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Karnataka: An Overview

Karnataka is one of the fastest growing states with a vast and diversified sectoral base. The

state has witnessed rapid and unparalleled growth across various sectors. Known as a Silicon

Valley of India, the States entrepreneurial spirit in Innovations and Research & Development

has been given recognition world over. Its rich natural resources, proactive Government

policies, talented work force and a strong economy have propelled the State to become a

preferred investment destination.

KARNATAKA FACT FILE

Area: 1,91,791 sq. km Population: 52, 850, 562 (All India Census 2001) Capital: Bangalore Literacy Rate: 66.6 per cent (76.1 per cent of males & 56.9 per cent of females) Religion: Hinduism, Islam, Christianity, Jainism, Buddhism Languages: Kannada, English, Hindi and other Indian languages Temperature: Min. 60 C; Max. 400 C Rainfall: varies from 50 cm to 350 cm Major Industries: IT Products, Softwares, Aeronautical Engineering, Electrical and

Computer Engineering, Steel, Aluminum, Textiles, Railway Products.

Source: Government of Karnataka

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Key Industries

The State has an illustrious history of successfully introducing several Industrial and

Technological initiatives. Today, Karnataka is home to 87 Fortune 500 Companies and more

than 700 MNCs.

Karnatakas biggest story is the growth of Information Technology (IT) / Information Technology

Enable Services (ITeS) led sector which accounts for more than 40 per cent of the Indias

Software export. This growth has primarily occurred in Bangalore and its environs though the

industry has now begun moving towards other centers such as Mysore, Mangalore and Hubli-

Dharwad.

Some of the key potential sectors identified for the investors are Information Technology(IT),

Bio-Technology, Nano Technology, Automobiles and Auto Components, Apparels, Minerals,

Food Processing, Aerospace, Oil Refining and Petro Chemicals, Tourism, Wellness Tourism,

Contract Research, R&D, Power Sectors, Infrastructure and many others.

The investment approvals in the state are shown in the following graph.

http://karnatakaindustry.gov.in/sectoral_advantages.html#Informationhttp://karnatakaindustry.gov.in/sectoral_advantages.html#Informationhttp://karnatakaindustry.gov.in/sectoral_advantages.html#Biotechnologyhttp://karnatakaindustry.gov.in/sectoral_advantages.html#Biotechnologyhttp://karnatakaindustry.gov.in/sectoral_advantages.html#Automobileshttp://karnatakaindustry.gov.in/sectoral_advantages.html#Automobileshttp://karnatakaindustry.gov.in/sectoral_advantages.html#Apparelhttp://karnatakaindustry.gov.in/sectoral_advantages.html#Apparelhttp://karnatakaindustry.gov.in/sectoral_advantages.html#Apparelhttp://karnatakaindustry.gov.in/sectoral_advantages.html#Automobileshttp://karnatakaindustry.gov.in/sectoral_advantages.html#Biotechnologyhttp://karnatakaindustry.gov.in/sectoral_advantages.html#Information

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Infrastructure Status

Land Availability

Karnataka Industrial Area Development Board (KIADB) is responsible for land acquisition and

development of the Land for Industrial Development. KIADB will create all basic amenities and

maintenance in the industrial areas. KIADB has identified 121304 acres of land to be acquired

under the Land Bank Scheme in the State. In view of this, KIADB has issued notifications to

acquire 83184 acres of land. KIADB has developed more than 120 industrial areas in the state.

The State is also committed to develop 1000 2000 acres of land in each district for facilitating

uniform industrial development in all the districts.

Physical Infrastructure

The newBangalore International Airportlinks the city to the important places in the World and

offers world class facility. The State has taken initiatives to develop Airports at Shimoga,

Hassan, Gulbarga, Bellary, Bidar and Bijapur. The expansion / up gradation of Mangalore,

Belgaum and Hubli airport are also envisaged.

Karnataka has a maritime coast line of 300 kilometers (kms) along the Arabian Sea with one

major port and 10 minor ports. The State has 3172 kms length railway track, 229600 kms of

road length and 3958 kms length of National Highways.

