Quick Summary: Following the cancellation of Karnataka’s Devanahalli Aerospace Park due to prolonged land acquisition challenges, Andhra Pradesh has highlighted its readiness to host aerospace and defence investments. The state’s recently launched Aerospace and Defence Policy 4.0 outlines incentives including capital subsidies, tax reimbursements, and dedicated industrial corridors. With several companies already committing investments, Andhra Pradesh is positioning itself as a potential alternative location for industry expansion. Land acquisition concerns have also emerged in AP, raising questions about implementation and stakeholder engagement.
Full Article: Karnataka’s decision to halt its Devanahalli Aerospace Park project has created a potential opening for other states to attract aerospace and defence investment. The Karnataka government recently cancelled plans to acquire 1,777 acres of land near Bengaluru due to continued resistance from local farmers. This development has drawn attention from Andhra Pradesh, which is offering alternative locations and policy support to interested companies.
Andhra Pradesh’s IT and Industries Minister Nara Lokesh responded to the development by inviting companies to explore opportunities in the state. In a public post, he suggested that aerospace firms consider relocating or expanding into Andhra Pradesh, highlighting available land and supportive measures in place.
Andhra Pradesh’s Aerospace and Defence Policy 4.0, introduced in June 2025, outlines a target of ₹50,000 crore to ₹1 lakh crore in investments and 100,000 direct jobs over the next five years. The policy identifies five key industrial corridors for sector-specific activities: Visakhapatnam–Srikakulam (naval systems), Jaggaiahpet–Donakonda (missile production), Kurnool–Orvakal (drones and UAVs), Lepakshi–Madakasira (aerospace electronics), and Tirupati (research and development).
The policy includes incentives such as capital subsidies ranging from 25% to 45%, 100% SGST reimbursement for five years, and concessional land pricing at 25% of the market rate for anchor investors and 10% for others. It also sets aside ₹100 crore for a technology acquisition fund to support MSMEs and startups. A single-window clearance system has been introduced to streamline approvals and administrative processes.
According to state officials, 23 companies have already committed ₹22,000 crore in investment, generating an estimated 17,000 jobs. Taneja Aerospace and Aviation Ltd. (TAAL) is reportedly exploring the setup of a 12-seater aircraft manufacturing unit and an aviation software development facility in the state. The Lepakshi–Madakasira region has also been suggested as a possible site for new HAL production units. Chief Minister Chandrababu Naidu clarified that Andhra Pradesh is seeking new units and not aiming to shift existing ones from other states.
The state government has also announced that it is working on a separate Space Policy 4.0, aiming to attract ₹25,000 crore in investment in areas like satellite manufacturing and launch vehicle development. This policy would be integrated with aerospace and defence plans, with proposed clusters in Tirupati and Lepakshi.
The Swarnandhra Vision 2047 roadmap, released on July 16, identifies aerospace, defence, electronics, and data technologies as long-term priority sectors. It also mentions planned investments in related infrastructure and skill development as part of broader industrial growth goals.
While Andhra Pradesh has outlined a clear strategy, concerns have been raised by some farmer groups about land acquisition and the need to ensure that legal processes under the Land Acquisition Act are followed. These issues mirror some of the factors that contributed to the cancellation of Karnataka’s Devanahalli project.
Karnataka continues to be a major hub for aerospace manufacturing, contributing around 65% of India’s output. Andhra Pradesh is positioning itself as a location for future expansion rather than direct competition. The state’s focus remains on offering ready land, industry-specific clusters, and defined support mechanisms to attract companies that may now be reconsidering their investment locations.
The current situation presents an opening for Andhra Pradesh to attract aerospace investments, particularly from companies affected by Karnataka’s recent decision. Whether this results in long-term industrial gains will depend on implementation, infrastructure readiness, and how the state manages stakeholder concerns in the coming months.