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INDIA: An Introduction to Corporate/Commercial: Hyderabad

Contributors:

P Basava Rao

G V Yasasvi

Shipra Agrawal

Tatva Legal, Hyderabad Logo

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Hyderabad, known for its food, culture, heritage and royal lineage, has cemented its position as a key player in the Indian economy. This is notably the case in the life sciences, global capability centre (GCC) and IT sectors, with various multinational companies (including various Fortune 500 companies such as Amazon, Microsoft, Google, Novartis, and Bristol Myers Squibb) committing to expand their operations in Hyderabad.

Recent studies indicate that Hyderabad has emerged as one of the fastest-growing cities and also as the city with the best quality of life in India. With more than 355 GCCs employing more than 300,000 professionals, the city accounts for nearly 15% of India’s GCC ecosystem.

Hyderabad’s Consistent Performance in Its Core Competencies

Hyderabad has an unmatched reputation in the sector of life sciences. The city currently contributes a third of the global vaccine output. The city also has the country’s largest and first integrated pharma clusters, Green Pharma City and Genome Valley.

Solidifying Hyderabad’s position as an IT powerhouse, IT/Information Technology Enabled Services (ITeS) sector has defied the national trend of slowed growth, surging by 11.3% in FY 2023‒24 in terms of IT exports. Software technology parks in Hyderabad have the second-highest software exports in India.

Innovation and Growth in Other Sectors

Aerospace and space technology

The city has encouraged aerospace and defence technology companies, with special economic zones such as GMR Aerospace & Industrial Park and the TSIIC Aerospace and Precision Engineering Special Economic Zone in Adibatla.

Investments from Safran, Tata–Boeing, and Collins Aerospace seem to be the start for multiple projects in this space.

Recently, the foreign direct investment policy of India has liberalised investment in the space sector to:

  • 49% automatic route in launch vehicles and associated systems/subsystems and spaceports creation;
  • 74% automatic route in satellite manufacturing/operations/data products, ground segment, and user segment; and
  • 100% automatic route in manufacturing components and systems/subsystems of the foregoing.

The state of Telangana has formulated a spacetech framework in 2022, whereunder the government has agreed to grant incentives and subsidies to spacetech companies under the T-IDEA (Telangana State Industrial Development and Entrepreneur Advancement) Scheme 2014 and enabled collaboration with T-Works (the largest prototyping centre in India) and the National Centre for Additive Manufacturing, Hyderabad, for supporting spacetech companies. The above-mentioned initiatives of the government of Telangana, combined with the recent liberalisation in this sector, have the potential to make Hyderabad a key player in this sector.

Homegrown spacetech companies such as Skyroot Aerospace are evidence of the growth of this sector in Hyderabad. They have recently agreed to set up India’s first integrated rocket facility here.

Electric vehicles and automobiles

The Telangana Electric Vehicle and Energy Storage Policy 2020‒30 has provided multiple benefits for electric vehicle (EV) manufacturing companies in order to attract various investments in this space, including:

  • subsidies on capital investments capped at INR30 crore;
  • State Goods and Services Tax reimbursement for seven years with a cap of INR25 crore;
  • power tariff discounts; and
  • stamp duty and registration charges reimbursements.

Under this policy, battery technology companies are also granted various incentives through the Electronics Manufacturing Policy. In order to promote adoption at all levels, the government has also implemented 100% road tax and registration fee exemptions for the first 200,000 electric two-wheelers, 20,000 three-wheelers, and 5,000 four-wheelers.

The government has planned to set up dedicated manufacturing clusters for EV manufacturers in Telangana Mobility Valley, Vikarabad, Raviral and Maheshwaram.

Companies such as Olectra Greentech, Biliti Electric, and Exicom (an EV charger manufacturer) have committed to launching their manufacturing units in Hyderabad. With an investment of INR1,147 crore, Biliti Electric is constructing the largest electric three-wheeler manufacturing facility in the world, generating employment for 3,000 in the process.

Additionally, the city is preparing its infrastructure for charging. With 102 charge stations, Hyderabad’s largest EV charging hub has been opened in Shamshabad. To further speed up the transition to e-mobility, the Telangana government is establishing DC (direct current) fast-charging stations throughout 28 industrial zones.

With various EV start-ups, including Cygni Energy, GMW, and Hala Mobility, Hyderabad is becoming one of India’s next big EV innovation hubs.

Data centres

Hyderabad is no longer just a tech hub; it is becoming India’s data powerhouse. Hyperscale investments are being drawn to the city; installed capacity is predicted to expand by 200% by 2031.

With its cutting-edge cloud and hyper-converged architecture, the Telangana State Data Centre (TSDC) guarantees smooth digital administration. In the meantime, multinational behemoths such as Microsoft, AWS, and CapitaLand are committing to Hyderabad’s data economy with multibillion-dollar investments. Spread across 50 acres, Microsoft’s data centre is expected to underpin India’s AI-driven digital future.

Telangana’s Data Centre Policy, the first in India, provides infrastructure support, subsidised land, reimbursement of certain fees/costs (eg, internet and building fee), lower renewable power charges, and expedited permits. According to this policy, data centres are considered “critical infrastructure”, guaranteeing continuous power supply and lower operating expenses.

Robotics

Telangana is building the future rather than merely adopting automated solutions. Telangana, the first state in India to introduce a specific Robotics Framework, is promoting a sustainable robotics ecosystem through state-of-the-art facilities, industry co-operation, and research. To promote the adoption of robotics in the fields of consumer robotics, industrial automation, healthcare, and agriculture, the government founded the Telangana Robotics Innovation Centre (TRIC).

Hyderabad will become a destination for robotics businesses as a result of the state’s significant infrastructure investment in Robo Park. This will include testing facilities, co-working spaces, and a central electronics hub for robot components.

Outlook for Hyderabad

Despite the political shifts marked by the 2023 Telangana Legislative Assembly elections and the 2024 Indian general elections, as well as a broader market slowdown, Hyderabad has steadfastly reinforced its core strengths. The city’s unwavering commitment to innovation across emerging sectors ‒ bolstered by a rich talent pool, favourable migration trends, and robust governmental infrastructure and policies ‒ ensures that Hyderabad not only endures but continues to thrive as a dynamic hub of economic and technological advancement.