Telangana – Business Opportunities & Market Entry

Situated in southern India, Telangana emerged as one of India's newest states in 2014, demonstrating pioneering development and innovative policies to encourage business and investments. It consistently ranks among India's top three states for business-friendliness, exemplified by its impressive 'Ease of Doing Business' performance.

Hyderabad, the state capital, has evolved into a tech industry magnet due to its robust infrastructure, policy framework, and skilled workforce. Notably, Telangana achieved IT exports of INR 2.2 lakh crore in the fiscal year 2022-23. Hyderabad's role as a burgeoning hub for pharmaceuticals and life sciences is set for remarkable growth, projected to reach a USD 100 billion industry by 2028 from the current USD 13 billion size.

The state's thriving life sciences ecosystem includes Hyderabad Pharma City (HPC), the world's largest integrated cluster for pharmaceutical industries emphasizing R&D and manufacturing. Initiatives like Genome Valley, Medical Devices Park, and Biopharma-Hub bolster Telangana's significant presence in the pharmaceutical sector, contributing one-third of India's pharmaceutical production and one-fifth of exports.

Telangana excels in horticultural crop production and sustainable sectors like sericulture and fisheries. It houses diverse manufacturing units spanning food processing, non-metallic minerals, plastics, and electrical equipment.

Hyderabad, dubbed the most "Livable City in India" by Mercer for five consecutive years, also holds the top spot for aerospace cost-effectiveness and received the AIPH 'Green City' Award in 2022. The state's business-friendly environment is underscored by the swift project clearance framework established through the Telangana State Industrial Project Approval and Self-certification System (TS-iPASS) Act of 2014, and the introduction of the 'Right to Clearance' furthers efficient industrial clearances.

Telangana's vibrant technology sector and significant contribution to pharmaceuticals make it an alluring destination for investment and business growth. With a population of 35 million and a strategic demographic advantage, Telangana is poised to harness its potential and continue its trajectory of prosperity.

Top Industries

• Information Technology (IT): Telangana, especially Hyderabad, is rapidly growing in the IT sector, attracting investments through Export Oriented Units (EOUs), Software Technology Parks (STPs), and Special Economic Zones (SEZs). The Information Technology Investment Region (ITIR) near Hyderabad aims to create millions of jobs in the next five years.
• Textiles and Apparel: Telangana excels in textiles, with India's largest Textiles Park and significant cotton production. The state's workforce and historical legacy make it a thriving textile hub.
• Life Sciences and Pharmaceutical: Hyderabad, the "Vaccine Capital of the World," contributes over 30% of India's pharmaceutical production. Genome Valley and Biopharma Hub (B-Hub) enhance R&D and manufacturing capabilities, positioning the state as a major pharmaceutical player.
• Electronic Systems: Telangana's Electronics System Design and Manufacturing (ESDM) industry is rapidly growing, attracting global giants and supporting R&D activities. The state's strategic infrastructure, cost-effectiveness, and well-structured ESDM Policy foster growth.
• Food Processing: Telangana leads in turmeric and sweet orange production and has a robust food processing sector, contributing to agricultural value addition. The state's support, subsidies, and policies drive the sector's success.
• Aerospace and Defence: Hyderabad's aerospace sector is recognized globally, attracting major players like Boeing and Safran. The state's infrastructure, skilled workforce, and incentives position it as a hub for aerospace innovation and manufacturing.
• Automobile and Electric Vehicles (EV): Telangana's automobile industry is set to reach USD 300 billion by 2026. The state's proactive approach to EV adoption includes incentives, subsidies, and charging infrastructure development, making it a promising destination for the industry.

Telangana ICT Policy 2021-26

The Telangana Government's inaugural ICT (Information Communication Technology) Policy from 2016 to 2021 yielded significant outcomes by propelling the state's integration of IT and electronics. Building on this success, the second ICT policy introduced in September 2021, spanning 2021 to 2026, aims to manifest a thriving "Golden Telangana." With an ambitious goal of attracting INR 75,000 crore in investments and creating jobs for three lakh individuals, the policy focuses on several strategic objectives. It aims to enhance digital literacy, improve service delivery mechanisms through technology, become a premier start-up and investor destination, and excel in critical sectors like IT, Product, Engineering, and R&D. Key initiatives within the policy include establishing a fully contactless and paperless government, ensuring digital literacy for all households, setting up Digital Telangana Centres in remote areas, and providing AI training to technology graduates. The policy is determined to foster start-ups through a dedicated fund and investment committee, positioning Telangana as a leading start-up hub. Expanding its scope, the policy aspires for substantial growth in the IT/ITeS sector, targeting over INR 3 Lakh crore in IT exports and the creation of 10 Lakh jobs in five years. It extends this agenda to Tier II and III cities, aiming to make them significant IT hubs. The policy focuses on emerging sectors like Electric Vehicles, Battery Storage Systems, Consumer Electronics, Medical Devices, and Automobiles, attracting investments and generating jobs. The establishment of the Telangana Emerging Technologies Corridor emphasizes innovation and research in emerging trends, and the policy advocates ethical use of technologies like AI, ML, and Blockchain. Telangana's homegrown solutions are leveraged to support businesses and other states, and a Smart Cities wing collaborates on creating smart regions. In conclusion, Telangana's comprehensive ICT policy embodies its approach to technological growth, innovation, and sustainable urban development, solidifying its position as a pioneer in utilizing technology for citizen welfare and state advancement.

