How Nara Lokesh’s growth strategy is making Andhra Pradesh an investment hub

When Google announced a $15-billion investment—the largest greenfield foreign direct investment (FDI) India has ever received—to set up its global AI hub in Visakhapatnam on October 14, it sent ripples through India’s policy and technology circles. The decision was remarkable not only for its scale, but also for its speed: Google had made its largest global bet in just 13 months.

The investment is neither a one-off bonanza nor a stroke of luck. A recent Bank of Baroda report shows that Andhra Pradesh has emerged as the preeminent investment destination in India, attracting 25.3 per cent of the total investment commitments made during the first three quarters of the financial year 2025-26. Of the Rs26.6 lakh crore investment commitments Indian states have received, Andhra Pradesh alone accounted for Rs6.73 lakh crore.

This signals a quiet transformation under way in Andhra Pradesh following the return of the Telugu Desam Party to power. Once considered a peripheral destination for investments, the state is now securing new investment commitments across IT and ITeS, data centres, semiconductors, electronics, renewable energy and other high-end areas. Its port city Visakhapatnam is emerging as a hub for large IT companies and large-scale AI hubs.

This turnaround in the investment climate is being attributed to Nara Lokesh, the state’s IT and human resources development minister, who has positioned what he terms as “Speed of Doing Business” (SDB) as the government’s new investment strategy. Breaking away from bureaucratic templates of investment facilitation that were weighed down by red tape and corruption, Lokesh has pushed for faster decision-making and quicker project grounding. Unlike earlier models that relied on layered approvals and dispersed accountability, SDB seeks to expedite timelines by centralising responsibility and maintaining continuous engagement with investors.

State officials say this approach has begun to deliver tangible results. By the end of 2025, the State Investment Promotion Board (SIPB) had approved 256 projects with a total investment commitment of Rs8.75 lakh crore, according to C.M. Saikanth Varma, CEO of the Andhra Pradesh Economic Development Board (APEDB). These investments are expected to generate 8.6 lakh jobs.

Lokesh’s SDB framework is built on five pillars: direct and easy access, adequate incentives, comprehensive infrastructure support, required policy changes and proactive government coordination. Explaining how the model works in practice, Saikanth Varma said the entire investment cycle—from the first discussion to project grounding—is expected to be completed within 12 months. “The process starts with a virtual or in-person meeting with the prospective investor,” he said. “A WhatsApp group with the concerned officials and the minister is then created. Land options are forwarded to the investor within 48 hours. The investor can reach out to the minister directly or through the WhatsApp group for any issue. This direct approach has eliminated the classic problems of lower-level red tape, corruption and indifference.”

The approach appears to have impressed Google’s leadership. After Lokesh met the leadership in San Francisco in August 2024, a Google team flew to Visakhapatnam in October. Lokesh personally received the team and accompanied them to the proposed site. This focused approach helped the state clinch the Google deal. “The team did not expect the minister to accompany them. After visiting Vizag, Google did not even consider other options. By the time of the final announcement, the Google leadership increased the investment commitment from $10 billion (Rs85,000 crore) to $15 billion (Rs1.34 lakh crore),” said Vinayaka Sai Chaitanya, officer on special duty to the IT department.

The state government had also worked on changes to the country’s data centre policy. While Google sought modifications in India’s data centre framework, Lokesh used his political capital to ensure that the Union government addressed long-standing regulatory concerns affecting hyperscale data centres. Ankit Bose, head of AI at Nasscom, said these policy changes signalled that India was serious about competing in the global digital infrastructure race.

“Hyperscale data centres and AI infrastructure require long-term certainty around data governance, power availability, connectivity, security standards and ease of doing business,” he said. “By enabling clearer norms around data localisation, cross-border data flows where appropriate, and compliance aligned with global standards, India makes it easier for companies to deploy advanced AI workloads without legal or regulatory ambiguity.”

The SDB model has also helped Andhra Pradesh attract complex and capital-intensive projects that had stalled elsewhere. ArcelorMittal’s proposed 12-million-tonne steel plant in Odisha, first discussed in 2006, was abandoned in 2013 because of prolonged delays in land allocation. In contrast, Andhra Pradesh helped ArcelorMittal Nippon Steel start its 17.8-million-tonne integrated steel plant project within a year. The government signed an MoU with the steel major at the World Economic Forum in Davos in January 2025 for an investment of Rs1.4 lakh crore. The state allocated 2,200 acres at Rajayyapeta in Anakapalli district by March, and handed over half the land by December.

