Economy of Hyderabad

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City panorama showing gardens, clean roads and modern office buildings
HITEC City, the hub of information technology companies

The economy of Hyderabad, the capital of Telangana, India, is based on traditional manufacturing, the knowledge sector, and tourism.[1] Starting in the 1990s, the economic pattern of the city changed from a primarily service hub to a more diversified economy,[2] but the service industry remains a major contributor.[3] As of 2006, the largest employers of Hyderabad are the governments of Andhra Pradesh and India, with 113,000 and 85,000 employees, respectively.[4]

Inorbit Mall in the city

Since its inception in 1591, Hyderabad has been a global trade center in multiple areas, including its status as the world's only diamond market. City-based handicrafts were sold in the Middle East and Western countries. During Nizam's rule in the 1930s, industrial growth started with the establishment of a diversified industrial zone, which grew in parallel with traditional manufacturing.

In the 1930s and 1940s, city-based industries started importing technology from the western world for industrial manufacturing. With the introduction of the railways, the city became well connected with the port cities of Bombay (Mumbai), Madras (now Chennai), Calcutta (now Kolkata) and Karachi (now in Pakistan).[5][6] During the 1950s and 1960s, most of the Indian premier public enterprises—BHEL, NMDC, HMT, BEL, IDPL, ECIL, DRDO and HAL—were established in Hyderabad, changing the economical pattern of the city from a traditional manufacturing to a cosmopolitan industrial service sector.[7]

Hyderabad is the capital of Telangana, and the city is the largest contributor to the state's GDP (Gross domestic product) and state tax.[8] In 2011, Hyderabad generated revenues of 700,000 million (US$9.7 billion) and contributed a third of the state's tax revenue.[9] In 2008, the GDP (PPP) was US$60bn, placing the city fourth in India and 93rd in the world.[10][3] Hyderabad and its suburbs house the highest number of special economic zones among India's cities.[11]

In the 1970s, the pharmaceutical and electronic industries were established in the city because of its strategic location in south-central India, for which it is known as the gateway to south-central India.[7][12][13] Since the 1990s, the economic patterns of the city have changed it from a primarily service hub to a more diversified spectrum,[2] with the growth of IT enterprises, and biotech, insurance, and financial institutions, and a strong employment base in ancillary activities such as trade and commerce, transport, storage, communication, real-estate and retail, which employ three times more people than the IT industries.[6] The service industry in this arena remains a dominant, with 90% of the workforce.[13][14] As of 2005, out of every 1000 people of working age, 770 males and 190 females are employed.[15]


Buddha Statue in Hussain Sagar,Hyderabad.

In March 2012, The Indian Union Tourism Ministry declared Hyderabad as the first ever "Best Heritage City of India".[16]

Hyderabad was the World's third best city to visit in 2013, according to Lonely Planet. In 2011 the city was ranked nineteenth in the world by The New York Times in The list of 41 Places to Go in 2011, the only Indian City in the list.[17] Hyderabad is known as the City of Pearls, due to the presence of pearls trading industry—until the 18th century the city was the only global trade center of large diamonds.[18][19] Many traditional and historical bazaars are located in the city.[20][21] The Laad Bazaar and nearby markets have shops that sell pearls, diamonds and other traditional ware and cultural antiques.[20]

Biopharmaceutical industry[edit]

Hyderabad emerged as a pharmaceutical and biotechnology hub and is known as India's pharmaceutical capital and "Genome Valley of India".[22][23] In 2008–2009, Hyderabad's bio-pharmaceuticals exports reached US$3.1 billion.[24] The south—central location of Hyderabad, and the incorporation of Indian Drugs and Pharmaceuticals Limited (IDPL) in 1961 proved to be a foundation of pharmaceutical industry in Hyderabad, later in the 1990s the expansion in the industry took place with the formation of Indian Institute of Chemical Technology, National Institute of Pharmaceutical Education and Research, the Centre for Cellular and Molecular Biology and National Institute of Nutrition along with the regional institutions making Hyderabad the hub of pharmaceutical and biotechnology in India.[25]