Telangana Electric Vehicle & Energy Storage Policy 2020-2030

Telangana, a southern Indian state, is actively promoting the electric mobility industry through its 'Electric Vehicle & Energy Storage Policy 2020-2030.' This strategic move aims to establish the state as a prominent hub for electric vehicle manufacturing and a leader in sustainable transportation solutions. The policy encompasses a range of measures to boost electric vehicle adoption and manufacturing.

It offers incentives such as capital subsidies, SGST reimbursement, power tariff discounts, and more to electric vehicle, energy storage system, and component manufacturers. Incentives apply to various vehicle segments including two-wheelers, three-wheelers, four-wheelers, and public transport.

The policy emphasizes road tax waivers, registration charge exemptions, and incentives for charging infrastructure development. Ride-hailing services transitioning to electric vehicles will receive incentives, and battery-operated shuttle services will enhance last-mile connectivity at Hyderabad Metro stations.

Government entities are encouraged to adopt electric vehicles, with preferential procurement outlined in the policy. Manufacturers stand to benefit from capital investment subsidies, SGST reimbursements, power tariff discounts, and more. The state focuses on Electronics Manufacturing Clusters (EMCs) and Industrial Parks dedicated to electric vehicle and energy storage manufacturing.

The policy supports battery and cell manufacturing, along with reusing electric vehicle batteries for stationary energy storage. Charging infrastructure is a priority, with plans for stations every 50 kilometres along key highways. Reserved parking and charging points are designated at transit hubs. The policy outlines a comprehensive approach to environmental sustainability, including an infrastructure model for used electric vehicle batteries. Telangana's Electric Vehicle & Energy Storage Policy reflects its serious commitment to advancing the electric vehicle ecosystem, fostering innovation, economic growth, and environmental well-being.

Telangana Cool Roof Policy 2023-28

The Telangana Cool Roof Policy 2023-28 is designed to combat the urban heat island effect and heat-related stress by promoting the use of cool roofs, which reflect sunlight and reduce indoor heat retention.

Pioneering as the first Indian state to introduce such a policy, Telangana mandates the adoption of cool roofs for government and commercial structures, making compliance essential for occupancy certificates. While adoption is optional for residential buildings with smaller plot areas, the policy sets short-term and long-term goals of covering significant areas with cool roofs.

With a focus on energy savings, the policy envisions reducing air-conditioning demand and power consumption. By implementing cool roofs, Telangana aims to enhance thermal comfort, reduce power usage, and contribute to a more sustainable urban environment.

Best Locations to Set Up Business in Telangana

• Hyderabad: A major economic hub with a well-developed infrastructure and skilled workforce. Ideal for IT, pharmaceuticals, biotechnology, and manufacturing. Areas like HITEC City, Gachibowli, and Financial District are prominent for business activities.
• Ranga Reddy District: Encompasses parts of Hyderabad's urban area and is known for industrial zones, SEZs, and manufacturing clusters. Locations like Ibrahimpatnam and Maheshwaram are favored by industries like electronics, manufacturing, and logistics.
• Medchal-Malkajgiri District: Emerging as a logistics and warehousing hub due to its strategic location near Hyderabad and connectivity to national highways. The ORR enhances accessibility.
• Warangal: Focuses on textiles, engineering, and food processing. The Kakatiya Mega Textile Park is a significant initiative in this region.
• Karimnagar: Rising as an agro-processing hotspot, especially for rice mills, edible oil refineries, and cold storage facilities. Well-connected by road and rail networks.
• Nalgonda: Proximity to Hyderabad and availability of resources like limestone and coal make it suitable for cement, power generation, and mineral-based industries.
• Sangareddy: Growing industrial hub with manufacturing clusters and SEZs, suitable for pharmaceuticals, textiles, and electronics.
• Adilabad: Potential in agro-based industries and forestry-related activities due to rich natural resources.
• Nizamabad: Suitable for food processing and agro-based industries, known for its agricultural output.
• Khammam: Abundant coal reserves and developing transportation network make it suitable for power generation and manufacturing.
• Mahabubnagar: Growing agro-based and food processing hub due to proximity to major markets and agricultural resources.
• Suryapet: Attracted industries like textiles, pharmaceuticals, and manufacturing, aided by its strategic location along the Hyderabad-Warangal highway.
• Jangaon: Known for handloom and textile industries, offers potential for textile-related businesses with a well-established handloom market.
• Mancherial: Strategic location near coal mines led to the development of industries like power generation and cement.
• Kothagudem: Recognized for coal reserves and power generation potential, suitable for industries related to power and energy.
• Bhadrachalam: Known for paper and pulp industries, offering opportunities in the forestry sector.
• Nirmal: Promotes handicrafts and art forms, known for artistic woodwork and hand-painted products.
• Siddipet: Emerging industrial town known for textile and agro-based industries, offering a business-friendly environment and good connectivity.

