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Karnataka, home to the “Silicon Valley of India” is one of country’s most advanced and innovation-driven state. This state leads in sectors like IT, aerospace, defence, electronics, and biotechnology. With its consistent economic performance and global business appeal, this state has positioned itself as India’s most dynamic option for those seeking business opportunities in India.
For FY 2024-25, Karnataka ranked first compared to other Indian states in per capita income. This reflects its strong industrial base and diverse growth. MB Patil, Minister for Large and Medium Industries, opined, “Karnataka has India’s largest startup ecosystem with over 50% of the country’s unicorn valuation. We are an undisputed leader in R&D, with 44% of India’s total capacity and over 850 global capability centres that drive cross-industry innovations.”
With the help of modern infrastructure, skilled talent, and proactive government policies, it has attracted various leading international investors looking for business opportunities in India.
Karnataka attracted around USD 6.62 billion in Foreign Direct Investment in financial year 2024-2025. As per the reports in The Economic Times, it became the number one state in attracting FDI surpassing Maharashtra. The success of the state in attracting foreign investment in India is backed by progressive policies, streamlined government, and a clear focus on innovation led growth.
1. Karnataka Industrial Policy 2025–2030:
This policy is designed to bring in close to 90 billion in foreign investment in India while creating nearly 2 million jobs over the next few years. It offers incentives such as capital subsidies up to 25% or PLI benefits of up to 2.5 % of net sales turnover for seven years.
The policy also focuses on sustainability by promoting renewable energy, greener operations, and integrated R and D and manufacturing setups.
MSMEs get strong support through a 30 % capital subsidy on fixed assets, full exemption from stamp duty, and electricity duty waivers. With logistics and warehousing receiving industry status, these sectors can now access a 20 percent capital subsidy and power-based incentives to improve supply chain capabilities.
2. Global Capability Centre (GCC) Policy 2024:
The state is actively inviting global companies to set up and scale their GCC operations by offering practical support such as rental assistance, power subsidies, and help with day-to-day operational needs. The policy targets a strong expansion of the GCC ecosystem by aiming for 1,000 centres by 2029. This growth is expected to create nearly 50,000 specialised jobs and strengthen Karnataka’s position as a hub for high value knowledge work.
3. Skill Development and Labour Reforms:
The state promotes workforce readiness through initiatives like Kaushalya Karnataka and Udyoga Mitra. These programs offer hands on training and industry linked skilling to meet global expectations. Alongside this, the streamlining of labour regulations has helped create a more transparent and business friendly environment for employers.
4. Karnataka Udyog Mitra:
Karnataka Udyog Mitra plays the role of the state’s single-window agency for investment facilitation. It guides investors through approvals, incentives, and project implementation processes, ensuring smooth coordination between government departments and industry.
Karnataka offers a strong infrastructure and connectivity to support large scale industrial growth with its two international airports and five regional airports, 47 national highways, and 145 state highways. It is also investing heavily to upgrade its road and rail networks. With its advanced highways to smart industrial parks, the state ensures efficient logistics and trade facilitation.
Chennai–Bengaluru Industrial Corridor: The CBIC is a major infrastructure project with which the government aims link key industrial regions of Karnataka with major production hubs in Tamil Nadu. Apart from supporting logistics and automotive manufacturing, the corridor also helps smaller ancillary units access larger markets. Tumakuru and Vasanthanarasapura are two locations where the state is actively developing land parcels, utility networks, and warehousing facilities to attract mid to large scale industries.
Japan Industrial Township: It is a 300 acres Japanese industrial park in Tumakuru that is a result of a long-term collaboration between Karnataka and Japanese industry bodies. The area is being developed in phases and is meant to offer clean, organised plots with reliable power, water supply, and common facilities. Many Japanese suppliers in electronics and machinery have shown interest because the location makes it easier to server both southern and western Indian without long transport delays.
Semiconductor and ESDM Cluster: Karnataka has gradually built a strong base in semiconductor design, thanks to the presence of global chip designers and engineering talent in Bengaluru. The new push includes attracting companies involved in packaging, testing, and specialised electronics manufacturing. Mysuru is also being promoted as a quieter, less congested alternative where firms can set up large facilities with lower land costs. The state expects this sector to grow sharply over the next few years as global companies look for stable supply chain locations.
Aerospace and Defence Manufacturing Zone: Zones in Devanahalli and Chamarajanagar have been created with specific requirements of aerospace and defence producers in mind, including testing facilities, precision machining support, and secure manufacturing areas. Several tier two and tier three suppliers are exploring these zones because they can work closer to large defence and aviation companies already operating in the state.
Bengaluru Suburban Rail and Metro Expansion: The expansion of the suburban rail network and multiple metro lines is slowly improving travel patterns across the city. Industrial zones on the outskirts, which earlier faced access issues, are now better connected. These upgrades help workers reach facilities on time and allow logistics operators to plan movements without depending fully on congested road routes.
Mysuru–Bengaluru Expressway: The new expressway has reduced the travel time between two cities and has helped business move good without any scheduling issues. Companies in the electronics, textiles, and food processing, which rely on frequent inter-city movements, are already reporting smoother operations. The corridor is also encouraging more firms to consider Mysuru as an expansion option since the connectivity gap has been reduced significantly.
Karnataka’s 320-kilometre coastline provides access to major maritime routes through ports like Mangaluru, Karwar, and Belekeri. The New Mangalore Port handles significant cargo volumes including petroleum, fertilizers, and container traffic. Expansion plans include developing minor ports and enhancing hinterland connectivity to boost export capacity. Coastal shipping and Greenfield port initiatives are also being explored to support upcoming industrial corridors and trade networks.
Karnataka stands out as a state where policy direction, infrastructure development, and industry readiness move in the same direction. Its ability to combine technology leadership with manufacturing depth gives investors access to both innovation and scale.
As India strengthens its global economic role, Karnataka remains one of its most reliable state level gateways for international businesses. Investors benefit not just from financial incentives, but from the stability of governance and future focused development. For companies looking for business opportunities in India, Karnataka offers continuity.