The establishment of the public sector in biotechnology and the Genome Valley, 'Fab City' and the 'Nano Technology park' established significant infrastructure in bio-technology. These attributes attracted regional companies and MNCs to set up offices, warehouses, research and development centres in the city.[26] In 2012, the city hosted the Convention on Biological Diversity (2012 COP 11).[27]

The commercial market structure of Hyderabad is defined into 4 sectors—The Central Business Districts (CBD), the sub-central business centres, the neighbourhood business centres and local business centres.[28] Since 2007, The retail industry in Hyderabad is on the rise,[29] and several central business districts are spread across the city.[30][31]

A view of 16th century ruined city of Naya Qila in rare a modern skyline under construction in suburb of city.

Retail and real estate[edit]

The World Bank Group ranked the city as the second best Indian city for doing business in 2009.[32] In 2010, the economic analysis group GaWC ranked Hyderabad in its third tier (Gamma+ World City) of cities by importance.[33] In 2011, DTZ ranked Hyderabad as world's third most affordable office location,[34] while Business Today ranked Hyderabad as the fourth best city to live in India.[35] Hyderabad witnessed a high growth in the real estate business, making it among the top five concentrated cities for housing in India.[36] In 2007–08, the city's prime residential areas of Banjara Hills and Jubilee Hills reached the highest growth percentage in India. The Economic Times evaluated Banjara Hills to be worth US$20.7 billion.[37]

Information technology[edit]

Microsoft R&D Campus,Hyderabad
Oracle Campus,HITEC City,Hyderabad

Hyderabad is among the global centres of information technology for which it is known as Cyberabad (Cyber City).[38][39] The city's IT sector includes the IT-enabled services, business process outsourcing, entertainment industries,[39] and Financial services.[40] During 2008–09, Hyderabad's IT exports reached US$ 4.7 billion,[24] and 22% of the NASSCOM's total membership is from Hyderabad.[11] The development of a township with related technological infrastructure called HITEC City prompted global and particularly US—based companies to establish their operations in Hyderabad.[38] The Deloitte, Franklin Templeton Investments, GE Capital, Accenture, HSBC, Bank of America, ABN Amro, S&P Capital IQ, Ernst & Young, KPMG, Capgemini, Genpact are some of the financial services companies with offices in the city.[40]

The major multinational IT firms located in Hyderabad are Microsoft (the largest R&D campus outside the US), Google, Thoughtworks, CA Technologies,, IBM, Motorola, Samsung, Agilent, Automatic Data Processing, Oracle Corporation, Yahoo!, Dell, Texas Instruments, Hewlett-Packard, Virtusa, Kewill, Facebook and others.[40][41] The major Indian firms with development centres in the city are Tech Mahindra, Infosys, Wipro, Cognizant, Tata Consultancy Services, Polaris, and others.[40] The main areas where such IT and ITeS campuses have been set up are Madhapur, Gachibowli, Kondapur and Uppal.[42] Apple announced the opening of a new office in Hyderabad that will focus on development of its Maps product.[43] Hyderabad was conferred the title the 'software training capital of India-and rightly so. The role played by the city of Hyderabad to train the number of software professionals, who get sent to different parts of the country and around the world, have enabled the boom in the software industry in India that we see today. Since 1990, Hyderabad has seen an upward surge in the number of multinationals and tertiary sector services, making the city a tough one to beat, in terms of IT advancement. Many domestic firms and multinational companies have established their headquarters in this city and have contributed to the steady growth of the tertiary sector in Andhra Pradesh. The boom in the software industry has even led to the growth of Hyderabad's very own IT parks such as HITEC City and Mindspace Cyberabad. If you want to know more about the thriving IT industry in Hyderabad, read on.

