Google, ArcelorMittal deals put Andhra Pradesh at centre of India’s investment race

A senior leader from the ruling coalition is emerging as a key figure for multinationals seeking to invest in India, using political access and a streamlined approvals system to push major projects into Andhra Pradesh.

Nara Lokesh, a 42-year-old Stanford MBA and minister in Andhra Pradesh, said he has secured $120 billion in firm investment commitments in the last 16 months for the state — higher than any other Indian state or union territory.

Google is setting up a $15 billion data centre in Andhra Pradesh, which Lokesh said will be its biggest investment in India. He added that the ArcelorMittal Nippon Steel joint venture has pledged nearly $17 billion for a 17.8-million-tonne steel facility. ArcelorMittal Nippon confirmed to Reuters it remains committed to the investment, which will be rolled out in phases.

“We don’t go into a meeting where we just do this dog and pony show, exchange memorandums of understanding, take a nice picture and then forget. Now every meeting has an outcome,” said Lokesh, whose Telugu Desam Party (TDP) rules Andhra Pradesh and provides key parliamentary support for Prime Minister Narendra Modi’s coalition.

“I want to move from the ease of doing business to the speed of doing business.”

Modi has been prime minister since 2014 but his Bharatiya Janata Party won 240 seats in the 543-member parliament in last year’s election, making the TDP crucial for government formation.

India has the highest GDP growth rate among major economies at about 6.5%, but investors have frequently cited bureaucracy, regulation, and complex tax and legal systems as barriers. Some investors say Lokesh and his father, Chief Minister Chandrababu Naidu, are presenting a different model.

“Your mantra of ‘Speed of Doing Business’ is not just a slogan, it is a lived experience for investors like us,” Karan Adani of the Adani Group said at a recent conference.

The Adani Group has already invested nearly $5 billion in Andhra Pradesh and pledged a further $12 billion over the next decade across ports, cement, data centres and energy.

“It definitely helps to be part of the ruling coalition… because we have a voice at the table,” Lokesh told Reuters at his father’s residence in Amaravati. “But at the same time, they are also looking for states that can run fast.”

Lokesh said he now aims for up to $1 trillion in firm investment commitments for Andhra Pradesh before the 2029 national and state elections.

THE GOOGLE DEAL

Lokesh, who oversees human resources development and electronics, said he learned in October 2024 that Google was scouting for a location for a major data centre project. The company sought clarity on retrospective taxation — an issue that had affected Cairn Energy and Vodafone — and on data interception rules for AI-related third-country data.

India currently permits data interception for national security purposes.

Lokesh said he and a team of young bureaucrats moved quickly, working with central ministers. A series of meetings culminated in Google’s October 2025 announcement of its investment, set to roll out between 2026 and 2030.

“We worked closely with the central government and received clear assurances,” Lokesh said. “This process has ultimately benefited India. Andhra had the first-mover advantage.”

He declined to share details on concessions given to Google. Modi’s office, Google, and the Ministry of Electronics and Information Technology did not respond to requests for comment.

Lokesh and his aides said approvals were not being rushed improperly.

“The leadership is very clear: Try to see how we can streamline the process, how we can run things in parallel and save time, but don’t deviate from the process,” said Saikanth Varma, CEO of the Andhra Pradesh Economic Development Board.

ANDHRA’S INVESTMENT MODEL

Lokesh said ArcelorMittal Nippon Steel considered multiple states, including one governed by Modi’s Bharatiya Janata Party, before choosing Andhra Pradesh. He said the company committed after TDP persuaded Modi to approve a 200-km slurry pipeline to transport iron ore from a neighbouring state.

“It was done within a second,” Lokesh said.

He declined to name other states considered. ArcelorMittal Nippon did not confirm the list but said its plans for facilities in both Andhra Pradesh and neighbouring Odisha, run by the BJP, were progressing.

Sanjeev Singh, a consultant who advises states on industrial strategy, said Andhra’s aggressive model increases competition and prioritises development, but may create longer-term imbalances across regions.

Andhra’s neighbouring state Karnataka, run by the opposition Congress and home to Bengaluru, had also pitched for the Google data centre but said it lost out due to concessions on power, water, land and taxes that it viewed as too costly.

Responding on X, Lokesh said: “They say Andhra food is spicy. Seems some of our investments are too. Some neighbours are already feeling the burn!”

(With inputs from Reuters)