The State will make efforts to provide world class infrastructure like all weather road,

uninterrupted power supply, adequate water, warehouse & logistics facilities connectivity

through railways / ports etc.

Social Infrastructure

Karnataka is no. 2 in the Country in terms of attracting foreigners for Medical Tourism.

Available Resources

R&D Centre 103
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Universities 20

Engineering colleges 152

Medical, Dental, Ayurvedic & Unani Colleges 114

Industrial Training Institutes & Polytechnics 1391

International schools 13


Key PPP Projects

The State has planned for massive investment and a wide range of other initiatives in

Infrastructure to put industries on the fast track. Economic Survey 2010, ranked Karnataka as

No.1 in Public Private Partnership in Infrastructure Projects. Karnataka Government has

separate Infrastructure Development Department which is committed to develop the

infrastructure in the State.

The State Government has also set up aPublic Private Partnership (PPP) celland designated a

Secretary Level officer as PPP nodal officer of the State. Its prime function is to identify,

conceptualise and create a shelf of projects in consideration with the line departments and

recommend approval of suitable projects for implementation on PPP route. For more

information you may log on towww.idd.kar.nic.in.

Further, please click on the followinglinkfor the PPP projects in the state.

Industrial Clusters

Karnataka state is responding quickly to the dynamic economic conditions, changingdemands, changing technologies and continuously facilitating the industries to upgrade

their technology, products, R&D to sustain the rising competition. The state has initiated

to develop sector specific industrial zones / industrial clusters to harness local natural
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resources and to optimize its value addition. These zones are steel zones (Bellary,

Koppal, Bagalkot, Haveri, Gadag & Raichur Districts), Cement Zones (Gulbarga, Bagalkot,

Chitradurga, Belgaum) Food processing zones (Bangalore Rural, Kolar, Belgaum, Gadag,

Koppal, Shimoga, Bagalokot, Bijapur, Dvangere, Mandya & Dharwad) Information

Technology and Bio Technology Zones (Mysore, Mangalore, Hubli, Dharwad, Belgaum,

Shimoga, Gulbarga, Kolar, Mandya) Automobile (Ramanagara, Shimoga Dharwad, Kolar),

Readymade Garments zones (Bangalore Rural, Tumkur, Kolar, Mandya, Belgaum, Bidar,

Dharwad) Sugar & Co-gen Power zone(Bidar Belgaum, Bagalkot, Shimoga, Mandya),

Pharmaceutical & Bio Technology zone (Bangalore, Mysore, Hassan) Power Generation

zone (Raichur, Bellary, Bijapur, Chitradurga) Media and Entertainment (Bangalore Rural,

Ramanagara).

The food processing parks are established at Malur, Bagalkot, Hiriyur and Jewargi. The efforts

are being taken to set up such parks at potential locations.

Special Economic Zones (SEZs)

The State Government has announced a State Policy for SEZs-2009 as per Central SEZ Act 2005

and Rules 2006, with a view to provide a hassle free environment for export production and to

attract FDI. The Salient features of State Policy for SEZs-2009 are as below:

Single Point Clearance to SEZ developers & Units Facilitate and expedite establishing of SEZs. Delegation of Labour Commissioner powers to Development Commissioner of SEZ Attractive Fiscal Benefits Monitoring and Review Committee has been constituted to monitor and review

implementation of SEZs under the Chairmanship of Chief Secretary.

The Karnataka State ranks no. 4 in terms of approvals for SEZ projects. 56 SEZs are approved and 20

SEZs are operational and the remaining is under implementation. The total exports as on March 31,

2011 is Rs. 38104.00 crore from SEZs in Karnataka.