Types Of IT Companies There are three main types of IT companies in Hyderabad. They are IT companies, ITES companies and Computer Hardware companies. The IT companies handle the various software development programs for the multiple industrial sectors in Hyderabad and the rest of the world. In this category, Hyderabad has a colossal number of domestic and international companies to its credit. This segment of the Hyderabad IT industry earns the maximum export revenue for the Indian government. The ITES companies (IT enabled services) deal largely with BPO companies and support services. This segment also forms a major chunk of the IT industry in Hyderabad. The third and the final segment of IT companies are the computer hardware companies. Several brands of computer hardware companies provide support to multinational companies and domestic ones and are in the bid to expand their network to the rest of the country.

Major IT Companies Some of the major IT companies in Hyderabad are: Google Inc. IBM Microsoft Infosys SAP Tata Consultancy Services Amazon Inc. Hewlett-Packard Sony Toshiba Nokia Ericson Texas Instruments Ogilvy And Mather Dell Deloitte Governmental Support The government has done much to support the development and the growth of the IT industry in Hyderabad. Many multinational companies receive invitations from the Government of Andhra Pradesh and India to come and set up their headquarters/ base for operations in the country. The government also provides support in the land allocations aspect in the event of building an IT park or establishing a single office. Many companies benefited from the building of the first IT Park in the city, HITEC City. Apart from land allocation aid, the government also helps domestic and international companies avail state-of-the-art facilities with modern offices and international styled architecture.

Hyderabad provides an encouraging environment, getting various IT companies to establish their bases, grow and network with one another across the world. One of the fastest growing economies owing to the IT sector, Hyderabad is home to some of the biggest multinational companies, BPO's and lavish IT parks.

The future of the IT industry in Hyderabad promises growth and success stories along with expansion and further technological development. It is said that Hyderabad is also known as the second Silicon Valley of India, after Bangalore. Widespread investments, digital infrastructures and training centers are aiding the growth of the number of IT parks around the city. The city has also been selected to house India's first silicon developing facility known as Fab City making Hyderabad truly India's high-tech city.

Hyderabad has several congenial factors to further fuel growth in IT sector. It has earned global reputation as a cosmopolitan city known for its assimilative cultural ethos. Firm foundation, futuristic policy, strategic advantages associated with the city etc., would significantly contribute to the enhancement and enrichment of the IT landscape of Hyderabad

The information and communication technology (ICT) has transformed the image of Hyderabad from a manufacturing and research hub to that of a global services destination. The city could attract many Indian and foreign IT majors thus integrating itself firmly with Silicon Valley . The National Association of Software and Services Companies (NASSCOM) estimates that for every one direct employment, this sector provides indirect employment to four people.

The consumption patterns of middle class youth employed in this sector opens up new avenues of economic opportunities in the city. The brand image this sector brings to the city outweighs the low level of employment elasticity in this knowledge economy, when compared to the bricks and mortar economy. However, it is wrong to assume that IT and IT-Enabled Sectors (ITES) sectors provide employment to elite only. Though the urban and English educated have an edge over others, many lower-middle-class families coming from small towns of Telangana did find their lives significantly impacted by the employment in this sector.

As the Chief Minister, K.Chandrashekar Rao, said while unveiling the new ICT policy, IT has the potential to usher in rapid progress. Hyderabad is already a magnet which attracts the best in the world. The new ICT policy intends to embellish it even further to make it stand out as the most preferred destination for the IT companies.

The IT sector did have a significant impact on the Indian economy in the last two decades. There has been a phenomenal growth in the IT and the ITES sectors. Revenues earned through them contribute close to 9.5 percent of India’s GDP of which over 65 percent is earned through foreign exchange. The sector also provides employment to more than 35 lakh professionals directly and one crore people indirectly, making it one of the largest and most attractive private sector employers.

The IT-BPM sector has demonstrated flexibility and as per the Economic Survey 2015-16, it is expected to touch an estimated share of 9.5% of GDP and more than 45% in total services exports in 2015-16. The benefits of IT revolution have started percolating to the hinterland. The Minister for IT, Government of Telangana, K T Rama Rao, said during the launch of the new ICT policy that close to 50 percent of jobs created in this sector have gone to young men and women from the smaller towns and mofussil areas.

