Karnataka stands out as India’s premier investment destination due to its unmatched strengths. Ranked #1 in NITI Aayog’s Innovation Index for consecutive years, the state contributes to 20% of India’s total exports and hosts the country’s largest clusters of R&D centres, engineering colleges, and software technology parks, shared Dr. Ekroop Caur, IAS, Secretary, Department of Electronics, Information Technology, Biotechnology and Science & Technology, Government of Karnataka in an exclusive interaction with Elets News Network (ENN). Edited excerpts:

Could you share how Karnataka fosters international collaborations and partnerships with leading global innovation hubs, research institutions, and multinational corporations to accelerate innovation and attract investments?

Karnataka has cemented its position as a global innovation hub by fostering international partnerships across key sectors. The flagship Global Innovation Alliance (GIA) program facilitates collaborations with leading innovation hubs worldwide, focusing on startup exchange, academic collaboration, skilling, and knowledge sharing. Over the past seven years, Karnataka has partnered with 32 countries, including Germany, Israel, Japan, South Korea, and the USA, to advance critical sectors like artificial intelligence, cybersecurity, biotechnology, and investment promotion.

 Through the GIA, Karnataka supports startups with market access programs and engages global ecosystems via Letters of Intent (LoIs), Memorandums of Understanding (MoUs), and strategic dialogues. Recent initiatives include a LoI with the Sharjah Innovation Authority and discussions for MoUs with New Jersey and Finland. At Bengaluru Tech Summit (BTS) 2024, the state hosted strategic roundtables with 12 ambassadors and consul generals to explore collaborations in skilling, higher education, and investment promotion.

 Karnataka also collaborates with global thought leaders and organisations like the World Economic Forum (WEF), which supported the creation of the Centre for the Internet of Ethical Things (CIET) at IIITB. Ongoing discussions with WEF aim to bolster the state’s Centre of Excellence (CoE) for AI.

 These efforts create fertile ground for startups, academia, investors, and stakeholders from the global innovation ecosystem to engage with Karnataka. They reinforce the state’s position as a global innovation leader, driving sustainable growth and attracting investments.

Considering Bengaluru’s position as a leading global tech hub, what investment opportunities do this city present for investors?

Bengaluru, often referred to as the “Silicon Valley of India,” is not only the startup capital of India but also a global innovation hotspot. With over 43 unicorns and 3 (Flipkart, Swiggy, and Byju’s) out of 4 Decacorns in India, Bengaluru accounts for 40% of India’s total unicorns, contributing significantly to the nation’s startup ecosystem. The city’s vibrant tech ecosystem, home to companies like Flipkart, Swiggy, Byju’s, and Ola, thrives on innovation across domains such as fintech, artificial intelligence, deep tech, aerospace, and biotechnology.

The Bengaluru-Mumbai Economic Corridor and the Outer Ring Road IT Corridor are transforming Bengaluru into a global investment magnet, bolstered by infrastructure projects such as Phase 2 and Phase 3 of Namma Metro and the ₹8,000 crore airport expansion project. With annual IT exports of over ₹4.5 lakh crore and a GSDP of $336.81 billion, Bengaluru offers unparalleled opportunities for investors.

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The city also boasts a strong R&D and innovation ecosystem, attracting global corporations and startups alike. Bengaluru’s immense talent pool, comprising highly skilled professionals, ensures a competitive edge across multiple domains. The city is emerging as a key hub for investment opportunities in critical sectors such as ESDM (Electronic System Design and Manufacturing), Spacetech, AI, and data centres. These high-growth areas, coupled with Bengaluru’s existing strengths, position it as a premier destination for innovation, research, and sustainable growth.

What are the department’s strategies to attract and facilitate the establishment of Global Capability Centres (GCCs) in the region to boost investment?

To effectively attract and facilitate the establishment of GCCs in the state, the Government of Karnataka’s approach is structured around four strategic pathways: talent development, local ecosystem enhancement, infrastructure improvement, and ease of doing business.

