ISAS Insights

Summary

The N Chandrababu Naidu government’s plan for the development of Amravati as the capital of the newly formed state of Andhra Pradesh in 2014 ran into a roadblock when the Yeduguri Sandinti Rajasekhara Reddy Congress Party gained power in 2019. Singapore had extended support in the development of the capital city but had to withdraw its assistance when the Jagan Mohan Reddy-led government shelved the project. With Naidu back in power, the project is poised for revival with Singapore entities confirming their support.

The state of Telangana was carved out of Andhra Pradesh as India’s 29th state on 2 June 2014. It was the end result of a decade-long movement to bring about a new state based more on cultural factors rather than on a linguistic basis. Hyderabad, which was the capital of an undivided Andhra Pradesh, was supposed to continue to be the joint capital of the two states for 10 years. Andhra Pradesh needed a new capital, as Guntur and Vijaywada were already fairly crowded cities. Amaravati was chosen as the capital region of Andhra Pradesh in 2014. The new capital city was proposed to be located along the Krishna River, upstream of the Prakasam barrage, next to the Vijaywada railway station. The upcoming city gets its name from Amaravati, a village in Guntur district, which is one of the several covered under the Andhra Pradesh Capital Region. The region is known to have served as the capital of the Satavahana Kingdom, whose reign lasted from mid-1st century to the early 3rd century AD.

N Chandrababu Naidu, belonging to the Telugu Desam Party (TDP), became the chief minister of the new state of Andhra Pradesh in June 2014. He had earlier served as the Chief Minister of (United) Andhra Pradesh for about eight years till 13 May 2004. It is of significance that Naidu belongs to the Kamma community, and the Amaravati region is a stronghold of the Kammas, the community with which the TDP is identified.

Naidu had a particular fascination for Singapore and believed it to be a sustainable and liveable city. It was, thus, only natural that he reached out to the Singapore government to help build part of the new capital city of Amaravati, in what became the first government-to-government collaboration of its kind between the two nations. Responding favourably, Singapore assembled a team spanning multiple agencies. A memorandum of understanding between Andhra Pradesh and Singapore was signed in December 2014. Slated to cost ₹270 billion (S$4.1 billion) and house 3.5 million people, Amaravati was conceived to be a ‘Singapore-like capital city’ that would draw in the world’s top investors.

By October 2015, a Singapore consortium – comprising CapitaLand-owned Ascendas Singbridge and Sembcorp Development – submitted a proposal to become the master developer of a 6.84-square kilometres start-up area, which would form the commercial core of Amaravati. The overall city plans closely mirrored Singapore’s growth into a modern city with a Central Business District and Amaravati’s own version of the Mass Rapid Transit. Singapore’s involvement in this area became official in May 2017 with the appointment of the consortium as master developer of the city’s commercial core.[1]

Background of the Capital Region Plan

The state government enacted the Andhra Pradesh Capital Region Development Authority Act, in 2014 for the declaration of the new capital area for Andhra Pradesh and the establishment of the Andhra Pradesh Capital Region Development Authority (APCRDA). The APCRDA was constituted for the purpose of planning, co-ordinating, executing, supervising, financing, funding, promoting and securing the planned development of the capital region and capital city area.

The capital city would cover an area of 217 square kilometres in the Amaravati capital region. To locate the project, 953 villages were included. A total of 3,2325 farmers consented to pool their lands and 3.5 million people were expected to populate the area by 2050.[2] The Land Pooling Scheme is the assembly of small land parcels under different ownerships voluntarily into a large land parcel, provide it with infrastructure in a planned manner and return the reconstituted land to the owners duly deducting land required for infrastructure and land in lieu of cost of development towards the provision of infrastructure.

In December 2014, the Singapore and Andhra Pradesh governments signed a memorandum of understanding (MoU) to develop the new capital city. The Singapore government would assist with the drawing up of plans for the capital region, capital city and a detailed seed development area. One or more Singapore entities would also act as the master developer of the seed development area, alongside other opportunities to collaborate and export the country’s urban development expertise.

The Centre for Liveable Cities (CLC) was one of the partner agencies working with Singapore’s Ministry of Trade and Industry (MTI) to advise the Andhra Pradesh leadership. The CLC worked closely with the APCRDA, which also worked with Singapore’s international urban planning firm, Surbana-Jurong Pte Ltd, on the three master plans that were delivered within the first seven months.[3] Through the CLC’s panel of experts, the organisation offered technical assistance in capability building development, urban governance and institution building as well as advice on urban issues such as water supply management, electricity systems, land use, transport and urban design amongst others. They also shared their rich experiences of structuring urban systems, policies and processes and solving urban issues in Singapore through a series of workshops and study visits, enabling the Andhra Pradesh government to advance faster in its work.