Hyderabad has several congenial factors to further fuel growth in IT sector. It has earned global reputation as a cosmopolitan city known for its assimilative cultural ethos. When the IT sector was opening up in the country in mid-90s, Hyderabad became a natural choice for the IT majors. It has become a critical national and international IT hub. The presence of leading national research and academic instituitions has provided the right eco system for the growth of this knowledge-intensive sector.

Despite challenges in employability of graduates churned out from certain colleges, which resemble as what the Chief Minister himself described as poultry farms, the city offers the industry with a vast pool of skilled man power vital for the growth of any sector. Hyderabad has global connectivity. The presence of the world’s major IT companies like Microsoft, Google, Facebook, IBM etc., provide the city a firm launch pad for further momentum in this highly competitive sector.

A large presence of Telugu disapora who have an emotional connect with the sprawling city provide the state with avenues for transmission of knowledge through expatriate nationals. According to the Socio Economic Outlook 2016, Government of Telangana, “ICT industry in Telangana State consists of Business Processing Organisations and Knowledge Processing Organisations, providing professional services across the globe. State’s ICT service is mainly oriented towards foreign markets and contributes largely to India’s IT exports.”

Over a period of time, Hyderabad has become a premier global destination for IT and ITES industry of India, next only to Bengaluru. The IT industry in the State has grown by leaps and bounds in recent years. There are 1,300 IT units employing as many as 3.7 lakh professionals in the State, with an annual export turnover of Rs 68,258 crore in 2014-15.

However, in the wake of global economic slowdown, resulting in weak global demand for software exports, companies have adopted various methods such as diversification of market base towards emerging and developing countries, product diversification and cost reduction etc., explains the Socio Economic Outlook, 2016.

Hyderabad accounts for nearly 11 per cent of national IT exports. The sector registered an annual growth rate of 16 per cent in 2014-15 . This is 3 per cent higher than national average growth. The new ICT policy has set ambitious targets. The policy statement aims at making Hyderabad the national leader in terms of IT exports and to leverage on the strong infrastructure that exists to attract more investments.

The objectives of the policy include: To double the value of current Rs 68,232 crore IT exports in Telangana in five years; to double the current employment of four lakhs in five years; and to establish three tier-2 cities as IT hubs in five years. While Hyderabad will remain the centre of product development and R&D activities, companies, particularly ITES companies, will also be encouraged to locate themselves in tier-2 cities like Warangal, Karimnagar, Nizamabad etc., states the new ICT policy.

Hyderabad already has the premier electronics companies in the public sector. The Electronics Corporation of India Limited (ECIL), Bharat Electronics Limited (BEL) besides defence electronics units provided the much needed industrial base in the city even before the emergence of IT infrastructure. In fact, a large number of semi-skilled persons can get employment in this sector rather than in IT and ITES.

The sub policy on electronics plans to make Hyderabad a global hub for electronics. Two electronics manufacturing clusters will be set up in the suburbs of Hyderabad. These will be dedicated clusters for electronics manufacturing. India home to a new breed of young startups has clearly evolved to become the third largest base of technology startups in the world. Within the last one year, the number of startups grew by 40%, creating around 80,000 jobs in 2015. This emerging sector is set to get a fillip with the Startup India programme, says the Economic Survey, Government of India, 2015-16.

The new ICT policy states that the Government of Telangana aims to build a booming startup eco system that will unleash the entrepreneurial spirits amongst the youth and in turn aid in job and wealth creation. It aims to bring the entire startup community in the state under one umbrella, T-Hub, located in Hyderabad.

The global gaming and animation market is expected to grow to $240 billion in the next three years. A significant portion of this work is outsourced to India. Hyderabad is already home to a number of gaming and animation companies. Many of these companies have made a mark in national and global market. The new policy aims to give a further push to it. The gaming and animation sector will further enhance the global brand image for Hyderabad, besides yielding revenue.

