Can KSEZ Transform Kakinada into India’s Hardware Manufacturing Hub?


IndiaCSR News Network

KAKINADA(AP): If one goes by the Union Finance Minister’s recent Budget speech, the laid-back coastal town of Kakinada is poised to become India’s Electronics Hardware manufacturing hub in the near future. Arun Jaitley specifically announced that Kakinada, its adjoining areas and the port will be developed as the key drivers of economic growth in Andhra Pradesh.

CSR Seminar on CSR Law at RaipurThe Finance Minister explained that Electronics Hardware manufacturing would spearhead the exponential growth envisaged for Kakinada and perhaps the entire Seemandhara region, truncated from the erstwhile Andhra Pradesh and its capital Hyderabad, which was transformed into Cyberabad by Chief Minister N. Chandrababu Naidu. The speculation in business and social circles is – What can happen in Kakinada?

If one goes around Kakinada to make an assessment, all roads would presently lead to the Kakinada Special Economic Zone, better known as Kakinada SEZ or KSEZ. At this moment, KSEZ alone seems to have the potential to transform Kakinada into the Electronics Hardware manufacturing export-import hub rivaling IT software and IT enabled services hub Hyderabad, the capital of Telangana.

The highly professional Bangalore-based infrastructure major, the GMR Group, is driving KSEZ’s current fortunes. The GMR Group is acclaimed for creating world class assets, among which are counted the international airports at Delhi and Hyderabad. Like their counterparts, officials of the GMR Group have been meeting the new central and state leaders to push their projects choked in government pipelines.

Fronted by a seven kilometer long coastline whose draft would be deepened by 22 meters to accommodate very large cargo vessels up to 200,000 DWT, GMR’s planned 2,100 acre greenfield KSEZ Port is nearly 30 kilometers away from the present highly congested Kakinada Port. Unlike the Kakinada Port, with limited berths and without a container handling facility, the KSEZ Port would have the capacity to handle all kinds of cargo and finally become the most modern cargo hub on India’s east coast, with marginal improvements in rail and air connectivity, according to a company source who did not wish to be identified.

Most importantly, at the back-end of the KSEZ Port and contiguous to it, is being developed as a port-based multi-product Special Economic Zone with flexibility to accommodate domestic tariff agglomerations. Spanning nearly 10,500 acres, KSEZ can easily transform Kakinada into the Electronics Hardware manufacturing hub. The present Andhra Pradesh Chief Minister Chandrababu Naidu has the vision, dynamism and experience to make it happen, according to an industry watcher. While GMR-KSEZ officials are tightlipped, how could Kakinada as an Electronics Hardware manufacturing hub appear in Jaitley’s Budget speech without Chandrababu’s word to Prime Minister Narendra Modi, the industry watcher reasoned.

The demand for electronics hardware in India is expected to grow exponentially, say experts. They estimate a demand-supply gap of US$ 300 billion by 2020. It has also been said that if India does not urgently develop electronics hardware manufacturing capacity by the end of the decade, the country would be burning more foreign exchange for import of electronics than for oil.

The eastern coast boasts of rich oil and natural gas deposits. A number of Indian and multinational companies have evinced keen interest in setting up a 15 MMTPA greenfield refinery in the port-based KSEZ.

If the Electronics Manufacturing hub, the refinery and downstream industries come up in KSEZ in the near future as being talked about by people in the know, it would give a tremendous boost to growth, employment opportunities and the overall economy of not only Kakinada but the entire state of Andhra Pradesh.


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