‘Karnataka Aims to be a $1 trillion Economy in Six Years’

Posted By : Editor

Under the leadership of Dr. Murugesh R Nirani, Minister for Large and Medium Industries, Government of Karnataka, the state has been winning accolades in all industrial sectors through several achievements. Karnataka has emerged as one of the most attractive investment destinations in India due to the many progressive reforms of the government. Ever since he has come to power, Dr.Nirani has been successful in creating an entrepreneurial environment in the state, enhancing investment proposals through various pro-industry measures. The state’s pro-active policies and business-friendly measures resulted in the state attracting huge investments. Today, he has turned around the industrial sector that was hit by the pandemic and the state is aiming to become a $1 trillion economy in six years. Speaking to Aeromag, the minister talks about the how Karnataka has become a preferred destination for national and global investors and has remained a top recipient of FDIs inflows in India.

Karnataka is India’s leading investment destination, with multiple accolades to itself. These achievements include securing first rank in attracting investments since 2016, coffee production, Biotech production & exports, India Innovation Index etc. in India. The capital city Bengaluru is the world's 4th largest technology & innovation cluster. The state is first in Green Energy production with 63% of its installed capacity coming from renewable energy sector.

An able leadership has been decisive for the state in winning these accolades. Under the leadership of Dr. Murugesh R Nirani, Minister for Large and Medium Industries, Government of Karnataka, the state has emerged as one of the most attractive investment destinations in India due to the many progressive reforms of the government. The state’s pro-active policies and business-friendly measures resulted in the state attracting huge investments.

Dr. Nirani said that Karnataka has been able to support industries and attract further investments despite the challenging pandemic situation. Karnataka has successfully garnered more than Rs 1 lakh Crore worth investments since the beginning of the challenging pandemic situation in March’2020. During the first wave of COVID, Karnataka was one of the first states to lift the lockdown. This helped key industries such as Electronics, Aerospace & Defence etc. During the second wave of COVID, the ministry ensured that essential industries were allowed to operate during the lockdown.

Karnataka has positioned itself as a prime location for the Aerospace & Defence industry in India. The establishment of institutions and PSUs like HAL, NAL, DRDO, ISRO, and IISc created a strong ecosystem and as a result over the years, leading global players have set up their shops in the state. Karnataka was the first state to announce the Aerospace & Defence Policy. The state’s pro-active policies and business-friendly measures resulted in the state attracting huge investments.

“Elaborating further on Karnataka’s predominant position in the defence and aerospace sector, we have 25% of India’s aircraft and spacecraft industry is based in Karnataka. More than 67% of all Aircraft and Helicopter manufacturing for Defence services is done in Karnataka and it contributes to 65% of the country's aerospace-related exports. We are home to more than 2000 Small & micro-enterprises along with 70% of India’s supplier base which executes subcontracting work for the Defence PSUs,” Dr. Nirani said.

The state has wooed the business leaders to make investments in Karnataka by briefing them about the business ecosystem and excellent opportunities in the state. Karnataka is a leader in space and defence sectors and emerged as India’s biggest space cluster. “We are also the second biggest manufacturer of electrical machinery. We tried to attract more foreign investments in aerospace, defence, space, health, handloom, food processing, and other sectors,” the minister said.

The state has recently taken multiple bold measures to enhance the offering to companies. The New Industrial Policy 2020-25 released in Aug-2020, providing further thrust to key areas such as – Industry 4.0, advanced manufacturing, R&D - aimed at becoming an integral part of the global value chain. The policy also offers attractive financial incentives, such as an investment promotion subsidy of up to 2.25% of annual turnover for 6-10 years. Companies can avail of this subsidy up to 40-60% of the Value of their Fixed Assets.

“The Government of Karnataka has taken several measures to enhance investor friendliness in the state. Karnataka attracted 3rd highest FDI in India in 2020-21 at $7.6 Bn with 14% national share. We have enhanced Ease of Doing Business and relaxed labour laws creating a friendly working environment for both companies and employees. With comprehensive policy reforms, we continue to emphasize that we are a policy-driven state, an excellent investment destination, and hence deliver continuity in our promises to investors,” he said.