Firm foundation, futuristic policy, strategic advantages associated with the city etc., would significantly contribute to the enhancement and enrichment of the IT landscape of Hyderabad. Government, industry, academia etc. should be partners in this Brand Hyderabad mega venture. HYDERABAD: After over three years of uncertainty, the Information Technology industry in Hyderabad heaved a sigh of relief with the announcement by the Congress to carve out a separate Telangana state out of Andhra Pradesh.

The announcement has cleared the air over the future of Hyderabad, a major IT destination in the country.

This fast growing metropolis will be the joint capital of Telangana and Andhra Pradesh for 10 years. Andhra Pradesh is expected to build its own capital within that period.

The IT industry welcomed the decision, saying it brought an end to uncertainty and brightened the prospects of the city attracting new investments.

The industry with software exports to the tune of Rs.40,000 crore was worried over frequent shutdowns and spells of violent protests for separate Telangana state. This had taken sheen off brand Hyderabad.

"I believe the decision has brought in a positive sentiment as the uncertainty surrounding the matter has finally been resolved," said V. Laxmikanth, managing director, Broadridge India.

"Hyderabad, known for its large pool of talented IT professionals and as a base for leading MNCs, is expected to reclaim its reputation of being the destination of choice for businesses across industries," he said.

BVR Mohan Reddy, chairman and managing director, Infotech Enterprises, said while he was not for or against the decision, he was anxiously looking forward for this decisive movement.

"The separation problem has been voiced for the last 50 years but in the last three years some of these agitations have been (hurdles) for progress of the state. The uncertainty has slowed down the growth. That is now past."

Suman Reddy, vice president and managing director, Pegasystems India, hoped the development will bring back stability in the business environment of the city.

"Growth and expansion from the perspective of IT MNCs investing in the state had been stalled/relatively slow due to this issue, which hopefully will resume after the decision is announced," he said.

Hyderabad, which emerged on the world IT map only in the mid-1990s, is home to over 1,000 IT and ITeS companies including global majors like Microsoft, Google, Facebook, Dell, Oracle and Amazon.

The IT and ITes sector provides nearly five lakh jobs. Bengaluru may have hogged the startup spotlight in recent years, but Hyderabad has been working towards building one of the strongest foundations for a powerful startup ecosystem and hub in India. In fact, there was a time when it was believed that Hyderabad would give Bengaluru a tough competition.

At the peak of its IT revolution, Hyderabad was home to biggies like Microsoft, Facebook, and Google. A common anecdote of the time was how then Chief Minister, Chandrababu Naidu, managed a meeting Bill Gates and convinced him to start Microsoft’s Research Centre out of Hyderabad. However, political issues like the Telangana movement put a halt to Hyderabad’s march towards becoming the predominant startup hub.

A group of government officials, investors, incubators and startups in Hyderabad are now attempting to make up for lost time. The results are already visible. Global e-commerce major Amazon chose the city as the home for its largest warehouse, which is capable of storing about two million products. Uber too is setting up a state-of-the art facility in Hyderabad, which will eventually be its largest international office.

Young and upcoming startups are also getting a boost. YourStory currently tracks 1,800 startups in Hyderabad.

Hyd_Ecosystem_Cover Image created by Aditya Ranade Funding galore Before we get into the different ingredients, that make a truly powerful Hyderabadi startup biryani, here is a sneak peek into the funding details in the city:

Hyderabad_Ecosystem_1_Yourstory Image created by Aditya Ranade Funding trend in the past five years in Hyderabad: Hyderabad_Ecosystem_2_Yourstory Image created by Aditya Ranade The Hyderabad Startups Apart from mobile-app-focussed startups like CanvasFlip, AppVirality and Zify, the health and wellness sector appears to be dominating the scene in terms of funding with the likes of ManageMySpa, Zapluk, MapMyGenome, Truweight and Healthians getting investments. Others include Pricejugaad and MySmartPrice.

Hyderabad_Ecosystem_4_Yourstory Image Created by Aditya Ranade In September last year, a NASSCOM report showed that close to eight percent of the startup activity in India is happening in Hyderabad. Sanjay Enishetty, 50K ventures, says that by 2018, the Hyderabad Startup Ecosystem will possibly be bigger than the Bengaluru Startup Ecosystem.

