Hyderabad: Telangana, the country’s newest state, aims to double information technology (IT) exports over the next five years, a period during which it hopes to double direct employment in the sector.

The K. Chandrashekar Rao government hopes to achieve this growth through a new information and communication technology (ICT) policy it unveiled on Monday.

The brand image of Hyderabad took a hit from 2009 to 2014 following a prolonged statehood agitation spearheaded by Rao. The uncertainty over the status of Telangana scared away companies from investing in the state.

Ever since coming to power in June 2014, chief minister Rao’s government has been trying to revive the state’s image, with some success. The world’s top technology multinationals such as Google Inc. and Amazon.com Inc. are building in Hyderabad their biggest campuses outside their home base, the US. In February, taxi aggregator Uber Technologies Inc. opened its first centre of excellence in Asia in the city.

“Lack of agility from key decision makers during the years leading to the formation of Telangana state has resulted in Hyderabad missing out on many opportunities that should have otherwise come its way automatically," information technology minister K.T. Rama Rao remarked. “I am happy to state that the moments of uncertainty and indecisiveness are all behind us now."

On Monday, it released an innovation policy specifically targeted at encouraging startups in the state. The government said it would develop 1 million sq.ft. workspace dedicated to startups over the next five years. About one-third of this space (300,000 sq.ft.) would be developed as second phase of T-Hub that will house 900 start-ups. Telangana plans to partner with 20 global accelerators and incubators to build plug-and-play workspaces in public-private partnership (PPP) mode.

More importantly, given the funding crunch most Hyderabad-based entrepreneurs encounter, the government said it would mobilize a 2,000 crore innovation fund across different sectors and growth stages. It will also set up a 250 crore seed fund.

These measures, the government hopes, would give birth to 5,000 start-ups in the state, including 1,000 in IT products, 400 in the clean-tech space and 300 electronics-based start-ups.

Telangana, which has small-scale electronic system design and manufacturing (ESDM) units in the state is also attempting to give a push to the sector with a dedicated policy targeting the electronics sector. It aims to attract $3 billion in investments in the electronics sector with the potential to generate employment for 150,000 people over the next five years.

The government is developing two electronic manufacturing clusters spread over 600 acres and 310 acres respectively.

“The policy is very sound. We have to see to it that we attract all the global companies and Indian companies to this region," Pankaj Mohindroo, president of Indian Cellular Association said. “I think the southern region will become a mobile manufacturing hub."

Apart from innovation and electronics policies, Telangana also released two separate policies for rural technology centres (to promote IT access in rural areas), and gaming and animation. Telangana will create a 600,000 sq.ft. space dedicated to animation and gaming companies, digital film production houses and music and television studios.

The ICT policy encourages IT companies to consider setting up operations in tier II locations such as Warangal, Karimnagar and Nizamabad by providing “additional benefits", which will be spelt out separately. It also plans to build two incubators in tier-II locations.

“The policy is likely to bring the growth of start-ups on the faster track," Ramesh Loganathan, president of Hyderabad Software Exporters Association said.

The government signed 28 in-principle agreements to mark the policy launch. The Development Bank of Singapore, Southeast Asia’s biggest bank by assets, will set up its first technology development centre in Hyderabad providing employment to 1,500 people.

ValueLabs LLP, an IT services company, said it will invest 1,362 crore to build a 1 million sq.ft. facility employing 10,000 people. Kwality Photonics Pvt. Ltd will set up an LED semiconductor plant to produce 100 million LEDs per day with an investment of 200 crore over the next three years.

Isle LED Park, a special purpose vehicle of LED manufacturers, will invest 500 crore to build LED chip fabrication and LED lamp and luminaries manufacturing units. Mobile charger maker Axiom Telecom will set up a unit to manufacture 6 million mobile phone chargers a month.

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