Even as Tamil Nadu and Karnataka accuse Andhra Pradesh of pursuing a ‘race to the bottom,’ investors are still gravitating towards the State. At the CII Partnership Summit 2025 alone, Andhra Pradesh signed 613 Memoranda of Understanding committing a total investment of ₹13.25 lakh crore.
Some leaders in Karnataka and Tamil Nadu have, in the past, criticised the Chandrababu Naidu-led Andhra Pradesh for offering land at extremely low prices along with other heavy incentives to attract industries. These Ministers contended that Andhra Pradesh has triggered an unhealthy competition among the States by going to great lengths to garner investments, while being unmindful of the negative impact that this is likely to have on the economy.
The spat between Karnataka and Tamil Nadu with Andhra Pradesh began when Google announced a $15 billion investment to set up a hyperscale AI data centre in Visakhapatnam. Karnataka Minister Priyank Kharge dismissed as “baseless” reports that said that Google had chosen Andhra over Karnataka and added that the massive incentive package promised by the Naidu government to Google would result in an economic disaster. In response, Andhra Pradesh IT Minister, Nara Lokesh, said that the Karnataka government should think more about efficiency and fixing its problems instead of mocking Andhra Pradesh.
Mr. Lokesh has been focused on attracting IT companies and global capability centres for which he brought in the LIFT (Land Incentive For Tech hubs) Policy, under which land is being leased out at just 99 paise per acre.
A few days ago, the South Korean footwear manufacturer, Hwaseung, announced that it would establish a non-leather footwear manufacturing unit at Kuppam in Chittoor district by investing nearly ₹900 crore. As Hwaseung had initially shown interest in setting up the unit in Tamil Nadu, State Industries Minister T.R.B. Rajaa commented on the development on social media. He said, “Investment promotion is not a regular everyday game. It’s about balancing the State’s need for certain sectors, jobs that will get created, incentives being given according to the area in which the investment is anchored etc. While some governments have the luxury of huge tracts of arid lands, others have high value land that can’t be casually given away without assessing the outcome of incentives vis-a-vis the value of the jobs being created. We will not join the race to the bottom, of offering unrealistic packages”. Meanwhile, former president of the BJP in Tamil Nadu, K. Annamalai, blamed M.K. Stalin and Mr. Rajaa for projects shifting to Andhra Pradesh.
Responding to these allegations, Mr. Naidu said in a press meet at the CII Summit that States should compete in a federal setup. He said all the investments finalised at the CII Summit were “serious”, driving home the message that the Andhra government is doing its due diligence and not leaving entrepreneurs to fend for themselves after the signing of MoUs. Top officials in the government have been assigned the job of following up on each one of the proposals.
Karan Adani, the MD of Adani Ports & SEZ Ltd., has promised to invest ₹1 lakh crore in Andhra Pradesh in the next 10 years. GMR Group Chairman G. Mallikarjuna Rao has announced his plan to develop an aerocity at the Bhogapuram International Airport, which, he says, will be the world’s biggest aircraft maintenance, repair, and overhaul facility. Anand Mahindra, Chairman of Mahindra and Mahindra Group, called Mr. Naidu “an unstoppable force of nature”. Some captains of Indian industry, present at the CII Summit, said that Mr. Naidu is more a CEO than a Chief Minister. They cited his track record in mobilising marquee investments, which began with bringing Bill Gates to set up the Microsoft India Development Centre in Hyderabad in the late 1990s.
Government sources say 346 MOUs were signed for an investment of approximately ₹4.55 lakh crore during the CII Partnership Summit in 2016; 583 MoUs for ₹8.19 lakh crore worth of investments were signed in 2017; and 537 MoUs for ₹2.05 lakh crore worth of investments were signed in 2018. The government claims to have signed 613 MoUs for a total investment of ₹13.26 lakh crore in 2025.
These statements and developments vindicate the government’s claim of doing its best to attract investments.
Published – November 25, 2025 01:01 am IST