Telangana’s industrial momentum dips as policy shifts, stalled projects, shrinking investments raise concerns

Telangana’s once-rapid industrial growth has slowed sharply over the past two years, with stalled projects, declining TG-iPASS approvals, investment drops and policy uncertainty. Questions are also rising over land conversion plans, withheld IT export data and the status of Davos-announced investments

Hyderabad: They say well begun is half done. That was true for Telangana, soon after the formation of a separate State. In less than 10 years, under the BRS, the State made a name for itself as a sought after destination, not just for Indian companies, but for global majors as well. The aggressive surge in the field of industry and information technology witnessed the capital city of Hyderabad turning a second home to big marquee names like Facebook, Amazon, Microsoft, Google, Apple, Qualcomm and Uber, with many already dubbing Telangana as the new California of the East.

However, the regime change altered the script. Despite all the shouting from the rooftop that they would make Telangana rise, the Congress government has proved that it was just full of sound and fury, signifying nothing but politically motivated moves and policies, focus on wiping out the past government’s imprints and other measures that dented the confidence of the industry sector in the State.

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A classic example was the Pharma City project, conceived by the previous BRS government as the largest manufacturing cluster at Mucherla in Rangareddy district. In February 2024, the Congress government announced that the Hyderabad Pharma City was shelved. Instead, 10 Pharma Villages would be established with each village spreading over 1,000 acres to 2,000 acres. It did not have a sound explanation and when farmers approached the High Court, asking for the lands acquired from them to be returned, the government suddenly claimed that the Pharma City was not scrapped. The project would be continued as the ‘Green Pharma City’, it claimed in court.

Forget the green rhetoric, even after two years, none of the villages too have seen a single brick laid. Uncertainty, confusion and chaos stare the project in the eye. Legal trouble also cropped up when farmers and landowners protested, with the government responding with police muscle, forcing the National Human Rights Commission and the SC/ ST Commission to intervene.

That was just a sample of how the State’s once rising industrial sector would fare under the Congress. Its abject failure to infuse confidence in industrialists and protect their interests forced quite a few to even relocate their units, existing and proposed, to other States. This began with Corning International Corporation in March 2024, with its units being shifted from Telangana to Tamil Nadu. The same year, Kaynes Technology shifted its Rs 2,800 crore chip assembly unit from Kongara Kalan to Gujarat. When former Industries Minister KT Rama Rao slammed the Congress government for its failure, the government dubbed them as baseless allegations. But the truth came out in August this year, when Industries Minister D Sridhar Babu admitted that the unit had been shifted to Sanand in Gujarat after the local government offered more incentives.

Sound and fury again in Davos

Even when the ground under its feet was slipping, the Congress government was not short of claims, and boasted about securing huge investments at different platforms, especially during the World Economic Forum (WEF) Davos editions in the last two years. In 2024, it claimed to have secured investments worth Rs 40,232 crore, while after the 2025 edition, it claimed to have secured Rs 1.79 lakh crore in investments. However, the investments and employment figures approved for the manufacturing sector through TG-iPASS for the financial year 2024-25, reveal an entirely different picture. As on February 28, 2025, 1476 units were approved with a cumulative investment of Rs 9,850.23 crore generating employment of 38,598, as per the Socio Economic Survey report 2025.

Though, it is understandable that it takes a few years for the agreements signed at Davos meetings to transform into investments, the sluggish pace of project grounding is also a cause of concern. Officials are tight-lipped over sharing details of investments and projects grounded after the Davos meetings. Official sources indicate that the total investments over the two Davos editions might not go above Rs 21,000 crore.

In between, indicating that all was not well, officials have stopped updating the year-wise industry approvals and employment generation details on the TG-iPASS website. From available statistics, the picture is too grim. Telangana has recorded a steady decline in industrial approvals, proposed investments and employment generation over the last three financial years.

Data shows the number of industries approved fell from 2,659 units in 2023–24 to 2,050 units in 2024–25, and further down to 915 in 2025–26. Correspondingly, investment proposals plunged from Rs 28,100.14 crore in 2023–24 to Rs 13,730.79 crore in 2024–25, before dropping to Rs 4,869.06 crore in the current fiscal year. Employment generation estimates also shrunk sharply. Jobs promised through new industrial units stood at 84,332 in 2023–24, 50,326 in 2024–25, and just 23,455 so far in 2025–26.

Hyderabad Industrial Land Transfer Policy

The chaos that the industry sank into over the last two years got only worse with the latest policy, as per which the Congress government plans to convert 9,300 acres of industrial land into multi use zones. Retired professors have filed Public Interest Litigations in the High Court challenging the government order on HILTP, citing environmental impact, public health disaster and other concerns. Accordingly, the High Court has directed the government to file a counter affidavit. Experts and opposition parties are questioning the rationale behind permitting the land conversion by collecting 30 per cent to 50 per cent fee on the Sub Registrar Office (SRO) value against the much higher market value of the lands.

Considering the bids quoted for TGIIC plots auctions ranging from Rs 151 crore per acre to Rs 171 crore per acre, the State government’s move to permit land conversion for 30 per cent to 50 per cent of SRO value triggered doubts among many, with the BRS cautioning of a major scam in the making.

Renaming old ecosystems, for what?

Another amusing fact about the Congress government is that apart from renaming and tweaking BRS-era welfare schemes, it is now renaming industrial ecosystems that were initiated by the BRS.

For instance, Industries Minister D Sridhar Babu on Thursday unveiled 1 Bio at Genome Valley. It was earlier known as Biopharma Hub (B-Hub) and is India’s first single-use bioprocess design and scale-up facility. It was conceptualised in September 2021. Why the name change? No one knows.

On the other hand, even as the State government claims rising exports in defence, aerospace and other sectors, it has maintained silence on IT exports after a noticeable dip in 2023–24. While officials claimed an 11.28 per cent increase taking cumulative IT exports to Rs 2.68 lakh crore with employment touching 9.5 lakh, the year-on-year figures reveal a shrinking sector. IT exports, which stood at Rs 57,706 crore in 2022–23, plunged to Rs 26,498 crore in 2023–24.

For the current financial year, the government has not yet released official IT export figures, despite earlier projections of crossing Rs 3 lakh crore. The lack of disclosure has raised questions over the actual performance of the State’s flagship sector and the reasons behind the data being withheld.