Business Clusters in Telangana

• HITEC City: Premier IT and business district in Hyderabad, housing IT companies, tech parks, and research centres.
• Pharma City: Upcoming pharmaceutical cluster promoting research, development, and production of pharmaceutical products.
• Fab City: Focuses on electronics manufacturing, providing facilities for electronic design, fabrication, and manufacturing.
• Apparel Park: Dedicated to the textile and apparel industry, offering integrated facilities for processing and manufacturing.
• Medical Devices Park: A proposed cluster for medical device manufacturing and export.
• Food Processing Clusters: Spread across various districts, promoting agro-based industries and value addition.
• Medicine Manufacturing Clusters: Specialized parks for pharmaceutical and medicine manufacturing.
• Jewellery Park: Manufacturing and export-focused cluster for jewellery design and production.
• Automobile and Auto Components Cluster: Concentration of automobile manufacturing and auto component industries.
• Bio and Life Sciences Cluster: Hub for biotechnology, hosting biotech parks and research institutions.
• Aerospace and Defence Park: Attracts aerospace and defence companies for manufacturing and research.
• Textile and Apparel Parks: Multiple clusters promoting textile production, garment manufacturing, and weaving.
• Agri-Business Clusters: Focused on agri-processing and export of agricultural products.
• Industrial Parks: Various locations providing infrastructure for manufacturing and industrial activities.
• Handicrafts and Handlooms Clusters: Known for intricate handcrafted items and traditional textiles.
• MSME Clusters: Supportive platforms for Micro, Small, and Medium Enterprises.
• Logistics and Warehousing Hubs: Emerging for efficient distribution and storage.
• Electronics Manufacturing Clusters: Contribute to the electronics and semiconductor industry.
• Renewable Energy Parks: Promote sustainable energy generation through solar and wind.
• Gems and Jewellery Clusters: Manufacturing centres contributing to the gems and jewellery industry.
• Tourism and Hospitality Clusters: Hubs for travel, hotels, and entertainment businesses.
• Education and Research Hubs: Hyderabad serves as an education and research hub.

Tax Benefits, Incentives & Subsidies

• Capital Investment Subsidy: Subsidies of 15% to 25% of eligible fixed capital investment for industries, varying by district.
• SGST Reimbursement: Potential reimbursement of up to 100% of SGST paid for up to 7 years for eligible units.
• Power Tariff Subsidies: Subsidies on power tariffs, ranging from INR 0.50 to INR 1.00 per unit of electricity consumed.
• Interest Subvention: Interest rate subsidies of around 3% to 5% for eligible industrial projects.
• Land Allotment at Concessional Rates: Concessional land rates, potentially as low as 50% of market value.
• Export Promotion Subsidies: Subsidies based on export value, ranging from 1% to 3% of FOB value.
• Employment Generation Subsidy: Subsidies of INR 1,500 to INR 2000 per employee per month for industries generating employment.
• IT and Electronics Industry Incentives: Reimbursement of land-related expenses, support for skill development, and more.
• Start-up and Innovation Incentives: Funding assistance, cost reimbursement for international exhibitions, and labour law exemptions for start-ups.
• Customized Incentives for Mega Projects: Tailored incentives for projects investing over INR 200 crore or employing over 1,000 persons.

In summary, the market entry report highlights Telangana's position as a thriving and rapidly advancing state, presenting abundant opportunities for businesses aiming to establish their presence in India. The state's advantageous location, robust infrastructure, business-friendly policies, and flourishing industrial clusters make it an appealing destination across various sectors such as technology, manufacturing, and agriculture.

Telangana's emphasis on emerging fields like Information Technology, Electronics, Electric Vehicles, and Aerospace, coupled with its dedication to fostering innovation and research, creates an ideal environment for companies seeking pioneering prospects.

The provision of tax benefits, incentives, and subsidies by the government further enhances the attractiveness for investors and entrepreneurs. Telangana's impressive economic growth, evidenced by its rising GSDP, increasing per capita income, and favourable business milieu, underscores its potential to offer a skilled workforce and a strong consumer base. The state's rich cultural heritage and diverse populace add a distinctive backdrop for businesses aiming to engage with local and global audiences.

Telangana's journey towards becoming an economic powerhouse, guided by strategic policies, visionary leadership, and inclusive growth, presents a promising landscape for market entry. As global market dynamics evolve, considering Telangana as a gateway to India holds the promise of a strategic and rewarding venture.


To know more about the Telangana market, request a Free Detailed Report by submitting a query below.