Andhra Pradesh plays a significant role in the country's overall economic development. The primary sector contributes over 26.65% to Andhra Pradesh's GSDP; secondary sector contributes 22.67%, while tertiary sector accounts for around 50.67% of the state economy. The state is bestowed with huge natural resources; and over 70% of the state's population engages in agriculture

Sectoral Overview

Agro-based Industries
A rich agricultural state, Andhra Pradesh is the fifth largest economy in the country with contribution 7.01% in the national economy. The state is the largest egg producer in India; it is the largest producer of rice in Southern India and second largest producer of horticulture products in India. Known for producing a variety of fruits and flowers, it is also a leading producer of cash crops like tobacco, dry chilli, groundnut, turmeric, oilseeds and sugar. The agricultural economy has supported the growth of allied industries in the areas of agro-processing, cold storage, warehousing, fertilizers and packaging. Agriculture and allied activities sector witnessed a growth of 3.9% in 2005-06 compared to 0.7% in 2004-05.

Manufacturing Industry
Industrial production growth rate was the fastest in the decade. Liquidity in the financial system and robust Indian economy fuelled the growth in manufacturing, which grew by 13.3% in July 2006. Manufacturing sector has also been shining continuously with the increasing demand and manageable inflation even after oil price hike. The sharp rise has been spurred by an 18% increase in production of consumer goods-both durable and non-durable. The capital goods sector, a strong indicator of whether the rates would sustain, has also kept up the momentum at 15.4%. The share of manufacturing sector in Andhra Pradesh's GDP remained stable at around 14.14%. The sector has shown a growth of 23.68% in net sales during April-March 2006 in comparison to the corresponding period of the previous year as per the data set available for manufacturing companies in the state. In terms of first quarter performance for April-June 2006-07, net sales have increased by around 32.08% as compared to the corresponding period previous year.

Pharmaceutical Industry
Pharmaceutical industry mainly includes formulations and bulk drugs. Andhra Pradesh's capital city, Hyderabad, is the hub of pharmaceutical and bulk drugs industry. Hyderabad achieved excellence in the fields of pharmaceuticals, healthcare, biotechnology and IT. The sector has shown a growth of 16.29% in net sales during April-March 2005-06 in comparison to the corresponding period of previous year as per the data set available for pharmaceutical companies in the state. In the first quarter performance for April- June 2006-07, net sales have increased by around 43.02% against the same period previous year.

Information Technology Industry
Andhra Pradesh is the second most desired place for the investors in the IT sector. The state possesses a well built Infrastructure to promote the growth of IT industry. IT/ITES exports from Andhra Pradesh has increased to Rs1, 25,000 million (over USD 3,053 million) in 2005-06 against Rs82, 700 million (over USD 2,020 million) in the previous year. This will increase the state's share in national software exports to around 15% this year as compared to around 11% last year. By 2010, the contribution of the state to software exports of the country would be around 25% of the national projected figure of USD 60 billion.

Textile Industry
Andhra Pradesh has also emerged as a large textile processing centre with over 100 units with a processing capacity of 13m metres of cloth per annum. There is considerable potential to modernize the existing units and to set up new state-of-the-art plants to meet international standards. It is expected that the textile sector in the state is expected to become a US $8 billion industry by 2015 and much of the growth would come from large-scale value addition through weaving, processing and garmenting. With the increasing productivity in cotton and capacity addition in spindlage, Andhra Pradesh has high potential to go up the textile value chain.