In a landmark announcement cementing Karnataka’s status as India’s tech capital, Hon’ble Chief Minister, Siddaramaiah unveiled the state’s Budget 2025-26, introducing robust policy initiatives and significant investments in artificial intelligence (AI), deep tech, semiconductors, and Global Capability Centres (GCCs). With an estimated allocation of ₹4,09,549 crore, the budget aims to catalyze growth across emerging technology sectors, offering lucrative opportunities for industry leaders, startups, and global investors.

AI, Deep Tech, and Startup Ecosystem Expansion

A cornerstone of the budget is the establishment of a ₹300 crore Fund-of-Funds to support startups, a ₹100 crore corpus dedicated to deep tech development, and ₹50 crore over five years for the Centre for Applied AI for Tech Solutions (CATS). Further, the Karnataka government is expanding its startup ecosystem beyond Bengaluru, encouraging growth in Mysuru, Mangaluru, Hubballi-Dharwad, and Kalaburagi, with an estimated 10,000 new job creations.

AI-Powered Governance and Education Transformation

The Karnataka AI Cell is spearheading AI-based governance solutions, leveraging technologies such as computer vision, NLP, and large language models (LLMs) to enhance public services.

An AI-based Government Order Summary and Information Extraction Tool will ensure easy access to government information for both officials and citizens. “An AI-based Government Order Summary and Information Extraction Tool will facilitate easy access to government information for officials and citizens,” said the Chief Minister. Moreover, the AI-driven IPGRS 2.0 aims to modernize public grievance redressal, strengthening Karnataka’s position as a leader in digital governance.

In education, the Kalika Deepa Programme, in collaboration with Ek-Step Foundation, will introduce AI-powered learning tools in 2,000 schools, improving English, Kannada, and mathematical competencies. Additionally, AI and GIS-based attendance management systems will be rolled out across all government departments.

To modernize the judiciary, a ₹2 crore AI-based smart system will provide real-time court transcriptions, document translations, and case information access.

Investment in Safe Cities, Infrastructure, and AI-Driven Traffic Control

Under the ₹667 crore Bengaluru Safe City project, advanced surveillance and AI-driven monitoring have been prioritized. 10 AI-powered drones have already been deployed, and AI-enabled traffic cameras will be installed in 60 key locations across Davanagere, Dharwad, Kalaburagi, Belagavi, Chitradurga, Haveri, Hospet, Bellari, Vijayapura, and Dakshina Kannada districts, with an investment of ₹50 crore.

Further, under the Brand Bengaluru initiative, ₹1,800 crore has been earmarked for infrastructure, service delivery improvements, and traffic management projects.

IT, GCCs, and Emerging Tech Get a Major Boost

The Karnataka government is fostering a dynamic business environment for Global Capability Centres (GCCs), IT, and emerging technologies. The Local Economy Accelerator Program (LEAP) will launch this year with ₹1,000 crore to stimulate innovation and entrepreneurship beyond Bengaluru.

With the GCC Policy 2020-25 aiming to attract ₹5,000 crore in investments and create 3.5 lakh jobs, the state is establishing Global Innovation Districts in Mysuru, Belagavi, Dharwad, and Bengaluru to strengthen its position as a global GCC hub. The state’s IT policy also aims to attract $300 billion in investments, generating 1.5 lakh jobs, emphasising cloud computing and emerging technologies.

Karnataka’s AVGC-XR Policy 2024-29 further signals its focus on emerging technologies, with ₹150 crore set aside to drive growth in animation, visual effects, gaming, and extended reality, creating an estimated 30,000 new jobs.

Additionally, three new Global Technology Centres will be established by Karnataka State Electronics Development Corporation Limited (KEONICS) in Mangaluru, Hubli, and Belagavi, offering plug-and-play infrastructure for businesses.

A Golden Opportunity for the Semiconductor and Electronics Industry

Karnataka is rapidly emerging as India’s semiconductor and electronics hub, with global tech giants Microsoft, Intel, Accenture, and IBM committing substantial investments.

A state-of-the-art PCB Park spanning 150 acres will be established in Mysuru, fostering a specialized electronics manufacturing ecosystem. Furthermore, a ₹99 crore SensorTech Innovation Hub will accelerate research and development in sensor technologies. Strengthening its quantum technology ambitions, Karnataka will also set up Quantum Research Park Phase-2 with a ₹48 crore grant in collaboration with the Indian Institute of Science (IISc), Bengaluru.

Also Read | Uttar Pradesh Budget 2025-26 Aims to Empower Farmers, Youth, and Women

The Industrial Policy 2025-30, launched at Invest Karnataka 2025, envisions the creation of 2 million jobs and aims to attract investments in semiconductors, electronics, and renewable energy.

EV, Biotech, and Data Centre Expansion

To strengthen electronic vehicle (EV) manufacturing, Karnataka will establish an EV testing track of international standards and a state-of-the-art EV cluster near Bengaluru at an investment of ₹25 crore.

Under the Karnataka Biotechnology Policy, the government is targeting ₹1,500 crore in investments through incentives. Additionally, the data centre policy aims to attract ₹10,000 crore, targeting a total capacity of 200MW.

Lucrative Business Opportunities for Industry Leaders

With MoUs worth ₹10.27 lakh crore signed at the Global Investors’ Meet 2025, the Karnataka government is inviting business leaders, investors, and global enterprises to take advantage of its robust policies, infrastructure, and funding opportunities. The state’s clear focus on AI, deep tech, GCCs, semiconductors, biotech, EV, and digital governance positions it as India’s premier innovation hub.

Karnataka’s business-friendly initiatives ensure that corporates, tech entrepreneurs, and industrial leaders have access to funding, cutting-edge infrastructure, and a skilled talent pool, making it an ideal destination for scaling operations in the fast-growing sectors of AI, IT, deep tech, and manufacturing.

For business leaders looking to expand, Karnataka’s forward-thinking policies and incentives provide the perfect launchpad for future growth, driving technological advancements, job creation, and global competitiveness in India’s digital economy.

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