Speaking of the quality and kind of startups that are seen in Hyderabad, Sateesh says that like most startups across India, those in Hyderabad are also jumping on the hyperlocal and e-commerce bandwagon.

However, over the past few years, the kind of startups that have grown in Hyderabad are in the enterprise software, commerce, and healthcare sectors.

The entrepreneurs themselves Along with the growing number of entrepreneurs and people starting up, the quality of people starting up is also improving. Ramesh says that the quality of entrepreneurship in the city has seen a significant improvement in the past year.

“In Hyderabad, there is this strong trend of people with solid corporate experience quitting their jobs and starting up. This in itself helps improve the quality of entrepreneurship. The entrepreneurs have an understanding of the different elements and aspects of a business. They aren’t necessarily knowledgeable on everything, but they understand that there are different aspects,” says Tom Thomas, COO, CIE Hyderabad. However, those who have seen Hyderabad grow as a startup hub say that quality of entrepreneurs has always been high. “You look at the top names in the healthcare and pharmaceutical world. The entrepreneurs are from Hyderabad. People from Hyderabad have always been great at entrepreneurship and setting up businesses,” says Sateesh Andra, Managing Director, Endiya Partners.

So what are the key ingredients that make Hyderabad a great startup ecosystem?

I. The infrastructure For any startup to thrive, apart from the product, you need the right team and infrastructure in place. And Hyderabad has ensured that the city has a strong infrastructural base. In fact, the infrastructural foundation of the city was laid in the early 2000s.

“Hyderabad today can be considered amongst the cheapest metros in the country. The seeds of a strong infrastructural base were sown early on, and now we are just adding to it,” says Ramesh Loganathan, VP Products and Centre head, Progress Software, and one of the city’s most sought-after mentors and advisors. Building an incubation ecosystem – T-Hub There possibly has not been a better time for startups in India, with the Startup India initiative and more recent announcement. But with Hyderabad specifically, there has been a surge in government support. Recently, the youngest state in the country, Telangana made headlines with the announcement of its largest incubation centre in India – T-Hub.

It is believed to be one of the most powerful and ambitious projects that has been taken up by the government. K T Rama Rao, who was an IT professional for six years and is now the IT Minister of Telangana, has said that the T-Hub is not for Telangana techies alone, but is also meant to attract talent from across the country.

The Telangana government is also in the process of setting up two more incubation centres in the gaming and animation and aerospace sectors soon Located in the IIIT campus, T-Hub is called ‘the incubator of incubators’ by mentors and incubator heads in Hyderabad.

Explaining this, Ajit Raj of T-Hub says that the aim of the incubation centre is to create a complete ecosystem for startups. “The main idea here is to build a support system that is so strong that startups don’t find it difficult to get advice, mentorship, funding and infrastructure. For that, we not only have our own incubation centre, but also have tie ups with the likes of NASSCOM, CIE and others to help incubate their startups as well,” adds Ajit. Ratan Tata, when he inaugurated the T-Hub, said, “Walking around the T-Hub building made me realise that we are entering into a new phase of entrepreneurship, innovation and enterprise in India. It is enterprise that is non-traditional and focussed on innovation of the mind. This was what elevated the US in the 80s into a new world of technology and hi-tech. It changed the way we lived. A facility like T-Hub gives you a sneak-peek into the new India of tomorrow.”

Aditya Vuchi, Founder, Zippr, a Hyderabad-based tech startup, says it has never been easier to start up in Telangana. He is hoping for a collaboration between Central and State departments.

The T-Hub, on Monday, also announced its incubation programme LAB/32. In this programme a few handpicked startups will not only be able to access top mentors in the industry but also will be given the opportunity to pitch to VCs and angel investors across the globe. Some of the mentors include Gautham Seshadri of Aarin Capital and Keerti Melkote of Aruba Networks.

