What you need to know about Andhra Pradesh’s Aerospace and Defence Manufacturing Policy


According to the Aerospace & Defence Policy released by the Andhra Pradesh government, “the state government has identified Aerospace and Defence Manufacturing as thrust sector for industrial development. The Sector has tremendous potential to generate upstream & downstream investment opportunities and foster innovation & growth.”

In other words, the policy aims to turn Andhra Pradesh into the hub of aerospace and defence manufacturing in the country.

Here are some whats, hows and whys about the policy.

India’s Defence and Aerospace Market:

India’s Aerospace & Defence market is the fastest growing in the world and is estimated to be an industry of Rs. 5 Lakh crores in the next 10 years. With 1.81% of the country’s GDP (2014-2015) spent on defence, the country has the 9th highest defence expenditure in the world.

Aim of the policy:

The policy aims to take maximum advantage of the excellent port facilities, large land bank, infrastructure and skilled man-power that the state has to facilitate logistics in the sector.

Aiming to generate 5000 high-skill employment opportunities, the government aims to attract investments of Rs. 20,000 crore in the sector by 2020. Something to rejoice about for all engineering students.

With an aim to attract big players like Lockheed Martin and Airbus; the policy will attract at least 4 anchor unit investments of over Rs. 1000 crore each in the sector.

For the Investors:

Tailor made incentives in investment, technology and infrastructure will be provided for Mega Projects (companies with investments of more than Rs. 500 crore).

For easy clearance of permissions and licenses, the government aims to introduce a single desk clearance system; simplifying all the procedures and streamlining the processes.

A special cell would be constituted under the chairmanship of Secretary, Department of Industries and Commerce; to attract and hand hold high potential investors in A&D sector and to facilitate and streamline defence projects of national importance.

The government plans to set up Aerospace and Defence Parks in Ananthapur and Nellore; providing plug and play industrial infrastructure. This, is in addition to the connectivity support provided by the development of roadways and waterways.

The government will provide subsidy of upto 50% of the cost of land, building, plant and machinery subject to a maximum of Rs. 25 crore for testing center, Rs. 30 crore for technology innovation center and Rs. 50 crore for the common facility center.

Simplifying labour laws; the government will permit Aerospace and Defence industry to function 24X7; provided they stick to labour rules and have proper shift timings for employees.

The industry will be declared to be a ‘Public Utility’; to prevent strikes.

Tax Rebates:

The government will also provide a 100% Entry Tax exemption on  ‘Plant & Machinery and capital goods’ for an initial period of 3 years; in addition to providing a 100% VAT/CST exemption on all aircraft brought specifically for this sector.

R&D investments of more than Rs. 10 crore in the defence sector will be eligible for a 10% subsidy on investments.

New airports and an Aerotropolis

Eight new airports have been planned across the state; in addition to revamping the existing ones. This includes the setting up of a Greenfield International Aerotropolis at Bhogapuram, near Visakhapatnam.

The policy also plans to set up an Air Cargo Complex near Visakhapatnam (as part of the proposed Bhogapuram Aerotropolis). The complex will be an integrated facility housing both domestic and international cargo terminals under one roof; with processing, storage and handling facilities.

The setting up of a world class Maintenance, Repair and Overhaul (MRO) facility as part of the proposed Bhogapuram Aerotropolis near Visakhapatnam. This will be a state-of-the-art facility which will provide full aircraft base maintenance services and will cater to the maintenance needs of regional and global airline customers.

For students and potential employees:

The government’s APSSDC (AP State Skill Development Corporation) will provide funding for vocational training initiatives. It will also enable support systems such as quality assurance, information systems and train-the-trainer academies either directly or through partnerships.

To ensure high skill levels; the government will also encourage Aerospace and Defence firms to adopt Industrial Training Institutes to sponsor and train prospective employees for the sector.

The universities in Andhra Pradesh will tie up with National and International universities; to enhance the research and development culture in the state.

Students undergoing in-plant-training in Aerospace and Defence sector will receive a stipend of up to Rs. 10,000 per month.


All these will result in world class employment opportunities for the students studying in 250 engineering colleges and 200 polytechnic institutions in the state; in addition to generating thousands of indirect jobs and contributing to the overall growth of the state.