How Telangana emerged as the second Silicon Valley of India after Bengaluru

FOUNDED only in 2014, India's southern state of Telangana is increasingly becoming a destination for US tech giants, The Times reported.

The information technology minister of the state, Kalvakuntla Taraka Rama Rao hopes to transform this agricultural region into a new-age tech mecca.

The state administration led by Rao’s father, Kalvakuntla Chandrashekar Rao, and his family are elbowing away rivals to sweep up huge investments from Silicon Valley.

According to The Times, Hyderabad is now setting itself up as the backdrop for a new era of humanity’s technological advancement.

Google, Apple and Uber are all mapping the globe from their offices in the city’s tech district, Rao said. Amazon’s Alexa software is being developed next door. Pharmaceutical company Novartis employs more than 8,000 in the city working on digital drug discovery. Even US president Joe Biden’s helicopter cabin was built in his city, he added.

Investment in Hyderabad began in the 1990s when it was part of the Andhra Pradesh region. Its famously tech-savvy chief minister Chandrababu Naidu courted Bill Gates to set up the first Microsoft office in Hyderabad, kickstarting a huge influx of tech capital into the city.

In 2019, Amazon set up its biggest campus in the world in Hyderabad — large enough to accommodate 65 football fields. In April, Google started work on a new campus, its second-largest outside America, which will double its footprint in the city, while Apple, Meta and Microsoft are among the long list of tech firms with offices in the city.

Deliveroo, the London-based “unicorn” — a company valued at more than $1 billion — opened its first office in the city in 2022.

“I met Amazon’s country head, based out of Bangalore, in 2014. He said the tax department was giving him grief," Rao said.

Rao offered to streamline taxes and facilitate the relocation and in 2019, Amazon opened its biggest campus in the world in his state.

The new government sped through new construction permits and offered big tech firms incentives to pitch up in Hyderabad. University syllabuses were supplemented with courses co-written by Silicon Valley companies, passing training costs usually borne by tech firms onto Indian taxpayers.

According to the industry trade association Nasscom, 5 million Indians work in the IT sector and account for 8 per cent of the country’s total GDP.

In 2022, Telangana’s revenues from exports of IT and IT-enabled services increased 26 per cent from the previous year to £19.1 billion. The state added 1.5 million new tech jobs, government figures show.

The Times report said that a switch to automation and artificial intelligence has again accelerated the demand for cheap, invisible foreign labour. Along with high-paid jobs for programmers, India continues to be the go-to destination for cheap, monotonous labour. Oxford University’s Online Labour Index estimates that a third of such online “gig” work takes place in India.

“India is still a third-world country. When I go out of the country, I have a mixed bag of emotions: that we can’t get the basics right after 70 years of independence," Rao told The Times.

“When our kids see their peers in other parts of the world knowing they won’t have the same outcomes, when I see a Chinese child who was as good as me in 1987 now earning five times what I earn, do I not feel bad about it?”