Andhra Pradesh plans Investment Protection Act to prevent policy reversals, says Nara Lokesh

Andhra Pradesh plans to introduce an Investment Protection Act to safeguard investments and prevent successive governments from reversing policy commitments. Information Technology Minister Nara Lokesh announced the proposal at the CII Partnership Summit in Visakhapatnam and said the Bill would be tabled in the upcoming Assembly session. The state is also establishing an escrow mechanism for the timely payment of incentives.

Investment protection law 

"Second is our investor protection act. Lot of the investors have asked this to me. We are the state that's now actively considering it. We will enact it," Lokesh said. He further requested Union Minister Piyush Goyal to facilitate policy clearance and its implementation at the national level.

The proposed law seeks to address concerns over political uncertainty, policy continuity, Andhra Pradesh's fiscal position and its ability to honour investment incentives.

Escrow mechanism for incentives

The state is working to resolve delays in incentive payments through an escrow account. Under the proposed arrangement, a portion of the state's tax collections equivalent to the incentives due to investors would be transferred to the account for timely disbursement.

Highlighting the state government's commitment to ensuring timely delivery of incentives to industries without government interference, he said, "We made a promise to the nation and the world that we will create an escrow account to ensure that the incentives are delivered to the industry without any interference of government... I'm really excited and proud to say that we are the first state in India to actually deliver on that promise, so investors have nothing to worry."

Nara Lokesh's invitation to companies

Inviting companies to invest, build factories and move their headquarters to Andhra Pradesh, Lokesh cited the state's coastline, connectivity, talent and business opportunities.

“Do not just build factories, move your headquarters here. My invitation is that invest here and innovate here. Our doors are always open for you,” he said.

Lokesh said Andhra Pradesh's “3S” mantra of speed, stability and services was attracting domestic and global companies. “Once we shake hands with a company, it is our project. We do not keep industry waiting; we ensure commercial production happens,” he said.

He added that four greenfield ports were under construction at Ramayapatnam, Mulapeta, Machilipatnam and Kakinada. These ports are expected to double the state's cargo-handling capacity.

State targets ₹32 trillion in commitments

Lokesh said the state had received investment commitments worth ₹22.6 lakh crore since June 2024. Of these, 73% had been converted into approved projects worth ₹17.2 lakh crore, expected to create 12.7 lakh jobs.

The government plans to secure another ₹9.5 trillion in commitments at the summit, taking the total to around ₹32 trillion. Once implemented, the projects are expected to create 25 lakh jobs.

The state is focusing on moving approved projects towards commercial production and developing industry-specific skills. Naidu cited Google's proposed $15-billion AI data centre and said commercial production was scheduled to begin on August 15, 2028.

Fiscal challenges and priority sectors

Naidu acknowledged the state's fiscal challenges and said his government had reduced borrowing costs from 13% to below 9%. He added that higher economic activity and improved GST collections were expected to strengthen revenue.

The government is targeting investments in manufacturing, food processing, steel, aluminium, automobiles, refining and coal gasification. It is also focusing on artificial intelligence, data centres, quantum technology, space, drones, electronics, robotics and semiconductors.

Shipbuilding and green energy are other priority sectors, with Andhra Pradesh targeting 160 GW of renewable energy capacity.