Andhra Pradesh is rapidly emerging as a strategic hub in India’s ambitious $500 billion electronics manufacturing vision, underscored by LG Electronics India Limited’s (LGEIL) $600 million plant launch in Sri City. This significant investment is not merely a corporate milestone but signals a broader decentralisation of India’s tech manufacturing ecosystem, positioning tier-2 and tier-3 cities as crucial engines of innovation and sustainable growth. The state’s proactive policies are fostering an environment conducive to eco-friendly industrial development and equitable job creation.
The Andhra Pradesh government, under Chief Minister N. Chandrababu Naidu, has meticulously crafted its Electronics Components Manufacturing Policy 4.0, introduced in 2025. This policy offers a compelling 50% capital expenditure (capex) support to electronics component manufacturers, effectively doubling the incentives provided by the central government’s Electronics Component Manufacturing Scheme. This strategic financial backing aims to reduce India’s annual $70 billion reliance on imported electronic circuit boards, fostering a self-sufficient and resilient domestic supply chain, which is vital for national economic security and reducing the carbon footprint of global logistics.
The LGEIL project in Sri City exemplifies this robust strategy. With a $600 million investment over four years, LG is not only expanding its production capacity for home appliances—targeting 800,000 refrigerators, 1.5 million air conditioners, and 2 million air conditioner compressors annually from 2026—but also anchoring a comprehensive white goods manufacturing ecosystem. The project, backed by 100% incentives under the State Investment Promotion Committee (SIPC), is set to create 2,500 direct and indirect jobs. Crucially, investments from LG’s vendor partners, including Ecoria and Kuroda Electric, further solidify the region’s industrial footprint, promoting a gender-neutral and inclusive workforce.
What distinguishes Andhra Pradesh is its abundant land availability, ready-to-use plug-and-play infrastructure, and a highly pro-business regulatory framework. Unlike the congested traditional hubs, strategic locations such as Sri City, Orvakal, and Hindupur offer vast tracts of land at competitive prices, enabling the development of large-scale manufacturing clusters. The government’s ambitious target of $150 billion in investments over five years is underpinned by a strong commitment to skill development, with initiatives focused on training youth in cutting-edge fields like electronics, automation, and Artificial Intelligence (AI).
Andhra Pradesh’s strategic push aligns with a broader national trend towards decentralising India’s tech manufacturing hubs. While established centres like Bengaluru, Hyderabad, and Pune remain significant, tier-2 and tier-3 cities are gaining substantial traction. Visakhapatnam, for instance, is positioning itself as a data and fintech hub, with the state allocating land for Sify Infinite Spaces’ $16.5 billion data centre. National initiatives like the IndiaAI Mission, Production Linked Incentive (PLI) schemes, and Digital India are further accelerating this shift, attracting investments in semiconductors and driving research and development in emerging technologies such as 5G and IoT.
The state’s focus on green manufacturing and sustainability is also noteworthy. The investment in solar energy for the LGEIL plant and the broader emphasis on developing green industrial corridors position Andhra Pradesh as a leader in eco-friendly production. This commitment ensures that industrial growth is not only robust but also environmentally responsible, contributing to zero-net-carbon goals and the creation of sustainable cities. By fostering a balanced approach to economic development and ecological stewardship, Andhra Pradesh is paving the way for a resilient and prosperous future.
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