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Sector wise SEZ approvals

1. IT/ITES SEZs - 452. Bio-Technology SEZs - 033. Sectors specific product SEZs - 074. Airport based SEZ - 01

Special Facilities for NRIs / PIOs

The Karnataka state has constituted NRI Forum Karnatakato provide value added services to

the Non Resident Indians. The NRI Forum Karnataka has been formed to forge a symbiotic

relationship between Karnataka and its Diaspora. The forum will provide information on socio

economic activities on Karnataka state and its development and also co-ordinate investments in

the state across all potential sectors.

For more information, log on towww.nriforumkarnataka.org

State Policies & Incentives of the State

Karnataka Industrial Policy 2009-14 announced a number of measures related to building

prosperous Karnataka through development of human and natural resources in a systematic,

scientific and sustainable manner.

Policy measures

Stream lining land acquisition through Inclusive Development. Efficient management of Industrial areas or Estates Measures to provide Quality Infrastructure Emphasis on Skill DevelopmentIncentives and concessions
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Investment promotion subsidy to MSMEs Exemption from Stamp Duty at concessional registration charges. Waiver of Conversion Fine Exemption from Entry Tax Incentives for Export Oriented Units (EOUs) Exemption from APMCs Cess / fees Subsidy on setting up of ETPs Interest fee loan on VAT for large and mega projects Anchor Unit Subsidies Special incentives for Enterprises in low HDI Districts Exemption from Electricity Duty

Incentives extended to SEZ Developers & Units under State Policy of SEZ 2009

Exemption from State Taxes for all purchases (excluding Petroleum Products) fromDomestic Tariff Area

Exemption from Stamp Duty Exemption from Electricity Duty. Capital subsidy for Common Effluent Treatment Plant

Incentives for FDIs

Karnataka ranks third in attracting Foreign Direct Investment (FDI) among the states in India.

Consistently attracting foreign direct investment, the States percentage share to the total

inflows in to the country in terms of USD was 6 per cent between April 2000 May 2011. The

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cumulative inflows into Karnataka from April 2000 to May 2011 was approximately Rs

38,556.00 crores.

Availability of Finance

Karnataka State Finance Corporation(KSFC) provides financial assistance to the Industrial Units

established in Karnataka. KSFC is one of the fast track term lending financial institutions in the

country providing assistance to over 1,63,643 units amounting to nearly Rs 10,465 crore over

the last 52 years in the State of Karnataka. KSFC is one of the robust and professionally

managed State Financial Corporations.

Karnataka is known as the Cradle of Banking in India. Seven of the Countrys leading banks viz.,

Canara Bank, Syndicate Bank, Corporation Bank, Vijaya Bank, State Bank of Mysore, Karnataka

Bank and Vysya Bank were initiated in the State of Karnataka.

Business Opportunity

Single Window

Karnataka Udyog Mitra (KUM) is a single - contact point for all investors who are looking at

setting up businesses in Karnataka. As the Nodal Agency, its role is to facilitate investments and

execute initiatives to enable a smooth transition, from receiving an investment proposal to the

eventual implementation of the project.

KUM acts as a facilitator between State High Level Clearance Committee (SHLCC) for projects

above Rs.50 crores (US$) and State Level Single Window Clearance Committee (SLSWCC) for

projects between Rs.3 to 50 crores (US$).

Special agencies to facilitate Industrialisation

Karnataka State Investment and Industrial Development Corporation(KSIIDC) is whollyowned by the Government of Karnataka and has been established with the main
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objective to act as a catalyst for promoting industrial growth in the state especially in

the medium and large-scale sectors. It is the designated agency of the State

Government to plan and promote industrial infrastructure development projects.

Karnataka State Electronics Development Corporation (KEONICS) has been established(in September 1976) to promote and develop electronics industry and allied activities in

the State. KEONICS has been recognized as a Nodal Agency of the Government of

Karnataka for the promotion of IT and IT enabled services and development of IT

infrastructure, IT Parks, IT cities, and IT related activities in the State.