Recently, Karnataka took the lead to participate at the Dubai Expo early from October 15 to 21 to coincide with the celebration of Space Week. The state delegation to the Dubai Expo was led by Dr. Nirani along with strong participation from senior bureaucrats, business leaders, and start-ups. Business and investment promotion were the key focus areas for Dr. Nirani and the state as it hosted seminars on aerospace, defence, start-ups along with one-on-one business meetings and visits with leading global majors for investing in the state. 

“The highlight of the state visit to Dubai was its event Karnataka- Now & Beyond’, where it showcased the strength and opportunities of Karnataka to over 200 influential industrialists and business leaders in the Gulf region and beyond. As a result, Gulf Islamic Investment (GII), a leading UAE-based Shari’ah-compliant financial services firm with over $2 billion of assets under management announced an investment of 3750 crores in Karnataka, India to strengthen investment ties between India and the UAE,” the minister said.

With abundant opportunities, skills, and capacity to excel in the global export market, the State tops in software exports contributing to 40% of India’s exports and a leading player in manufacturing and trade exports. Karnataka has made a mark in aerospace, automobile, readymade garments, cotton yarn, silk, pharma, food products, minerals, marine products, handicrafts among others.

“Under the leadership of Chief Minister Basavaraj Bommai, the government is keen to make Karnataka a global manufacturing hub. The ministry is encouraging manufacturing companies and exporters to possess core competence, cutting-edge technology and become an integral part of global supply chains. We have been encouraging our industries including MSME sector, start-ups, and exporters with many sops in an attempt to make India self-reliant in every sector. Karnataka is working to become a $1 trillion economy in six years. Karnataka has the potential to become a $1 trillion economy in six years. The state has that kind of vision and I am sure we will reach our target of a $5 trillion national economy,” Dr. Nirani said.

In addition to the above initiatives, around 558316 jobs have been created with the presence of 965 major and medium industries functional in the state with an investment of 307558.21 crores. We aim to create more than 10 lakh jobs during GIM in Nov 2022. Karnataka is the first state in India to set up exclusive industrial parks dedicated to women in Mysuru, Dharwad, Kalaburagi, and Harohalli. This purpose will be served if women entrepreneurs take advantage of this initiative. Women should join hands with the government in driving industrial growth by taking up entrepreneurship and providing jobs.

“We are proud of the fact that today India has 13.5 – 15.7 million women-owned enterprises, representing 20% of all enterprises. Accelerating the quantity and quality of entrepreneurship towards such benchmarks can create over 30 million women-owned enterprises and this is not an impossible goal. We have the vision and passion to work towards our holistic goals that are set for 2022.  Our ministry is dedicated to meeting the goals of building a robust industrialized economy in Karnataka that will be a benchmark for other states in the country,” the minister.

In the past 2 years, the state has attracted Rs.78,264.25 Cr investment and 189351 employments. Karnataka has a policy-driven ecosystem with policies covering all major verticals of the Economy of Karnataka. Karnataka released Industrial Policy 2020-25 in Aug-2020, providing further thrust to key. Areas such as – Industry 4.0, advanced manufacturing, R&D - aimed at becoming an integral part of the global value chain.

The policy will focus on the development of key sectors such as Automobiles & Auto components, Pharmaceutical & Medical Devices, Engineering, and Machine Tools, Knowledge-based industries, Logistics, Renewable Energy, Aerospace & Defence, and Electric Vehicles. The objective is to attract investments worth Rs. 5 Lakh Crore and to create employment opportunities for 20 Lakh people in the next five years.

“Karnataka is planning to release the updated Aerospace and Defence Policy 2021-26 to attract Rs. 45,000 Cr investment and generate additional employment of 60,000 persons. Aerospace is developing the first large plug-and-play industrial park in Narsapura (near Bangalore) over 60+ acres to develop a 1.5 Mn sqft built-up area,” the minister said.