Talent development has been emphasised through specific initiatives such as reimbursing internship stipends, implementing recruitment assistance programs to facilitate the hiring of top talent, supporting joint research projects between academia and industry, and redesigning educational curricula to equip graduates with industry-demand-oriented skill sets. These initiatives will be supported by policy-based incentives like the reimbursement of EPF contributions for new employees in areas beyond Bengaluru.

To enhance the local ecosystem, dedicated Global Innovation Districts will be established in cities like Bengaluru, Mysuru, and Belagavi. This will be complemented by the development of Innovation Labs and Centres of Excellence. Furthermore, the government will provide funding for hosting R&D events and conferences within the state to foster collaboration. Additionally, specific cluster groups will be formed to assist GCCs in setting up operations, particularly in areas beyond Bengaluru.

Infrastructure development has been prioritised under the policy through measures such as reimbursement of rental costs, provision of grants for improving R&D infrastructure—especially related to AI—exemption from electricity duty costs, reimbursement of property tax, and allowing GCC units to switch to industrial power tariffs to reduce operational costs.

Lastly, regarding the ease of doing business, the Government of Karnataka will streamline regulatory and administrative processes by fast-tracking approvals for setting up GCCs within 45 days. A dedicated help desk will also be established to provide guidance and expedite processes for GCCs.

The combination of these four strategic pathways aims to sustain Karnataka’s attractiveness as the leading destination for Global Capability Centres.

What are Karnataka’s key competitive advantages that distinguish it from other states as an investment destination, and how is the state leveraging these advantages to attract foreign and domestic investment?

Karnataka stands out as India’s premier investment destination due to its unmatched strengths. Ranked #1 in NITI Aayog’s Innovation Index for consecutive years, the state contributes to 20% of India’s total exports and hosts the country’s largest clusters of R&D centres, engineering colleges, and software technology parks.

The state leads in sectors like aerospace and defence, contributing 65% of India’s aerospace exports, and machine tools, producing 50% of India’s total machine tool output. Its robust infrastructure includes 9 minor ports, 2 international airports, and seamless connectivity through 13 national highways and the Bengaluru-Mumbai Economic Corridor.

Karnataka also offers a thriving innovation ecosystem, supported by its strong R&D capabilities and a vast talent pool of skilled professionals, making it a preferred destination for global corporations and startups alike. The state is emerging as a key hub for investment in high-growth sectors like ESDM (Electronic System Design and Manufacturing), Spacetech, AI, and data centres.

These factors, combined with progressive policies, ease of doing business initiatives, and world-class infrastructure, make Karnataka the go-to destination for investors seeking opportunities across diverse sectors.

How are the Centres of Excellence in Karnataka, like those for AI, Fintech, Biotech, and advanced manufacturing, helping to attract more businesses, encourage new ideas, and create good job opportunities for people?

Karnataka’s Centres of Excellence (CoEs) play a pivotal role in fostering innovation, attracting businesses, and creating high-quality job opportunities. Acting as collaborative hubs, they bring together academia, industry, startups, and government to address cutting-edge challenges and drive economic growth.

With 20 CoEs (15 operational and 5 upcoming), these centres span diverse fields such as Artificial Intelligence (AI), Gaming, Spacetech, Medtech, Healthtech, Advanced Manufacturing, and more. Developed in collaboration with industry leaders and prestigious academic institutions, each CoE is designed with clear goals for supporting startups, skilling the workforce, and driving research.

1.   Artificial Intelligence & Deeptech

Karnataka’s AI and IoT CoEs, in partnership with NASSCOM, have supported hundreds of startups across sectors like healthcare, retail, and automation. Notable success stories include Niramai, an AI-powered solution for early cancer detection, revolutionising healthcare outcomes.

Additionally, ARTPARK, based at IISc Bengaluru, drives advancements in industrial automation, mobility, agriculture, and healthcare. The recently announced AI CoE in collaboration with the IIT Alumni Centre Bengaluru (IITACB) further cement Karnataka’s reputation as a global AI hub.

2.   Quantum Research Park

Karnataka is leading India’s foray into quantum technology with its Quantum Research Park, established in collaboration with IISc. This initiative focuses on advancing research in quantum computing, communications, and cryptography, paving the way for groundbreaking applications across industries.