Investment Opportunities

Karnataka is one of Indias fastest growing regions, offering trade and investment opportunities

to diverse sectors such as mineral based industries, information and communication

technology, bio-technology, medical instrumentation, tourism, etc. The focus sectors are:

1. Information Technology Indias preferred IT destination with over 2025 ITcompanies and Global outsourcing hub for IT & ITES

Government Initiatives:a. IT Investment Region proposed near Devanahalli, Bangaloreb. Exclusive industrial areas for IT / ITES & Hardware Park near Devanahalli,

Bangalore

c. IT Parks at Hubli, Shimoga and Gulbarga; IT SEZ Park at Shimoga establishedand future IT Parks at Mysore, Mangalore and Belgaum planned by

Karnataka State Electronics Development Corporation Limited (KEONICS)

2.

Bio-Technology and Nanotechnology

a. Leading the Biotechnology revolution, and attracting large investmentsb. 197 of 320 Domestic Biotech Firms in India are in Karnataka and out of

which 172 are in Bangalore.
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c. Major Biotech players and Exporters: Sami Labs, Biocon, Sartorius, Aurigene,Astra Zeneca, Strand Genomics, Metahelix, Avesthagen, Sigma Aldrich,

MWG, Boivet, Bangalore Genei and Kewaunee Labway.

Government Initiatives:

a. 106 acres Bio-Tech Park near Electronic City, Bangalore.b. Pharma Special Economic Zone (SEZ) at Hassan.

3. Automobiles and Auto Componentsa. Manufacturing hub for Auto majors like Volvo, Toyata Kriloskar, TVS Suzuki,

Telco, L&T Komatsu, BEML and Auto Component companies like BOSCH,

Delphi, Denso, Yuasa, Siemens, Escorts, Federal Mogul & Rane.

4. Apparela. Sourcing hub for International Apparel Brands like Nike, Tommy Hilfiger,

GAP, Wal-Mart. Over 300 manufacturing units in the State.

b. Currently employs about 6 lakh peopleGovernment Initiatives:

a. Sector Specific Special Economic Zone (SEZ) for textiles at Hassan.b. Textile Park at Doddaballapur, Bangalore Rural District.

5. Minerals - Abundant mineral resources Precious Metals like Platinum,Multicoloured Granite, Limestones among others


a. Government has brought out a New Mineral Policy which focuses on Valueaddition

6. Food Processing Vast Agriculture and Horticulture resources of the State serve asraw material for a wide range of food processing industries; and it is the only State

blessed with 10 agro-climatic zones and nine distinct soil types, ideal for growing

virtually any agriculture or horticulture crop.


a. International Flower Auction Board in Bangalore, facilitating Flower Export.

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b. Food Parks at Malur and another 5 food parks on the anvilc. Food Processing SEZ at Hassan

7. Aerospacea. Indian Aerospace Industry to cross US $100 billion mark in the next 20 yearsb. State has an ideal Eco-system for Aerospace Industries. Several reputed

Aerospace Organizations like HAL, NAL, ISRO, DRDO, ADA, DARE, CAIR & BEL

are located in Bangalore

c. Presence of Global R&D giants BAE Systems, Boeing, Rolls Royce,Honeywell, Snecma, General Electric and Turbomeca which in turn enhance

the States competency in design, production and maintenance


a. Exclusive Aerospace SEZ near Devanahalli, Bangalore which also includes anSEZ for Aerospace Components

b. Indias first Aerospace SEZ established at Belgaum8. Oil Refining and Petrochemicals

a. Mangalore Refineries & Petrochemicals Limited the first joint venture OilRefinery in India


a. An exclusive SEZ for Petroleum and Petrochemicals at Mangalore isestablished.

