Karnataka has emerged as a significant player in the Animation, Visual Effects, Gaming, Comics, and Extended Reality (AVGC-XR) sectors in recent years. To further consolidate its position and drive growth in these fields, the Government of Karnataka has unveiled the AVGC-XR Policy 3.0. This forward-looking policy aims to transform Karnataka into a global hub for AVGC-XR by fostering a supportive environment for startups and established companies.

The AVGC-XR Policy is structured around six key pillars, each designed to address specific sector needs and opportunities. These pillars collectively serve as the foundation for Karnataka’s ambitious vision, ensuring the state’s global competitiveness.

Skill Development
A well-trained workforce is essential for the growth and innovation of the AVGC-XR sectors. The policy prioritises skill development by establishing a committee and vocational training programs. These initiatives aim to identify and bridge skill gaps, thereby equipping professionals with the necessary expertise to excel in AVGC-XR. By investing in human capital, Karnataka is poised to cultivate a workforce capable of driving innovation and excellence.

Infrastructure Development
To support the AVGC-XR sectors, the policy focuses on creating dedicated AVGC-XR parks and Centres of Excellence. These facilities, equipped with state-of-the-art technology, will serve as hubs for research and development. Additionally, the integration of smart-grid technology underscores the commitment to sustainability. This robust infrastructure will position Karnataka as a leader in Animation, Visual Effects, Gaming, Comics, and Extended Reality, fostering an environment conducive to innovation.

Empowering Startups and MSMEs
The policy recognises the critical role of startups and small and medium enterprises (MSMEs) in driving innovation and economic growth. The policy includes provisions for workshops, incubators, accelerators, and a dedicated venture fund to support these entities. Karnataka aims to encourage entrepreneurship and facilitate the growth of startups and MSMEs within the AVGC-XR sectors by creating a supportive ecosystem.

Global Market Access
In today’s interconnected world, global market access is vital for the success of any industry. The AVGC-XR Policy promotes collaborations with international tech hubs and the establishment of an AVGC-XR IP marketplace. These initiatives are designed to facilitate technology transfer, global partnerships, and transactions, positioning Karnataka on the global stage. By fostering international competitiveness, the policy aims to open new avenues for growth and innovation.

Financial Support
To ensure sustained growth, the government is committed to providing financial support through incentives, concessions, and a dedicated venture capital fund. This financial backing is a company safety net, encouraging risk-taking and experimentation. The policy aims to create an environment where companies can innovate and thrive by mitigating financial risks.

Multiplatform AVGC-XR Products
As the gaming and extended reality landscapes evolve, the policy emphasises the importance of multi-platform AVGC- XR products. By incentivising and supporting companies involved in these products, the policy ensures that Karnataka remains at the forefront of technological advancements. This strategic focus is expected to drive innovation and maintain the state’s competitive edge.

Strategic Incentives for Growth and Sustainability Central to the AVGC-XR Policy is a framework designed to prompt growth, innovation, and sustainability within the ecosystem. This includes a range of strategic incentives aimed at nurturing a thriving environment.

Skill Development and Job Creation
The policy offers employees a course fee reimbursement of INR 3,000 monthly for the first year of employment. The incentive covers up to 50% of course expenses capped at INR 7.5 Lakhsand INR 12 Lakhs for PF reimbursement during the policy period. This initiative is designed to make skill development more accessible and affordable, promoting job creation and workforce development.

Infrastructure Support
Companies can benefit from a capital subsidy for purchasing IT equipment and rental benefits. This includes a subsidy of up to 20% of the cost incurred, capped at INR 20 Lakhs for IT equipment and up to 20% of the cost incurred, capped at INR 5 Lakhs for rental equipment during the policy period. These incentives aim to reduce operational costs and facilitate access to cutting-edge technology.

Early-Stage Startup Support Program

The policy provides financial assistance for various operational costs to support early-stage startups. This includes 40% support for marketing costs (capped at INR 1 Lakh), 40% support for leasing costs (capped at INR 2 Lakhs), 50% support for operational costs (capped at INR 50,000), and 50% support for compliance costs (capped at INR 2 Lakhs). These measures are designed to alleviate financial burdens and encourage startup growth.

IP Creation and Protection
Recognising the importance of intellectual property (IP), the policy provides legal assistance for IP filing and trademarking. Companies can receive up to INR 20 Lakhs for international IPs and INR 5 Lakhs for domestic IPs. This support aims to protect and promote innovation within the AVGC-XR sectors.

Quality Assurance
To ensure high standards, the policy offers 30% support for certification charges, capped at INR 5 Lakhs during the policy period. This initiative is designed to promote quality assurance and enhance the credibility of AVGC-XR products and services.

International Market Access
Companies can receive 40% support, capped at INR 5 Lakhs per year per company, for participating in international trade shows or expos. This financial assistance is intended to facilitate global market access and foster international collaborations.

A Catalyst for Transformation
The AVGC-XR Policy for 2024-2029 is not merely a roadmap but a catalyst poised to revolutionise India’s Animation and Gaming Industry. The Karnataka government aims to create a dynamic and globally competitive AVGC-XR ecosystem through meticulous planning and a commitment to innovation. This strategic approach is expected to drive job creation, encourage entrepreneurship, and position Karnataka as a frontrunner in the rapidly evolving AVGC-XR landscape.

By fostering strategic alliances and emphasising sustainable growth, Karnataka maintains its stronghold in the traditional IT-BPM sector and emerges as a powerhouse in the global AVGC-XR arena. This policy marks a significant stride toward realising the state’s vision for the future, ensuring economic prosperity and competitiveness in the dynamic world of AVGC-XR.

Insights shared by Nagaraj Bhavani, General Manager – Events & Promotions, Karnataka Innovation and Technology Society (KITS), Dept. of Electronics, Information Technology and Biotechnology, Government of Karnataka

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