Hyderabad rising: Amazon, other global giants make city business hub

Fatima Hasan

Keep the turmoil caused by Covid-19 and how Telangana is dealing with it aside, there is much coming to the State. The recent announcement of Amazon of opening its second giant Asia Pacific Center with a massive investment of $ 2.77 billion (Rs 20,761 crores) is a good sign of hope post-Covid crisis. It will assist in compensatory recovery in a way. After its research center in Mumbai, this multinational technology giant has chosen Hyderabad as its next city to expand to.  Now, the choice of place is something to reckon with and celebrate for Telanganites. The already known Hitech hub will house Amazon center and that is a good news for innovation and employment opportunities.

In August 2019, Amazon inaugurated its largest company-owned campus worldwide, in Hyderabad, the only one outside the United States. The e-commerce firm houses more than 15,000 employees here out of the over 62,000 members of the India team. The move then was part of Amazon’s expansion plans in India, where retail markets are still, to a large extent, driven by traditional neighbourhood stores

“Over the last 15 years, we have invested significantly in India across 30 office spaces, the AWS (Amazon Web Services) APAC (Asia Pacific) Region in Mumbai, 50 fulfilment centres in 13 States, as well as hundreds of delivery stations and sort centres, creating nearly 200,000 jobs in India,” said Amit Agarwal, senior vice-president and country manager, Amazon India.

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Currently, Amazon has more employees than any other company, both working from home and in office. Moreover, the situation is like asking every other person in Hyderabad as to where he is working, and many will say Amazon. That is what Amazon’s position is in Telangana’s economy. On the other hand, at a time when the State is going to GHMC elections, it will add to KCR and his son and IT minister KTR’s image and invariably draw the voters towards them.

Also Read | Hyderabad has it all: From IKEA’s 1st store in India to Amazon’s largest office in world

Likewise, when we look into the history of Telangana since its creation, many foreign companies opened their operations in the State. In 2016, the Financial Services giant JP Morgan, US technology and consulting firm IBM and financial services company Wells Fargo acquired large high-end office spaces in Telangana’s capital city months after Apple, Google and Amazon chose Hyderabad for their second-largest global development centres. Welspun also launched Rs 1,100 crore manufacturing facility in Telangana.

The Swedish store Ikea, which currently employs 950 people directly and another 1,500 indirectly at its store in Hyderabad, plans to hire 15,000 in the coming years as it expands operations in the country. It also has its own 1,000-seater restaurant, which has both Indian and Swedish cuisines, including biryani and meatballs, at attractive prices, thus creating additional jobs and revenue. Oracle also has its Clouds data center in Hyderabad.

Another significant thing to be noted is the global summits happening after KCR came to power. In 2017, the city hosted the Global Entrepreneurship Summit (GES), which was inaugurated by Prime Minster Narendra Modi. US President Donald Trump‘s daughter and advisor Ivanka Trump led a delegation from her country at the three-day event.

TiE Global Summit 2020, the first virtual global meet of The Indus Entrepreneurs, is to be hosted by TiE Hyderabad from December 8-10,. Based on the theme ‘Entrepreneurship 360’, it will focus on issues faced by entrepreneurs and provide a platform for funding and insights into strategies to grow and scale up business. New start-up ideas, investments in start-ups, pitching tactics to help start-ups attract B2B and B2C businesses and scaling strategies to grow their business manifold will figure prominently in the deliberations. The summit will be attended by global entrepreneurs, investors.  Hyderabad also hosted world design assembly in October.

KTR, the IT brand ambassador

Now in view of all these, our attention is attracted to KTR, the present IT minister. He seeks to project Telangana as IT hub in different countries. KTR went to USA, Europe, Gulf and other countries to tell the potential foreign investors that Telangana has set international standards with its industrial policy -TS-iPASS – and has a good ranking for its Ease of Doing Business (EoDB). He also frequently meets the captains of industry and trade organisations to explore the possibilities of investments in Telangana. He has sought the help of Ambassadors of various countries in his endeavor.

“Telangana has necessary action plan for those who want to invest in India. Though there is diverse opinion about India’s EoDB ranking, the State has set international standards for attracting investments. Telangana is the real investment destination and it is given the EoDB ranking separately,” KT Rama Rao said.  As IT minister, he has secured investments to the State in the last few years and developed the IT Hub of Hyderabad. In his second stint as IT minister, it is to be seen what more he can get to the State and make it self-reliant to usher in Bangaru  or Golden Telangana. It is a fact that in erstwhile Andhra Pradesh, Hitech City and Cyberabad were developed by Chandrababu Naidu and YSR. It is given a boost by KTR.

The FDI sector

The young southern State has 67 notified Special Economic Zones (SEZ). Telangana alone contributes to 10 percent in India’s IT exports and Hyderabad is the 2nd largest contributor to revenues from IT exports in the country. Telangana is the pharmaceutical manufacturing hub in the country, attracting over Rs 10,000 crore in investment in life sciences sector over the last few years. Recently, the Department for Promotion of Industry and Internal Trade [DPIIT], Government of India, estimated that FDI inflow into Telangana totalled US $ 19 billion during the 20 years from April 2000 to March 2020.

Hyderabad is fast catching up with Bengaluru in the IT sector in India. IT exports from Hyderabad during 2019-2020 reached Rs 1,28,807 crores, accounting for 11.58 percent of India’s total IT exports. Hyderabad was ranked as the second best among the top 20 global cities in JLL’s City Momentum Index 2019. Leading IT companies like Facebook, Microsoft, IBM and Google have their significant presence here.

What FDI can get to the State?

If Hyderabad continues with its pace of developing the infrastructure, then more foreign investments will flow into the State and it will indirectly add to the country’s GDP. Also, in a way, the Government will also put in money and create more facilities in the city as it may attract foreign investments. There will be vast employment opportunities just like in Bengaluru. And the Telangana government should further ramp up the incentives package to get more IT/ITES establishments in the city so to make it second Silicon Valley of India.

After Hyderabad , the government should facilitate IT  hubs in other districts and to expand the foreign investments. The government can also develop IT parks, internet parks  and make the city on par with any other cities abroad . Establishment of data centres will likely support Telangana’s digital economy and IT sector in a multi-fold way.

The new AWS Asia Pacific (Hyderabad) Region will enable even more developers, startups, and enterprises as well as government, education, and non-profit organizations to run their applications and serve end-users from data centres located in India. Establishment of data centres in a region will increase the operations of sectors such as e-commerce, public sector, and banking and financial services (BFSI), IT, and more.

The government should also establish We-hubs (women entrepreneur hubs) in other districts, especially in Nizamabad, Warangal and Karimnagar. This, in turn, will attract the women incubators around the world to invest in India. Moreover, the other districts in Telangana should also be developed as world class to create job opportunities for women as well.

Fatima Hasan is a Hyderabad based journalist

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