The Plan is Halted

The project work towards development of the capital city hit a roadblock when Naidu lost power to the Yeduguri Sandinti Rajasekhara Reddy (YSR) Congress Party led by Jagan Mohan Reddy[4] in 2019. The YSR Congress Party and Reddy opposed the Amaravati project. The new government proposed three capitals – Amaravati as the legislative Capital, Kurnool as the judicial Capital and Visakhapatnam as the administrative Capital. The opposition to the Naidu-led development for the Amravati project, it is believed, could have been to ensure that government funding was not concentrated in the Kamma heartland.

Soon, India’s federal government also pulled out of its support for the project. Other lending institutions followed suit. The World Bank withdrew a US$300 million (S$385 million) loan meant for the Amaravati project, with YSR Congress Party government officials blaming corruption in Naidu’s party.

With the project not getting any support from the new government, the Singapore consortium and the Andhra Pradesh joint development company, Amaravati Development Partners, decided to wind-up their commercial partnership on the start-up area of Amaravati. Singapore, thus, opted out of the capital city plan in 2019.

The three capitals plan, however, met with legal hurdles as the Andhra Pradesh High Court declared in March 2022 that Amaravati alone should be the capital. Reddy’s government challenged the order in the Supreme Court but did not receive any relief. The project, thus, went into limbo.

The Project is Revived

In 2024, when Naidu’s TDP returned to power, Amaravati has, once again, been catapulted to a priority project. The Masterplan has been revived, and new brochures and guidance pamphlets are in circulation. The estimated budget for the development of Amaravati was now pegged at ₹64,910 crore (about S$1 billion) in 2024, with the Indian government committing to ₹15,000 crore (S$250 million) of that amount. The Centre has also facilitated support for Amaravati from the World Bank and the Asian Development Bank to the tune of US$800 million (S$1.1 billion) each, according to government estimates.[5]

The state government hopes Amaravati will be an ‘economic hub’ for the region by 2050 — creating 1.5 million jobs, housing a population of 3.5 million and generating a gross domestic product of S$45 billion. Many of the upcoming government buildings are expected to be ready in 18 months’ time, including the quarters for members of the Legislative Assembly, ministers and judges. The new Legislative Assembly building and the High Court are expected to be ready to move in within two years. The Secretariat is expected to come up in three years.

The Masterplan also has provisions for a ‘justice city’, which will be a legal and arbitration centre, housing the High Court and residences for judges, among other buildings. There will also be a ‘finance city’ with buildings that will serve as the base for banking, financial technology and financial services firms. There are other sub-cities in the works – a ‘health city’ that will have hospitals, medical research centres and pharmaceutical industries; a sports city with state-of-the-art infrastructure and training facilities; an ‘electronics city’ with information technology and electronics manufacturing; a ‘media city’ with film, entertainment and digital media; and a ‘tourism city’ to showcase Amaravati’s hospitality and cultural heritage. The Union government has extended support to relaunch the new city with the prime minister laying its foundation stone in May 2025 for projects worth ₹58,000 crore (S$950 million) in Andhra Pradesh, including the revival of construction work on greenfield capital city of Amaravati. Of the project cost, the Housing and Urban Development Corporation has already signed an agreement to extend a loan of ₹11,000 crore (S$175 million) while discussions are in pipeline with KfW for ₹5,000 crore (S$90 million). Other potential sources of funding are also being explored.

The APCRDA is designing massive branding programmes to attract anchor investors, and private sector participation for the economic development. Public-private partnership projects are being promoted, and a special viability vehicle is envisioned to meet viability gap funding.

Phase One of the project envisages development of basic infrastructure including housing, healthcare, education, sanitation and transportation. The master plan comprises dedicated plots in each neighbourhood for a healthcare facility (27 neighbourhoods/townships). A dedicated health city is planned in the capital city that is envisioned to nest major hospitals and ecosystems.

A dedicated knowledge city is planned within Amaravati. Thus far, SRM University, Amrutha University, Vellore Institute of Technology and the National Institute of Design are operational with about 22,000 students. Besides this, Birla Institute of Technology and Science, Xavier School of Management, Purdue University, Tokyo University and Georgia Institute of Technology, among others, are in the pipeline for establishment.

