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Karnataka: Knowledge, research and innovation hub of Asia, with high-end R&D centres of over 400 MNCs 

Karnataka is a leading producer in various sectors such as auto components, machine tools, and heavy electrical machinery. The state has the presence of state-of-the-art 405 ha aerospace park with a 102 ha aerospace SEZ, and research centres such as National Aerospace Laboratories, Indian Space Research Organization, etc. With a strongly-performing agriculture sector, Karnataka boasts to be the largest producer of areca nut, pomegranate, rose-onions and various spices and aromatic plants. There are seven food parks and dedicated parks for spices, seafood and rice, along with India’s first and only flower auction centre. Karnataka is expected to become largest IT cluster globally by 2020, employing 2 mn professionals. The state is the knowledge hub for biotechnology industry with the presence of premiere biotech educational institutions and training centres. Karnataka is home to one of the world's largest solar park at Pavagada in Tumkur, with a capacity to generate 2,000 MW power. The state ranked 4th in terms of FDI inflow in India during 2000-17. 

Karnataka offers connectivity to the biggest national and international markets via air and sea, owing to two international airports and one major port at Mangalore as well as ten minor ports. The state has the 2nd highest road density among top 10 largest states in India

 

Key upcoming projects include:

  •  IT Investment Region (ITIR) of area 4,258 ha, near international airport, expected to bring in USD 20 bn and create 1.2 mn direct and 2.8 mn indirect jobs     
  •  Mega Textile Zone in 405 ha of land in Yadgir district     
  •  Machines Tool Park in more than 120 ha of land in Tumkur district   
  •  Development of Tadadi port and two other greenfield ports at Belekeri and Pavankurve     
  •  Smart Cities Mission, for which Bengaluru, Mangalore, Belagavi, Shimoga, Hubli-Dharwad, Tumkur and Davangere are the cities identified in Karnataka     

Key upcoming industrial corridors:

  •  Chennai Bengaluru Industrial Corridor passes through Karnataka, with a National Investment and Manufacturing Zone in Tumkur     
  •  Industrial corridor in Tumkur to be developed at USD 2,286 mn     
  •  Bengaluru Mumbai Industrial Corridor, with first industrial node in Dharwad

Highlights

  • Largest software exporter in India
  • Largest producer of gold in India
  • Largest producer of coffee in India
  • GSDP (Current price)

    USD 169 bn (2016-17)

  • GSDP growth rate (YoY)

    11% (2016-17)

  • Per capita income

    USD 2,347 (2016-17)

  • FDI inflow

    USD 25 bn (2000-17)

Demographics

Karnataka is the 8th most populated state in India, with about 5% of its total population.

The total population of Karnataka is 61 mn, which is equivalent to the population of Italy. 

About 66% of the total population of the state lies in the working age group of 15-59 years.

  • 39%

    Urbanisation rate

  • 973

    females/ 1000 males

Skilled manpower
  • Central universities

    1

  • State universities

    25

  • Private universities

    15

  • Engineering colleges

    206

  • Management colleges

    255

  • Polytechnic institutes

    295

  • Medical colleges

    55

Key Sectors

Karnataka attracts 65% of the aerospace investments in the country. The state government has established a 405 ha aerospace park with a 102 ha special aerospace SEZ at Devanahalli near Bengaluru international airport. It is also in talks with Aequs Pvt. Ltd. to set up country’s first private aerospace and precision engineering SEZ in Belagavi.

Ten agro-climatic zones with 6 soil types make Karnataka conducive to grow a large variety of crops. There are 7 food parks, a spice park and a seafood park established in the state along with the upcoming rice technology park. The state also has 2 mn MT installed warehousing capacity and 300,000 MT of cold storage. It is also the second largest producer of horticulture crops - grapes, pomegranate and tomato in India.

Karnataka, being the largest software exporter from India, is home to 3500 IT/ITeS companies including 750 MNCs providing 1 mn direct and 3 mn indirect jobs in the state. Nearly 80% of Fortune 500 companies have their outsourcing operations in the state capital. The state is also home to 50% of world’s SEI CMM level 5 certified companies. As of September 2017, there are 19 SEZs operating in the IT sector in Karnataka.

The state offers 60 campuses with 2000 working professionals and another 20 training institutes with 10,000 students. Bengaluru-based companies have contributed to Academy Award winning movies such as Life of Pie, Harry Potter and Pirates of the Caribbean. The state government has started 3 initiatives for skill development in association with the Association of Bangalore Animation Industries (ABAI).

Karnataka is the fourth largest state in automotive production with output of USD 2.8 bn, contributing 8.5% to the national output. The automobile output has doubled in the last 4 years, registering a 36.5% CAGR. Currently, over 50 automobile component manufacturers are operating in the state.

Karnataka accounts for 60% of total biotech companies, which is highest in India. Bengaluru is a popular destination for biotech start ups – Criyagen Agri and Biotech and Anthem Biosciences operating in the state. Leading institutions viz. Indian Institute of Science (IISc.) and Institute of Bioinformatics and Applied Biotechnology (IBAB), with several success stories like Mission Mars and Raman spectroscopy, have set the base for existing and upcoming players in the sector.

Karnataka contributed 10% of the country’s electronic industrial output, and recorded a growth rate of 18% CAGR. Being home to 70% of India’s chip designers makes Karnataka the second largest chip design hub of India. The state has presence of 85 semiconductor design firms. Bengaluru city in Karnataka is the fourth largest technological cluster in the world.

Capital city Bengaluru contributes to about 60% of the country’s machine tools in terms of value, which is estimated at USD 332 mn. Karnataka’s share in heavy electrical machinery is the second highest in the country, constituting 12.5% of the total output. The special purpose machinery sector in the state has grown at 38% CAGR, exceeding even the country’s growth rate of 11%.

Major Investors