Andhra Pradesh’s big investment push comes after six years of weak FDI inflows

Andhra Pradesh’s big investment push comes after six years of weak FDI inflows

Andhra Pradesh’s renewed push to court global investors follows a prolonged phase of weak foreign direct investments, with the state drawing only $1.27 billion between October 2019 and June 2025, ranking it 14th among all Indian states and far below its southern peers.

Sharp regional contrast

The most recent quarter underscores the gap clearly. Andhra received just $307 million in the June quarter of 2025, while Karnataka pulled in $10 billion, Tamil Nadu $5.4 billion, and Telangana $2.3 billion. Even smaller states such as Kerala and Haryana posted stronger inflows. Andhra’s share of national FDI has hovered between 0.2 percent and 0.7 percent over the past six years, compared with Karnataka’s 14–28 percent range and Tamil Nadu’s 3.7–10 percent.

Tale of two states

This decline has been persistent rather than cyclical. Since its formation in 2014, Telangana has consistently outpaced Andhra Pradesh across sectors such as IT services, electronics and advanced manufacturing. Tamil Nadu’s rise as a hub for electric vehicles and electronics has further overshadowed Andhra’s investment profile, widening the regional divergence.

The state’s renewed outreach to investors follows years of weak performance, despite its deep coastal advantages and industrial corridors.

Data shows why Andhra is recalibrating its strategy: over the past six years, it has attracted FDI only marginally higher than Jharkhand and Uttar Pradesh, despite possessing substantial structural advantages.

The numbers underline a clear challenge for the state. While southern India has emerged as a magnet for global capital, Andhra Pradesh’s performance remains an outlier—one the government is now attempting to correct after six years of subdued interest from foreign investors.