The academic incubation centres “When I was working at the CIE there were close to 11 startups in the centre, and close to a year later, when I was leaving CIE, there were close of 70 startups in the incubation centre,” says Manoj Surya, Founder of Zenty. Apart from CIE in IIIT, the other incubation centres are at ISB and BITS Pilani.

Praveen Dorna, Co-Founder Startup Byte and the Head Incubation manager at CIE says that the kind of entrepreneurs at CIE aren’t very different from entrepreneurs elsewhere, but the idea is that the incubation centre provides a solid base for founders who are looking to build great products and need support of infrastructure, mentors and advisors.

Co-working spaces Raghuveer Kovuru, Startup Coach and Community Animator at Co.Lab.Orate says that while startup activity in Hyderabad cannot be compared to Bengaluru, the city is nevertheless working slowly and steadily to become a strong ecosystem base.

“The idea of a co-working space is to build community and help startups spend less on office spaces. They focus on building the product and talent base,” says Raghuveer. He adds that there is more collaboration and networking in a co-working space. In most co-working spaces, there are events and talks on funding, growth, and key advice that any first-time entrepreneur would seek.

II. People Startups and startup ecosystems are defined by the kind of people who form the startups or the ecosystem. In Hyderabad, with government support and infrastructural elements in place, it is now up to the entrepreneurs to build and develop this ecosystem.

Availability of talent The growing number of top education institutes in the city not only ensures great incubation centres, but also that startups get the much-needed tech talent and people. Ramesh says that after Bengaluru, Hyderabad possibly has the most thriving talent pool across different sectors. The city has seen growth and development across different verticals, ensuring that the talent has grown to an exponential level in the city.

An interlinked network Looking at the growing number of entrepreneurs and startups in Hyderabad, key advisors, mentors, incubator heads and investors decided to get together and help entrepreneurs in the city. The idea was simple; it was focussed on helping the startups leverage the experience and understanding of mentors and investors.

Today, Hyderabad is among the most accessible and connected ecosystems in the country. “Everyone is open to talk to and the kind of advice one gets is very open and constructive. This is because, everyone wants the ecosystem to grow and thrive,” adds Manoj.

Sanjay says that when 50k Ventures first started in 2007-08, there weren’t many people to look up to or turn towards for advice. But today, he says that the ecosystem is working as one strong unit helping everyone grow and thrive in their own way.

Stitching the loose ends While there are different ingredients in place, the Hyderabad startup ecosystem still needs to see the kind of funding that Bengaluru sees. While interconnected and with decent infrastructure in place, the city lost a good part of a year in political conflicts.

Even if there is decent technical skill and talent in the city, startups in Hyderabad will need to compete with Bengaluru-based startups that have deeper pockets. “We have different ingredients in place, we now need to start attracting people from different cities,” adds Tom.

While it might seem that every metro in the country is aiming to be a startup hub, Hyderabad is truly working on different aspects to achieve that end goal. “Everyone talks about the infrastructure, talent and growth opportunity, but it is about using the different elements and truly building a powerful startup ecosystem, and Hyderabad is working tirelessly as one unit towards that end,” says Ramesh.Back in the mid-1990s in the United States, when the Internet boom was just starting, the East was also poised to get in on the technological wagon. Hyderabad, an ancient city borne of mixed traditions and cultures, started the slow transformation into a cyber-city that, today, has become one of India’s premiere information technology and IT-enabled service hubs. Hyderabad has also become the country’s center for scientific and technological development not only in IT infrastructure but also in pharmaceutical and science research industries. To say that Hyderabad is the financial and technological capital of the state of Telangana is not a rumour; it is a fact supported annually by the many international technological firms that call the city their home.