Incentives have played an important role in attracting large IT companies. Chaitanya recalled how Lokesh persuaded Cognizant CEO Ravi Kumar Singisetti to establish a Visakhapatnam campus during a meeting at Davos in January 2025. “The CEO was not keen because land prices were high. The minister immediately proposed to allocate land at Rs1 per acre. The company was allotted 21.31 acres in the Kapuluppada area by June 21, followed by a temporary 800-seat office by December 12.”

However, the decision to allocate land at Rs1 per acre drew criticism from the opposition YSR Congress Party, which accused the government of favouring select companies. Lokesh responded by invoking Narendra Modi’s 2008 decision as Gujarat chief minister to allot 1,100 acres at Rs1 per acre to Tata Motors for the Nano plant in Sanand—an investment that later transformed Sanand into a major automobile cluster, attracting companies such as Suzuki, Ford Motors and MG Motors, along with extensive supplier networks. Andhra Pradesh officials argue that today’s IT and data centre investments could play a similar ecosystem-building role.

Within the industry, Google’s investment commitment is seen less as a one-off investment than as the beginning of a momentum cycle. “When a global player like Google commits long-term infrastructure and talent in partnership with the Andhra Pradesh government, it lowers risk perceptions for other investors,” said Ankit Bose. “This leads to follow-on investments and allows Visakhapatnam to move beyond a delivery location into a capability and innovation hub.”

Murali Krishna Gannamani, chairman of the Andhra Pradesh chapter of the Confederation of Indian Industry, said speed had become Andhra Pradesh’s competitive differentiator. “On the ground, this shift has translated into faster decision cycles, tighter interdepartmental coordination and a visible push for time-bound clearances,” he said.

Following Google, Digital Connexion—a joint venture of Reliance Industries, Brookfield and Digital Realty—announced an AI data centre campus with an investment of about Rs98,000 crore and nearly 1GW of planned capacity. Lokesh said the state aims to attract 6GW of data centre capacity by 2029 and has already crossed 2.5GW, including projects by Sify and Anant Raj Cloud Services.

While civil society groups have raised concerns about environmental impact and pressure on power and water resources, Chaitanya dismissed the fears citing Loudoun County in Virginia, which has transformed from an agrarian economy into a global data centre hub. Today, the county hosts 60 data centres with more than 6GW of capacity. “When Loudoun, a rural-suburban county, can become the global data centre hub, why can’t we develop Visakhapatnam into one?” he asked.

What ultimately lends weight to the SDB model is not the volume of announcements but the scale and quality of employment being generated. According to the IT department, among the 256 SIPB-approved projects, 29 are IT, IT infrastructure and advanced electronics projects with a total investment of Rs1.49 lakh crore. These projects have deadlines of one to three years, and are expected to generate more than 1.47 lakh jobs in three years.

APEDB estimates that the Google AI Hub alone will create around 6,000 higher-value roles in AI, data engineering and applied research. Reliance’s AI-native campus is expected to generate similar employment, while Sify and Anant Raj Cloud Services together are projected to create 9,100 direct and nearly 12,000 indirect jobs. While data centres are often criticised as capital-intensive but labour-light, the state government argues that their real impact lies in the ecosystems they anchor—spanning cloud services, cybersecurity, operations, facilities management and specialised training.

Cognizant has already started operations at its temporary, 800-seat facility. The full campus is expected to be operational by the end of 2026, and an eventual headcount of 8,000. TCS plans to operationalise its campus with 12,000 employees by 2027. The government is also courting IT infrastructure developers such as Raheja Corp, Sattva Developers and ANSR Global. “We have seen what Raheja Corp achieved in Hyderabad,” Chaitanya said. “These IT infrastructure companies build campuses and use their connections to attract IT companies from across the world.”

Lokesh’s push to attract technology and advanced manufacturing investments is driven by the government’s goal of creating 20 lakh jobs in five years. “This is only the beginning,” Varma said. “I am sure our success will be manifold in the coming years and we will achieve the job target.”

Some early indicators of traction are already visible. A recent ANSR Global study said while companies still preferred Hyderabad for core AI teams, they were increasingly deploying smaller teams in Visakhapatnam because of increasing talent availability and lower costs. In another telling sign, around 5,000 Cognizant employees expressed interest in relocating to Visakhapatnam when the company asked its Indian employees whether they preferred to shift to the port city. Together, these shifts suggest that Andhra Pradesh—once considered a marginal player in the technology economy—is now emerging as a credible start-up state.