Additional sectors like the Education City, Health City, Sports City, Electronics City, Media City and Tourism City are also part of the blueprint, aimed at creating a balanced urban ecosystem. To ensure sustainable development, the project emphasises green and blue infrastructure, including water bodies, reservoirs, and green spaces.

Singapore Government Renews its Partnership

To seek a revival of the Singapore government’s support for developing the capital city region, a delegation led by the Naidu visited Singapore at the end of July 2025. After deliberations between the two governments, Singapore Minister for Manpower and Minister-in-charge of Energy and Science & Technology, Tan See Leng, reaffirmed Singapore’s readiness to partner with the Andhra Pradesh government in the state’s development, particularly in building Amaravati and driving economic collaboration across multiple sectors.[6] The minister conveyed Singapore’s interest in working closely with Andhra Pradesh on key projects. He highlighted the State’s potential in areas like agriculture, food processing, renewable energy, port development, digital technologies and skill development. He also noted that Singaporean companies such as Food Empire and EverVolt are already looking to expand their operations in Andhra Pradesh, citing the state’s rapid growth and investor-friendly climate.

While the initial plan was that Singapore would put in seed capital into the development, the new partnership is expected to be more broad-based, with Singapore extending technical support for the development of Amaravati. This will include support in developing infrastructure within the capital region. There will be focus on urban planning and technology assistance for Amaravati, impetus to infrastructure and logistics investments across the state. An MoU has already been signed with Singapore’s sovereign wealth fund, GIC, to invest ₹45,000 crores (S$750 million) in Andhra Pradesh. MTI has also assured that every effort would be made to renew the partnership that had been forged with the Andhra Pradesh government in 2014-19. Singapore entities, which played a crucial role in Amaravati’s initial planning between 2014 and 2019, have been in consultation with APCRDA and the municipal department officials to explore potential collaboration.

In light of their experience in 2019, the participating Singapore entities have been seeking a guarantee from the Union government. It is expected that such support will be forthcoming. Considering the vagaries of political overtones when diverse political alignments forge governments at the state level, foreign institutional investors have been seeking such letters of comfort from the government of India to secure their investments.

After the visit of Indian Prime Minister Narendra Modi to Singapore in September 2024, ties between the two countries were elevated to a Comprehensive Strategic Partnership. It is expected that cooperation in diverse fields will help forge better and longer-term ties between the two countries. Experience with uncertainties related to tariffs with its Western trading partners, India would be seeking to establish deeper trade and investment ties with its Association of Southeast Asian Nations trading partners.

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Mr Vinod Rai is a Distinguished Visiting Research Fellow at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore (NUS). He is a former Comptroller and Auditor General of India. He can be contacted at isasvr@nus.edu.sg. The author bears full responsibility for the facts cited and opinions expressed in this paper.

[1]   ‘Singapore Consortium appointed Master Developer for Amaravati’, Press Release, Ministry of Trade and Industry, Singapore, 15 May 2027, file:///C:/Users/isashes/Downloads/press-release-singapore-consortium-appointed-master-developer-for-amaravati%20(2).pdf.

[2]   ‘Amaravati Project’, Andhra Pradesh Capital Region Development Authority, March 2017, Edition 2, https://crda.ap.gov.in/crda_norifications/NOT05072448/01~APCRDA%20Project%20Report%20March17.pdf.

[3]   Ng Jun Sen, ‘Explainer: Why Amaravati project — touted as ‘S’pore of India’ — got scuppered and the impact on S’pore firms’, Today, 12 November 2019, https://www.todayonline.com/singapore/explainer-why-amaravati-project-touted-spore-india-got-scuppered-and-impact-spore-firms.

[4]   ‘Jagan Mohan Reddy’, Indian Express, https://indianexpress.com/about/jagan-mohan-reddy/.

[5]   Nikhila Henry, ‘Making of Andhra Pradesh’s capital Amaravati: As PM Modi ‘relaunches’ mega TDP project, where do things stand now?, Indian Express, 3 May 2025, https://indianexpress.com/article/long-reads/amaravati-capital-andhra-pradesh-chandrababu-naidu-tdp-krishna-river-apcrda-9979851/.

[6]   G V R Subba Rao, ‘Singapore reaffirms commitment to Amaravati and A.P. development; Naidu hails move’, The Hindu, 29 July 2025, https://www.thehindu.com/news/national/andhra-pradesh/singapore-reaffirms-commitment-to-amaravati-and-ap-development-naidu-hails-move/article69868396.ece.

Pic Credit: Wikimedia Commons