The southern Indian state of Andhra Pradesh has launched a global roadshow to lure a greater variety of multinational firms.

The country has already proved attractive to technology firms, many of which have outsourced production to the cyber cities of Hyderabad, in Andhra Pradesh, and Bangalore in neighbouring Karnataka.

Only by industrialisation can the economy be developed

K Vidyadher Rao, minister for major industries

Now, the government of Andhra Pradesh is determined to persuade other industries - such as pharmaceuticals, textiles, cars and services - to follow the example of the tech firms and set up shop in India.

"India is the future destination for investors in the next decade," K Vidyadher Rao, Andhra Pradesh's minister for major industries, told BBC News Online during the London leg of the roadshow.

"Only by industrialisation can the economy be developed."

Inter-state rivalry

A delegation of a dozen senior officials and businessmen from Andhra Pradesh has been touring New York, Dubai, Singapore and London, touting the benefits of doing business in their state.

The Minister of Major industries headed the roadshow

"We've got stable politics, a surplus of power generation, good infrastructure; we're one of the most progressive states in India," Mr Rao said.

India's more developed states are determined not to be overlooked, or tarnished by India's overall image as a tricky place to do business.

Delhi encourages individual states to compete, seeing it as a healthy way of raising the whole country's economy.

Tax-free incentives

Andhra Pradesh's efforts are part of a wider scheme by the Indian government to increase foreign direct investment (FDI) into India.

To kickstart FDI, the Indian government has granted several states the opportunity to establish Special Economic Zones (SEZs), offering foreign firms a tax-free location from where to operate.

The SEZ model has been implemented in other Asian countries, including China and the Philippines, where foreign direct investment is rising significantly.

Andhra Pradesh, which has 36% unemployment, is hoping that such a zone will help create 17-20 million jobs by 2020.

Call for help

But the state is not prepared to go it alone.

It is seeking a foreign partner to finance the construction of the special zone, at an estimated cost of $400m.

Senior officials met about 40 UK firms on Tuesday to discuss their involvement in the project, with expressions of interest due in by early October.

The state government is aiming to establish the zone by March 2003, before than launching a second roadshow to entice businesses.

And that will be the real test of the appetite of foreign firms to outsource to India.