Investors value certainty more than subsidies: Andhra Pradesh CM Naidu

Chandrababu Naidu outlines Andhra Pradesh's roadmap to a $1 trillion economy, focusing on investment, AI, infrastructure, exports, fiscal discipline and demographic challenges

Two years into his term, Andhra Pradesh Chief Minister N Chandrababu Naidu outlines the state’s growth strategy — from investment and exports to ‘speed of doing business’, the $1 trillion economy vision, a sovereign wealth fund, and tackling the challenge of a falling fertility rate — in an email interaction with Archis Mohan. Edited excerpts:

 

Your government completed two years on June 12. How do you assess its performance, and what are the priorities for the next three years?

 

The first two years were about restoring confidence, rebuilding institutions, and putting Andhra Pradesh back on a growth path. When we assumed office, we faced challenges in public finances, infrastructure, investor confidence, governance systems, and Brand AP.

 

We revived Amaravati, accelerated Polavaram, strengthened welfare delivery, improved technology-driven governance, and attracted investments across manufacturing, electronics, energy, logistics, digital infrastructure, and deeptech.

 

The next three years will focus on execution at scale — grounding investments, creating jobs, completing infrastructure projects, strengthening education and skilling, accelerating urban development, and using technology to make governance more efficient. Our goal is to build a globally competitive Andhra Pradesh under our Swarna Andhra Vision 2047.

 

How will Andhra Pradesh benefit from India’s free trade agreements (FTAs)? How did the state manage US tariff-related export challenges?

 

India’s expanding FTAs create opportunities for Andhra Pradesh because of its coastline, ports, agriculture base, aquaculture leadership, manufacturing ecosystem, and strengths in electronics and clean energy.

 

We see growth opportunities in seafood, food processing, pharmaceuticals, textiles, engineering goods, rare earths, electronics, renewable energy equipment, and chemicals.

 

On tariff challenges, especially in seafood exports, we worked with exporters and the Government of India. Our focus was on market diversification, value addition, quality improvement, cold-chain infrastructure, and short-term support for producers. Despite challenges, seafood exports expanded this year. The lesson is that we must reduce dependence on any single market.

 

You have highlighted ‘speed of doing business’ over ‘ease of doing business’ to attract investments worth over ₹23 trillion. What can other states learn?

 

In the past, we focused on ease of doing business and became one of India’s fastest-growing investment destinations. Today, investors want quick decisions, faster approvals, ready infrastructure, and policy stability.

 

That is why we emphasise speed of doing business. Incentives may attract attention, but infrastructure, governance, and certainty determine where investments finally happen.

 

States must compete on governance quality, infrastructure, skilled manpower, logistics, transparency, and reliability rather than subsidy competition. Governments must act as facilitators and partners rather than regulators alone.

 

What is the blueprint for making Andhra Pradesh a $1 trillion economy?

 

Our strategy is to build on Andhra Pradesh’s strengths — its coastline, agriculture, renewable energy potential, minerals, human capital, and global connectivity.

 

We are developing clusters across manufacturing, electronics, data centres, artificial intelligence, renewable energy, green hydrogen, ports, logistics, steel, food processing, aquaculture, tourism, pharmaceuticals, aerospace, defence, critical minerals, and semiconductors.

 

Visakhapatnam is emerging as an artificial intelligence and data centre hub. Kakinada is positioned as an energy and industrial centre. Sri City and Tirupati are expanding as electronics and advanced manufacturing hubs. Amaravati will serve as a knowledge, governance, and innovation capital.

 

The objective is not only economic growth but growth that creates jobs and improves living standards.

 

You have raised concerns about falling fertility rates. How does your government plan to address this?

 

Declining fertility rates are a major long-term challenge. It is not only a demographic issue but also an economic one, as a shrinking workforce can affect growth.

 

Our approach is not based on compulsion. We want to create an environment where families feel confident about raising children through better healthcare, education, childcare support, women’s safety, family-friendly workplaces, and measures that reduce the financial burden of raising children.

 

Human capital is our greatest resource, and healthy population growth is an investment in Andhra Pradesh’s future prosperity.

 

What is the structure and timeline for the Andhra Pradesh Wealth Fund?

 

The Andhra Pradesh Wealth Fund aims to create long-term value for future generations. It will be a professionally managed and transparent investment platform that can unlock value from public assets, infrastructure projects, land monetisation, and strategic investments.

 

The fund is not meant to finance routine government expenditure. Its purpose is to create long-term capital for infrastructure, strategic industries, innovation, and future growth.

 

We are working on its governance structure and investment framework to ensure global standards of accountability and transparency.

 

Andhra Pradesh has high social security pension spending. How do you balance welfare and growth?

 

Welfare and growth are not competing objectives. Welfare provides security, while growth creates opportunities.

 

We prioritise social security pensions for senior citizens, widows, and persons with disabilities. At the same time, technology and direct benefit transfers have improved transparency and efficiency.

 

Our P4 concept connects the top 10 per cent of society with the bottom 20 per cent to support inclusive development. However, welfare alone cannot transform society. Long-term poverty reduction requires jobs, investment, entrepreneurship, and skills.

 

What are the challenges and opportunities in Andhra Pradesh’s mining sector?

 

Andhra Pradesh has rich mineral resources, including limestone, barytes, beach sand minerals, rare earth elements, and critical minerals.

 

The challenge is moving beyond extraction to value addition, processing, and advanced manufacturing. Critical minerals are essential for electric vehicles, renewable energy, defence, electronics, and modern industries.

 

Our vision is to make Andhra Pradesh a strategic materials hub through responsible mining, transparent regulation, sustainability, and stronger links between mining and manufacturing.

 

Is the state’s fiscal deficit and rising liabilities a concern?

 

Fiscal discipline remains important. However, Andhra Pradesh has faced unique challenges after bifurcation, including rebuilding institutions and infrastructure.

 

Our focus is on improving revenue mobilisation, reducing wasteful expenditure, leveraging public-private partnerships, and investing in productive assets.

 

Debt that creates long-term assets and economic capacity must be viewed differently from debt used for unproductive purposes. Our objective is fiscal responsibility along with sustained growth.

 

Could the Centre do more to compensate Andhra Pradesh for the loss of Hyderabad after bifurcation?

 

Bifurcation created a unique challenge as Hyderabad had developed into a major economic and technology centre. Andhra Pradesh had to rebuild institutions and create a new capital.

 

The Centre has supported the state in important areas, and we appreciate that partnership. We believe continued cooperation will help Andhra Pradesh grow through Amaravati, ports, logistics, manufacturing, technology, and infrastructure.

 

Our growth is not only a state objective but also a contribution to India’s economic development.