Karnataka is the IT hub of India and home to the fourth-largest technology cluster in the world.
Karnataka is located in the south of India. It is surrounded by the Arabian Sea on the west, Goa on the northwest, Maharashtra on the north, Andhra Pradesh on the east, Tamil Nadu on the southeast, and Kerala on the southwest.
Karnataka has a vibrant automobile, agro, aerospace, textile and garment, biotech, and heavy engineering industries.
The state has sector-specific Special Economic Zone (SEZs) for key industries such as IT, biotechnology, engineering, food processing and aerospace. Karnataka is the IT hub of India & home to the fourth-largest technology cluster in the world.
Karnataka boasts of diverse flora and fauna and a 320 km natural coastline, which makes it a nature tourist's paradise.
According to an EXIM Bank report, in FY25, total exports from the state stood at Rs. 2,31,888 crore (US$ 27.15 billion) in FY25 (until February 2025). Engineering Goods were the top exported item from Karnataka, accounting for 25.3% of the total exports, followed by Electronic Goods 23.7%.
Karnataka offers a Wide range of fiscal and policy incentives for businesses under the Karnataka Industrial Policy 2020-25, with simplified procedures for investment. In September 2017, the government of Karnataka passed the ‘Karnataka Electric Vehicle and Energy Storage Policy 2017’. In June 2021, the Karnataka government amended the policy to offer more impetus to the electric mobility sector.
As per the amendment, a 15% subsidy was announced on capital expenditure on land value (fixed value assets up to a maximum limit of 50 acres of land).
As of February 2025, the state had an installed power generation capacity of 34,544.76 MW. Of this, central utilities contributed 4,062.22 MW, private utilities 21,263.01, and state utilities 9,219.54 MW. Of the total installed power generation capacity, 10,829.47 MW was contributed by thermal power, followed by nuclear 698.00 MW, renewable power 23,017.29 MW and hydropower 3,631.60 MW.
Karnataka is a premier tourist destination in India, offering a diverse array of attractions. The state boasts ancient architectural marvels like Hampi and Mysore, serene beaches in Gokarna, and the lush greenery of the Western Ghats. Bengaluru, the state capital, is a blend of modernity and tradition, featuring historic sites like the Bangalore Palace alongside a thriving tech industry. Wildlife enthusiasts are drawn to the Bandipur and Nagarhole National Parks, home to tigers, elephants, and a variety of other wildlife. Tourism in Karnataka has been on the rise, with tourist arrivals reaching 28.45 crore in 2023, up from 18 crore in 2022.
At current prices, Karnataka’s revised gross state domestic product (GSDP) was estimated to be ~Rs. 30.70 trillion (US$ 359.45 billion) in FY26. The state’s GSDP increased at a CAGR of 11.38% between FY16 and FY26. The state's economy is driven by key sectors such as information technology, biotechnology, manufacturing, and agriculture. Bengaluru, the state capital, serves as a global IT hub, hosting numerous major tech companies such as Infosys, TCS, and Wipro, that significantly contribute to the state's GDP. According to the Department for Promotion of Industry and Internal Trade (DPIIT), the state’s cumulative FDI inflow stood at Rs. 4,27,130 crore (US$ 55.52 billion) between October 2019-December 2024, the second highest in the country after Maharashtra, and accounted for 20% of India’s cumulative FDI inflows.
Karnataka has a diverse and dynamic industrial landscape. The state is a leader in the IT and biotechnology sectors, with Bengaluru serving as a global hub. According to the Index of Industrial Production (IIP), the manufacturing sector in Karnataka grew by 7.2% in 2023. Key industries in the state include aerospace, automotive, and textiles. Some of the major companies in these sectors are Hindustan Aeronautics Limited (HAL), Toyota Kirloskar Motor, and Raymond. Karnataka is also a key player in the mining industry, boasting abundant reserves of iron ore and other minerals. The state has a strong presence in the handicrafts and cottage industries as well, reflecting its rich artisanal heritage. This varied industrial landscape, coupled with the state's strategic location and well-developed infrastructure, make Karnataka a preferred destination for domestic and international investors