The next level of growth in Hyderabad’s IT/ITeS sector is expected to be driven by several key factors with Artificial Intelligence (AI) being the foremost as the city is concentrating on transitioning from a back-office hub to a leader in AI product engineering, said Duddila Sridhar Babu, Telangana Minister for Information Technology, Electronics and Communication, and Industry and Commerce.
In an interview with the Minister set out an ambitious goal of increasing IT exports from $30 billion to $200 billion annually by 2030.
The government is concentrating on attracting more Global Capability Centres (GCCs) to drive further growth in the IT sector while positioning the state at the forefront of the global technology landscape by investing in projects like Global AI City, he said.
Here are excerpts from the interview:
What are the initiatives taken or proposed by the state government for attracting new investments to Telangana?
Duddila Sridhar Babu: To foster a conducive environment for IT investments, the Telangana government has introduced a range of strategic policies and reforms focused on innovation and infrastructure development. Central to our approach is a strong emphasis on capacity building, which includes the establishment of the Global AI City, and a globally standardised Young India Skilling University.
These initiatives aim to nurture talent essential for the growth of key technology areas such as AI, data science, and semiconductor design.
The Global AI City will serve as a premier hub for artificial intelligence, offering state-of-the-art infrastructure, including advanced GPU hardware, extensive data resources for AI model training, and robust industry collaborations, including a Centre of Excellence for AI.
In addition to these initiatives, we are exploring the creation of a sovereign fund supported by public and private investments to drive innovation and address funding needs.
Our strategy also leverages Telangana’s existing strengths in technology, pharmaceuticals, life sciences, defence, and aerospace. To significantly boost growth, we are concentrating on attracting more Global Capability Centres (GCCs), Technology Capabilities Centres (TCCs), and Innovation Centres. The influx of GCCs is anticipated to be a key growth driver for Hyderabad’s IT sector. We are also preparing to announce several major GCCs in the near future.
The previous government projected itself as industry-friendly and claimed to have attracted big-ticket investments. How different will be your approach in promoting industry and business?
Duddila Sridhar Babu: Our approach is distinctly comprehensive and forward-thinking. We are committed to extending the successes of Hyderabad to the entire state of Telangana. Our strategy focuses not only on fostering a conducive environment for large-scale investments, but also on ensuring balanced growth across Tier-2 and Tier-3 cities.
We are placing a strong emphasis on innovation, engineering, and high-end product development. Our goal is to transition Hyderabad from a back-office hub to a leader in cutting-edge technologies such as artificial intelligence (AI), semiconductor design, and product development.
By investing in projects like the 200-acre Global AI City and aiming to increase IT exports from $30 billion to $200 billion annually by 2030, we are positioning Telangana at the forefront of the global technology landscape.
Additionally, our focus on sustainability is integral to our growth strategy. The upcoming AI City will incorporate green IT, hyperscalers, and smart mobility solutions, aligning with global best practices to ensure long-term development.
Where do you see the next level of growth in IT/ITeS sector in Hyderabad coming from?
Duddila Sridhar Babu: Despite a slowdown in growth within the Indian IT/ITeS sector, Telangana has distinguished itself with a notable 11.3 per cent increase in exports for FY24. The sector now employs approximately 946,285 IT professionals, with a net increase of 40,570 jobs in FY24, representing a 4.5 per cent growth in employment.
The next level of growth in Hyderabad’s IT/ITeS sector is expected to be driven by several key factors. Foremost among these is the AI sector, which is projected to reach $2.2 trillion annually by 2030.
Additionally, Hyderabad’s emphasis on sustainable development, exemplified by the upcoming AI City, aligns with the global trends and supports long-term growth. By leveraging these domestic strengths and integrating into the global AI value chain, Hyderabad is well-positioned to capture significant growth opportunities in both national and international IT/ITeS markets.
What are the big-ticket investments in the pipeline?
Duddila Sridhar Babu: We have garnered significant interests from leading global players in technology, pharmaceuticals, life sciences, defence, and aerospace. We anticipate announcing several major partnerships and high-profile collaborations in the near future.
Hyderabad is going to host the global AI summit. What are your plans to give a boost to AI and other emerging technologies?
Duddila Sridhar Babu: On September 5 and 6, Hyderabad will host the world’s largest AI conference, uniting global tech leaders, innovators, investors, startups, R&D professionals, and policymakers. The event will serve as a pivotal platform to address the industry’s pressing challenges and evolving needs. By bringing together the key stakeholders under one roof, the conference will reinforce Hyderabad’s role as a central hub and gateway for artificial intelligence.
With Chandrababu Naidu back as the Chief Minister of Andhra Pradesh, will the development of Amaravati as the state capital and his plans to develop Vizag as an IT hub impact investments to Hyderabad?
Duddila Sridhar Babu: We are committed to collaborative development and shared growth. Hyderabad has already established a robust foundation for IT development, featuring world-class infrastructure and a tech talent pool of nearly one million engineers skilled in cutting-edge products and solutions on a global scale. We are dedicated to accelerating this growth exponentially and are actively working towards achieving our ambitious goals.
Will you encourage expansion of the IT sector outside Cyberabad? What are the plans for expansion?
Duddila Sridhar Babu: Yes, we are firmly committed to encouraging the expansion of the IT sector beyond Cyberabad. Our industrial development strategy is designed to ensure that Hyderabad’s success is replicated across the entire state. As I have emphasised – our industrial development strategy focuses not just on Hyderabad, but the entire Telangana.
We are actively working to create a conducive environment for investors at the district and village levels, aiming for balanced growth across all regions, including Tier-2 and Tier-3 cities. We will put the necessary infrastructure in place to support companies and ensure that they can thrive throughout Telangana.
A new Centre of Excellence (CoE), which will be vertical-based, will drive innovation and research, further advancing our technological capabilities. Our ongoing efforts, led by the CoEs, include comprehensive deep tech training initiatives in AI, ML, and data science under programmes like ‘AI to Grassroots’ and ‘Telangana Future 100′.
These programmes aim to train future leaders from rural areas in niche skill sets essential for tomorrow’s tech landscape.