0.7 percent over the last six years, compared to 14 to 28 percent for Karnataka and 3.7 to 10 percent for Tamil Nadu.
In total since 2019, Maharashtra has attracted $94 billion, Karnataka $63 billion and Gujarat $46 billion. Tamil Nadu brought in $17.3 billion and Telangana $11.2 billion. Andhra Pradesh’s $1.27 billion puts it not only behind its neighbors but also behind states like Haryana, Rajasthan and Jharkhand.
