Introduction
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.
At current prices, Karnataka’s gross state domestic product (GSDP) is projected to be ~Rs. 18.85 trillion (US$ 243.56 billion) in 2022-23. The state’s GSDP increased at a CAGR of 8.79% between 2015-16 and 2022-23.
In FY22 (until February 2022), the state’s total exports stood at US$ 22.83 billion. In overall exports, sectors such as petroleum products, iron & steel and organic chemicals were the key contributors.
Karnataka has 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. It has 34 operational SEZs, as of October 2020.
Karnataka boasts of a diverse flora and fauna and a 320 km natural coastline, which makes it a nature tourist's paradise.
According to the Department for Promotion of Industry and Internal Trade (DPIIT), between October 2019-December 2021, cumulative FDI inflows in Karnataka reached US$ 29.21 billion, the second-highest in India after Maharashtra, and accounted for 23.06% of India’s cumulative FDI inflows.
Karnataka offers a Wide range of fiscal and policy incentives for businesses under the Karnataka Industrial Policy 2020-25, with simplified procedures for investment. Through the ESDM Policy 2017-22, the Government of Karnataka plans to facilitate, promote and develop the ESDM sector in Karnataka and make the state a preferred destination for investment in this sector. 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 land).
Key Sectors
- As of March 2022, the state had an installed power generation capacity of 30,577.59 MW. Of this, central utilities contributed 4,047.70 MW, private utilities (17,684.41 MW) and state utilities (8,845.49 MW).
- In May 2022, the Karnataka Government announced the new ‘Karnataka Renewable Energy Policy’ for the 2022-27 period. The policy intends to position Karnataka as a preferred renewables investment location and to build a sustainable and green energy-friendly economy.
- As per the State Budget 2022-23, Rs. 12,226 crore (US$ 1.57 billion) has been allocated for the energy sector. Out of this, Rs. 9,419 crore (US$ 1.21 billion) has been allocated to provide subsidies to the Karnataka Power Transmission Corporation Limited.
- In FY22 (till January 2022), Karnataka produced 33.91 million tonnes of iron ore, which was an 18.80% growth YoY.
- Total export value of iron & steel from Karnataka in FY22 (till February 2022) was US$ 2.22 billion.
- On December 19, 2020, Minister of Road Transport & Highways, Mr. Nitin Gadkari, inaugurated and laid the foundation for 33 national highway projects in Karnataka. These projects include 1,197 km long roads worth Rs. 10,904 crore (US$ 1.48 billion).
- In December 2020, the Karnataka government approved investments of Rs. 22,419 crore (US$ 3.18 billion) of three different proposals involving electric vehicles (EV) and lithium-ion battery manufacturing with the potential to create nearly 5,000 new jobs.
- Karnataka has emerged as the information technology (IT) hub of India. Export of electronics and computer software from the state reached US$ 81.4 billion in FY20 and US$ 38.8 billion in FY21 (until November 2020), respectively. Export of electronics and computer software accounted for 85% share in Karnataka’s overall exports.
- More than 60% of the biotechnology companies in India have a base in Bangalore and the state drives 50% of the total revenue in India’s biotechnology sector.
- The Information Technology, Electronics and Communication department of the state has established a new IoT policy within the state with a view to attain a substantial market share in India’s IoT market by 2020.
- Karnataka is the first state which came out with an aerospace policy in the country. The Karnataka Aerospace Policy has identified an investment potential of US$ 12.5 billion in this sector during 2013-23 and plans to develop aerospace clusters in different regions of the state. The Karnataka Government has granted approval for investment of Rs. 480 crore (US$ 68.67 million) to Goodrich Aerospace Service Pvt Ltd to establish a unit in Bengaluru.
FACTFILE
Capital
BengaluruGeographical Area (sq km)
192,000State Language
Kannada, Tulu, Kodava, Hindi and EnglishLiteracy Rate
75.6 per centKey Industries:
IT and ITeS
Biotechnology
Engineering
Electronics and telecom
Automotive
Textiles and apparel
Aerospace
Animations
Tourism
Renewable energy
Related News
MOREPartners