After Bangalore, Hyderabad has been dubbed as the Silicon Valley of India, mainly in light of the fact that more and more firms have set up their operations there. Starting in the 1990s, software companies, business process outsourcing (BPO) firms, call centers, and other technological services were set up, making it the center for all call center operations, technological development, and KPOs in all of India. There are several reasons why these large multinational information technology giants have chosen Hyderabad as one of their base of operations in South Asia: for one, the untapped intellectual talent in the region is immense, especially in the field of technology and mathematics. Another reason is that labour is especially cheap and abundant. Most companies will be able to hire more workers at almost half the cost when they’re in the West. India (and, in extension, Hyderabad) also have labour standards that are pretty much more reasonable and relaxed, as well as a working environment that is conducive to work. The state’s support for IT sectors is very strong. In Hyderabad, the government’s industrial policy for the IT, Biotechnology, and Pharmaceutical sectors is very liberal and high priority is given to its development especially since it plays a vital role in sustainable economic growth. Extensive investments in the city’s digital infrastructure are also being made to promote construction and setting up of several campuses to house arrays of companies investing in the city’s IT growth. Foremost of these is the development of HITEC City which stands for Hyderabad Information Technology Engineering Consultancy City. It is a major technology township that has become the center of information technology industry in Hyderabad. Composed of several campuses and phases, HITEC City has residential areas where the IT professionals can live, as well as convention centers and malls. Several multinational IT giants have made the City their base of operations in India, including Accenture, Oracle, Verizon, and IBM. Since Hyderabad offers a stable political climate as well as an efficient and good IT infrastructure, it is safe to assume that it will become a core player in Asia in terms of being information technology hub. The conditions have made Hyderabad a prime destination for offshoring services, making it an alluring destination for many IT companies worldwide. Telangana Information Technology and Panchayat Raj Minister K.T. Rama Rao has said that the aim of his Government was to drag the preeminent position of Bengaluru in software industry and bring it to Hyderabad.

Noting that the `first mover' advantage in the industry was lost to Bengaluru due to failures of previous governments, Mr. Rao said that the present regime here was focussed on making Hyderabad number one destination of the country in IT sector.

He said at a meet-the-press programme organised by Press Club, Hyderabad, that a huge expansion of IT sector was proposed in Hyderabad whose exports in 2014 were of the order of Rs.57,000 crore, next only to Bengaluru. The goal was to increase exports to Rs.1.20 lakh in collaboration with major companies abroad. The Government would also tap the potential of low-cost and high-value human resource available in Hyderabad by encouraging them to set up startups.

The Telangana Government will start a technology incubator within a fortnight when Chief Minister K. Chandrasekhar Rao will spell out the incentives.

The Minister maintained that the biggest takeaway from his recent US tour was that he succeeded in building confidence of IT industry in Hyderabad as an emerging market. The Government established direct contact with honchos in Silicon Valley. They agreed to participate in IT Hub to be set up in Hyderabad. A separate zone for micro, small and medium enterprises will also be set up over seven acres at Gachibowli.

Information Technology Investment Region (ITIR)[edit]

The Information Technology Investment Region (ITIR), Hyderabad is an upcoming IT investment region jointly being developed by Government of India and Government of Telangana.[44] The Union government has given in-principle approval on Sept 8th, 2012 for the Information Technology Investment Region (ITIR) for development of self-contained integrated knowledge clusters for growth of IT and electronic hardware manufacturing in 50,000 acres in and around Hyderabad.[45] The project which is modeled along the lines of Shenzhen SEZ in China, is aimed at attracting an investment of Rs 2.19 trillion ($44 billion) in the IT, ITES and electronics sectors and providing direct employment to 1.5 million people.

Under the mega project, special economic zones (SEZs), industrial parks, free trade zones, warehousing zones and export-oriented units would come up in three corridors around the city which includes the areas Madhapur, Gachibowli, Uppal, Mamidipalli, Raviryal, Adibatla and Maheswaram, and Pocharam. The Government proposed to develop the infrastructure for ITIR at an estimated cost of over Rs 2.19 lakh crore.

On September 20, 2013 the Central Government gave the official approval for the ITIR project[46]

In April 2016, the Central Government informed Telangana state Government that it would revise the entire plan. This, according to sources, may lead to the delay in the estimated investments of Rs 3 lakh crore and creation of nearly 60 lakh jobs. No explanation given on why the need for revise plan.


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