9. Tourisma. Ranks fourth most popular tourist destination among the States of Indiab. Major attractions include Mysore Palace, Bijapur Gol Gumbaz, erstwhile

Vijayanagara capital Hampi, Belur Halebidu sculptures, Shravanabelagola

Bahubali and Gerusoppe Jog Falls.


a. Recent initiatives include introduction of The Golden Chariot, a luxurytrain connecting popular tourist destinations in Karnataka and Goa

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10. Wellness Tourisma. Largest number of Doctors, Nurses and Paramedical staff pass out every

year from the State Universities.

b. Ample scope for Healthcare Industry to be driven by Software and Robotics11. Contract Research / R & D

a. Vast pool of Scientific and Technical manpowerb. An emerging hub for Collaborative and Outsourced R&D in Drug

Development, Biotechnology and Chemicals

c. Research and Development facility set ups by several Fortune 500companies, such as GE, GM, Intel, Texas Instruments, Motoral, SAP, Astra

Zeneca, Microsoft, Philips, Cisco, Oracle, AMD, IBM and Daimler Chrysler

12. Power Sectora. Encouragement to Renewable Energy Sectors Wind Power, Solar Energy,

Mini / Small Hydro projects, Cogeneration in Sugar Industries, Biomass /

Biogas under Waste to Energy concept

13. Infrastructure SectorKarnataka provides plenty of opportunities for Investors in sector such as Energy,

Roads, Railways and Ports.


a. Government has initiated steps to implement infrastructure projects boththrough public funding and through Public Private Partnership (PPP) model.

b. Government has come up with an Investor Friendly Infrastructure Policy2007

Key Policy Updates

The Karnataka Government apart from announcing Karnataka Industrial Policy 2009-14, has

also brought out several policies and it is a constant endeavor to make Karnataka as the most

investor friendly state in the Country. Some of these policies are:

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Karnataka Industrial Policy 2009-14 Karnataka Industries (Facilitation) Act 2002 State Policy for SEZ 2009 Information & Communications Technology Policy 2011 The Millennium Bio Tech Policy II Infrastructure Policy 2007 Textile Policy 2008-13 Integrated Agri Business Development Policy 2011 Karnataka Mineral Policy 2008 Karnataka Tourism Policy 2009-14 Karnataka Grape Processing & Wine Policy 2007 Karnataka Renewable Energy Policy 2009-14 Karnataka Semiconductor Policy 2010 Electronics Hardware Policy

For more information, please contact:

The Principal Secretary

Government of Karnataka

Commerce & Industries Department

#106, 1st

Floor, Vikasa Soudha, Bangalore 560 001, India

Ph: +91 80 2225 2443

Fax: +91 80 2225 9870
http://www.advantagekarnataka.com/pdf/industrial_policy.pdfhttp://www.advantagekarnataka.com/pdf/industrial_policy.pdfhttp://dpal.kar.nic.in/.%5C45%20of%202003%20(E).pdfhttp://dpal.kar.nic.in/.%5C45%20of%202003%20(E).pdfhttp://www.sezindia.nic.in/writereaddata/statePolicies/sez%20operational%20guidelines%202.pdfhttp://www.sezindia.nic.in/writereaddata/statePolicies/sez%20operational%20guidelines%202.pdfhttp://www.bangaloreitbt.in/pdf/Informanton&CommunicationsTechnologyPolicy.pdfhttp://www.bangaloreitbt.in/pdf/Informanton&CommunicationsTechnologyPolicy.pdfhttp://www.bangaloreitbt.in/worddocument/pdf/Biotech_Policy_II.pdfhttp://www.bangaloreitbt.in/worddocument/pdf/Biotech_Policy_II.pdfhttp://idd.kar.nic.in/infrastructure.htmhttp://idd.kar.nic.in/infrastructure.htmhttp://www.textiles.kar.nic.in/textpolicy.htmhttp://www.textiles.kar.nic.in/textpolicy.htmhttp://www.karnataka.gov.in/Documents/Integrated-AgriBusiness2-RN-8pm.pdfhttp://www.karnataka.gov.in/Documents/Integrated-AgriBusiness2-RN-8pm.pdfhttp://mines.kar.nic.in/kmp.pdfhttp://mines.kar.nic.in/kmp.pdfhttp://advantagekarnataka.com/pdf/Policy%20brochure.pdfhttp://advantagekarnataka.com/pdf/Policy%20brochure.pdfhttp://www.nriforumkarnataka.org/policy/Karnataka%20Grape%20Processing%20and%20Wine%20Policy.pdfhttp://www.nriforumkarnataka.org/policy/Karnataka%20Grape%20Processing%20and%20Wine%20Policy.pdfhttp://www.zpkarwar.kar.nic.in/krepIndex.htmhttp://www.zpkarwar.kar.nic.in/krepIndex.htmhttp://www.bangaloreitbt.in/worddocument/pdf/semiconductor%20brochure.pdfhttp://www.bangaloreitbt.in/worddocument/pdf/semiconductor%20brochure.pdfhttp://www.bangaloreitbt.in/pdf/ElectronicsHardwarePolicy.pdfhttp://www.bangaloreitbt.in/pdf/ElectronicsHardwarePolicy.pdfhttp://www.bangaloreitbt.in/pdf/ElectronicsHardwarePolicy.pdfhttp://www.bangaloreitbt.in/worddocument/pdf/semiconductor%20brochure.pdfhttp://www.zpkarwar.kar.nic.in/krepIndex.htmhttp://www.nriforumkarnataka.org/policy/Karnataka%20Grape%20Processing%20and%20Wine%20Policy.pdfhttp://advantagekarnataka.com/pdf/Policy%20brochure.pdfhttp://mines.kar.nic.in/kmp.pdfhttp://www.karnataka.gov.in/Documents/Integrated-AgriBusiness2-RN-8pm.pdfhttp://www.textiles.kar.nic.in/textpolicy.htmhttp://idd.kar.nic.in/infrastructure.htmhttp://www.bangaloreitbt.in/worddocument/pdf/Biotech_Policy_II.pdfhttp://www.bangaloreitbt.in/pdf/Informanton&CommunicationsTechnologyPolicy.pdfhttp://www.sezindia.nic.in/writereaddata/statePolicies/sez%20operational%20guidelines%202.pdfhttp://dpal.kar.nic.in/.%5C45%20of%202003%20(E).pdfhttp://www.advantagekarnataka.com/pdf/industrial_policy.pdf

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E-mail:[email protected]

www.karnatakaindustry.gov.in

URL:www.kumbangalore.com

The Commissioner for Industrial Development & Director of Industries & Commerce

2nd

Floor, South Wing, Khanija Bhavan

Race Course Road, Bangalore 560 001, India

Ph: +91 80 2238 6796

Fax: +91 80 2238 9909

E-mail:[email protected]

URL:www.karnatakaindustry.gov.in

www.kumbangalore.com

The Managing Director

Karnataka Udyog Mitra (KUM)

(A Government of Karnataka Organisation), 3rd

Floor

East Wing, Khanija Bhavan, Race Course Road, Bangalore 560 001, India

Ph: +91 80 2228 2392; 2228 5659; 2238 1232; 2228 6632

Fax: +91 80 2226 6063

E-mail: md@ kumbangalore.com


The Resident Director

Karnataka Udyog Mitra (KUM)(A Government of Karnataka Organisation), Bheema, Karnataka Bhavan, Room No.209 & 210

Khel Gaon Road, HUDCO Place, Andrews Ganj, New Delhi 110 049, India

Telefax: +91 11 2626 3109; 2626 3110

E-mail: rd@ kumbangalore.com
mailto:[email protected]:[email protected]:[email protected]://www.karnatakaindustry.gov.in/http://www.karnatakaindustry.gov.in/http://www.kumbangalore.com/http://www.kumbangalore.com/http://www.kumbangalore.com/mailto:[email protected]:[email protected]:[email protected]://www.karnatakaindustry.gov.in/http://www.karnatakaindustry.gov.in/http://www.karnatakaindustry.gov.in/http://www.kumbangalore.com/http://www.kumbangalore.com/http://www.kumbangalore.com/http://www.kumbangalore.com/http://www.kumbangalore.com/http://www.kumbangalore.com/http://www.kumbangalore.com/http://www.karnatakaindustry.gov.in/mailto:[email protected]://www.kumbangalore.com/http://www.karnatakaindustry.gov.in/mailto:[email protected]

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