3.   Wired and Wireless Technology CoE

The Centre of Excellence for Wired and Wireless Technology focuses on cutting-edge advancements in telecommunications, 5G, and next-generation wireless networks. It serves as a hub for startups and researchers to innovate in critical areas such as connected devices, IoT, and Industry 4.0 applications.

4.   Biotechnology

Karnataka is home to world-class biotech institutions like the Bangalore Bioinnovation Centre (BBC) and the Centre for Cellular and Molecular Platforms (C-CAMP). These institutions are instrumental in incubating and accelerating biotech startups. For example, C-CAMP has developed innovations in infectious disease diagnostics, antimicrobial resistance, cell therapy, immuno-oncology, and digital health, contributing significantly to India’s biomedical landscape. The state also launched a dedicated Health-Tech and Med-Tech CoE to bolster the growing health and medical ecosystem through capability and capacity building.

5.   Animation, Visual Effects, Gaming, and Comics (AVGC)

Karnataka is home to India’s largest AVGC Centre of Excellence, based in Bengaluru. This state-of-the-art facility serves as a hub for the development of animation, visual effects, gaming, and extended reality (XR). The AVGC CoE has positioned Karnataka as a leader in creative industries by fostering talent, driving innovation, and enabling global collaborations.

6.   Fintech

The Fintech CoE, recently established in partnership with IIM Bangalore, is fostering a vibrant ecosystem for open financial technologies. By supporting startups and advancing digital payment solutions, Karnataka has positioned itself as a leader in India’s fintech revolution, contributing to the state’s dynamic startup landscape.

7.   IoT and Data Science

The IoT CoE, in collaboration with NASSCOM, focuses on health tech, Industry 4.0, smart city mobility, energy, and agriculture. Meanwhile, the CoE for Data Science and Artificial Intelligence (CoE-DSAI) aims to position Karnataka as a global AI and data science hub, driving innovation, research, and data-driven decision-making.

Through these initiatives, Karnataka’s CoEs are not only fueling innovation and entrepreneurship but also creating a robust pipeline of skilled professionals and sustainable business opportunities. This holistic approach ensures the state remains a preferred destination for businesses and a pioneer in emerging technologies.

How does the state ensure fast-track approvals and investor support for startups and create a supportive ecosystem?

Karnataka has established itself as a leading startup hub through a cohesive strategy of supportive policies, robust infrastructure, and global outreach. That aside, the state ensures fast-track approvals and robust investor support for startups through a streamlined single-window clearance system that minimises bureaucratic delays. The Karnataka Startup Policy 2022-27 offers structured incentives, subsidies, and funding mechanisms, supported by a specialised cell under the Karnataka Innovation and Technology Society (KITS) for quick decision-making and handholding support. Financial benefits, including seed funding, venture capital funding, patent reimbursement, and tax incentives, reduce operational hurdles for startups. To foster and encourage the startup ecosystem in the state, our flagship Idea2PoC program – Elevate is now designed to be completed within 100 days, giving that necessary boost to 100 startups twice a year. Strategic initiatives like the Beyond Bengaluru Seed Fund, preferential market access policies, and collaborations with entities such as Let’s Venture to enhance mentorship, funding, and market entry opportunities. These efforts are bolstered by the state’s focus on capacity building through over 70 incubators, 130+ acceleration programs, and investor sensitisation initiatives.

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Karnataka’s global outreach strengthens its ecosystem by promoting cross-border collaborations through platforms like the Bengaluru Tech Summit, G20 engagements, and London Tech Week, attracting international investors and showcasing its startups. With 23% of India’s FDI inflows (FY23), world-class infrastructure like tech parks, CoEs, and an upcoming deep-tech innovation campus, and initiatives like Global Innovation Alliances with 30+ international hubs, Karnataka integrates startups into global networks. Over 3,500 registered startups, inclusive policies for women and student entrepreneurs, and market access via 80+ government work orders position the state as a dynamic hub for innovation and entrepreneurship.

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