Telangana draws investment from China as Centre fails
Over 20 companies that were operating in China, dealing in pharmaceuticals, life sciences, electronics and information technology, have established their units in Telangana
Hyderabad It is not without reason that Telangana is called a role model for the country. Even as a report by the Parliamentary Committee on Commerce points out that the Centre failed to take advantage of the ‘China Plus One’ strategy and create a positive impression among businesses moving away from the neighbouring country, Telangana’s story is entirely different.
In the last few years, at least 20 plus companies that were operating in China, dealing in pharmaceuticals, life sciences, electronics and information technology, have established their units in Telangana, according to Principal Secretary (IT & Industries) Jayesh Ranjan.
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These are apart from other global majors that were impressed with the Telangana government’s vision and ecosystem, like Taiwanese major Foxconn which has announced a unit at Kongara Kalan that could generate one lakh direct and indirect jobs.
Telangana has, in fact, become the preferred destination for major firms in pharmaceuticals, a sector that the Parliamentary Committee mentions in its report as one with India having high import dependence for bulk drugs or Active Pharmaceutical Ingredients (APIs), especially from China.
The Genome Valley at Shamirpet stands as an example of Telangana’s excellence in this sector. Several top global companies, which had crucial operations in China, have established their units at Genome Valley impressed with the ecosystem and time-bound approvals, all in the last couple of years.
On the contrary, the Centre, the report says, could not capitalise on the trend in which major companies were looking to establish their new units outside China, considering different reasons, including political affairs. The Committee points out that Southeast Asian countries such as Vietnam, Thailand, Cambodia and Malaysia were major beneficiaries of the shifting trend.
On the other hand, India was undermining its position, especially in the pharma sector, and continued to import bulk drugs or APIs. In 2022-23, India till November imported 70 per cent of APIs from China, the Committee noted.
This is when States like Telangana have been asking for production- and performance-linked incentives and support. Industries Minister KT Rama Rao, in fact, has been appealing to the Centre to extend more support to progressive States like Telangana.
Prior to the union Budget, he wrote to union Finance Minister Nirmala Sitharaman, asking for support for the world’s largest single pharma cluster, the Hyderabad Pharma City, being established in the State. Though the Pharma City could be the next game changer, the Centre has remained idle, just as the Parliamentary Committee report points out.
How Telangana secured investments from China
The State’s Invest Telangana wing, which has the sole agenda of identifying and tracking potential investors, listing out their requirements and arranging interactions, is a crucial player.
Fourteen priority sectors were identified eight years ago, according to Jayesh Ranjan. Top professionals were drawn to lead each sector as directors. Each sector works on customising and fulfilling investors’ requirements.
Based on their advantages, accessibility to raw materials, working productivity, low wages or other facilities being extended in China or other countries, the directors frame similar assurances, customise or even improve services to ensure the investors get what they want, he said.
Investors are invited to the State to inspect the ground realities. This is followed by interactions with industry players. Based on their feedback, investors announce their plans, he said.
Some companies have set up additional units here, some have set up export units, while some have production and export units while slowly moving out of China, he said.
‘Investment & Development in Telangana’ study
Meanwhile, according to a study by the MSME Export Promotion Council (EPC) and the Confederation of Organic Food Products & Marketing Agencies, Telangana has also witnessed a jump of nearly 150 per cent in new investment proposals in the 2021-22 fiscal creating over 60,000 new direct job opportunities as against the investment proposals received in the 2020-21 fiscal.
The investment proposals announced in the 2021-22 fiscal were for Rs 76,568.89 crore as against the proposals for Rs 31,274.56 crore received in 2020-21.
The study, ‘Investment and Development in Telangana’, said in 2021-22, the total worth of projects completed were of Rs 22,079.59 crore and revived projects worth Rs 11,590.00 crore.
The total investment projects outstanding were of Rs 7,19,388.39 crore and under implementation were of Rs 4,90,985.24 crore, according to the CMIE data.
Despite the challenges during the pandemic year, the State achieved a positive growth rate of 2.2 per cent despite the pandemic year, while the country’s GDP declined by 1.4 per cent.
