Bengaluru, Doha, Qatar | The South Indian state of Karnataka has embarked on a major push for infrastructure development, logistics support for exporters, balanced economic growth and diversification and decongesting the city of Bengaluru with plans to have the second airport in Bengaluru, two more ports on the western coast and satellite cities.

Karnataka will soon announce the location of the second airport in Bengaluru, according to Karnataka Chief Minister’s political secretary Naseer Ahmed.

The location is still under consideration and earlier reports said potential locations include Kunigal, Ramanagara, Bidadi, and Harohalli. The government had conducted surveys to determine the most strategic site for the airport.

Speaking to the Media in Dubai during the NRI Invest Summit & Buyers’ Meet organized by the government of Karnataka, Naseer Ahmed said: “We coming out with the second international airport, the first airport is handling more than 30 million people per year and therefore there is need for a second airport. We are currently in the process of identifying multiple locations.”

Karnataka, India's innovation and economic powerhouse, is extending a pioneering investment opportunity to Non-Resident Indians (NRls) through the NRI Invest Summit & Buyers' Meet, marking the first-of-its-kind initiative by a state government aimed at attracting global investments from NRls.

The government is welcoming vendors and service providers to establish trade partnerships for Karnataka-based products and services, further enhancing business opportunities.

In collaboration with News Trail, a leading English daily published in Bengaluru and Qatar, the Government of Karnataka is focused on fostering economic growth and creating long-term value by welcoming international investments.

The Meet, organised in Riyadh and Dubai, provides a unique platform for NRls to explore Karnataka's thriving business landscape and tap into its vast potential.

For the first time, NRls are invited to invest in Karnataka's booming sectors with just a minimum investment of Rs 5 crore, making it a compelling opportunity for global investors looking to enter the Indian market.

The event featured high-level discussions, one-on-one interactions, and presentations from senior officials. Other prominent dignitaries included  Secretaries of the Finance, MSME, and Textile Departments, Managing Directors of Tourism, IT & BT, KSSIDC, KMF, Mysore Sandal Soap & Detergents, KSIC, and KHDC, as well as industrialists from KASSIA, Karnataka's leading MSME body.

“This is an exceptional opportunity to meet with Karnataka state representatives, explore hundreds of investment opportunities across various sectors, and forge trade partnerships that can help NRls establish a strong foothold in the Karnataka market. With abundant resources, a robust economy, and supportive government policies, Karnataka offers unparalleled prospects for global investors,” Naseer Ahmed said.

Dr PC Jaffer, IAS, Finance Secretary, government of Karnataka said: “In order to give more logistic support to exporters, Karnataka is planning to develop two more ports on the western coast, besides Mangalore port and Karvar port.

In the past 15 years, Bengaluru has seen huge growth. There is another challenge, where we need to develop satellite cities like the way Delhi has done.”

Ramandeep Chowdhary, IAS, Secretary to government, Commerce and Industries Department (MSME & Mines) said: “Karnataka is planning to develop a few satellite cities with integrated townships where every facility will be available.  It can be a free zone and certain portions can be designated as a special economic zone.  One is coming up in Bidadi, which is an integrated township. Another one is in Kolar gold fields.”

Another township is planned with focus on four areas: Knowledge, Innovation, Health and Research. Land is bring proposed for such a city where globally reputed institutions in these fields are attracted, offering incentives and facilities.

The industrial cities and satellite cities are aimed at decongesting Bengaluru.

“Under the visionary leadership of Karnataka Chief Minister Shri Siddaramaiah, the state has thrived as a global investment destination, witnessing remarkable achievements in industrial growth, fiscal performance and foreign direct investment. His focus on inclusive and progressive economic policies has bolstered Karnataka's position as one of India's most dynamic states,” said a press release.

Why   invest in Karnataka?

Karnataka is one of India's fastest-growing states, contributing 8% to India's GDP. Karnataka accounts for nearly 10% of India's manufacturing output and is home to industries such as IT, automotive, aerospace, and biotechnology, with a steady annual growth rate of over 10%. Karnataka has registered GSDP (Gross State Domestic Product) growth of 10.2% in FY 2023-24, surpassing the national average of 8.2%.

Karnataka has achieved fiscal performance in the first seven months of 2024-25, generating Rs 1,03,689 crore in revenue, achieving 53% of its annual target of Rs 1,96,525 crore across five major revenue departments - commercial taxes (GST), excise, mining, stamps and registration, and transport. Karnataka has climbed from third place in 2023-24, surpassing Gujarat, to second place in FDI inflows during the first quarter of 2024-25. The state attracted a total of $2.2 billion in investments in the first quarter, reflecting growing investor confidence in its progressive economic policies.

 World-class infrastructure

 Karnataka boasts state-of-the-art infrastructure, including world-class airports, ports, and logistics hubs. Bengaluru alone has one of the busiest airports in India, handling over 40 million passengers annually. The state's well-connected transportation network enables smooth movement of goods and services, giving businesses easy access to domestic and international markets.

With the second highest road density among major states, Karnataka is served by 13 major national highways. Karnataka also has one major port at Mangalore and nine minor ports in the state.

 Karnataka's growing role in Middle East trade expansion

 Over the past three years, India and Karnataka have maintained robust trade relations with Middle East countries, showcasing significant export growth. India's exports to the UAE rose from $28,044.91 million in 2021-22 to $35,625.09 million in 2023-24, while Karnataka contributed $1,591.52 million and $2,680.29 million, respectively, exporting mineral fuels, coffee and spices. Similarly, exports to Saudi Arabia reached $11,558.59 million in 2023-24, with Karnataka’s share at $414.15 million, featuring organic chemicals and coffee. The Middle East remains a vital market for India's diverse export portfolio, emphasising Karnataka's contribution across key commodities.

 A US consulate office was opened in Bengaluru, bringing much-needed relief to residents who previously had to travel to Chennai or Mumbai for consular services. This move is a significant step, addressing the growing demand in the region and fostering stronger ties between India and the U.S., resonating deeply with the local community.

 Favourable business environment

 Karnataka consistently ranks as one of India's top states for ease of doing business, according to the World Bank's "Doing Business Report 2022." The state offers various incentives, including capital subsidies, tax breaks, and export incentives, making it a preferred destination for foreign direct investment (FDI). Between October 2019 and September 2024, Karnataka received approximately $54.57 billion in FDI, accounting for about 20.8% of India's total FDI during this period.

 Thriving IT and startup ecosystem in Bengaluru - Silicon Valley of India

 Karnataka, home to Bengaluru, is a leading hub for startups and IT exports in India. In 2023-24, Karnataka's software exports surpassed Rs 4.11 lakh crore, with Bengaluru contributing significantly to this growth, accounting for 42% of India's total IT exports. The state's software industry has seen a 27% year-on-year growth, supported by initiatives like the Global Capability Centres (GCC) policy, which aims to establish 500 additional GCCs and generate 3.5 lakh new jobs.

Furthermore, the Bengaluru Tech Summit 2024 saw major collaborations under the Nipuna initiative, which focuses on skilling and workforce development, with plans to train 100,000 youngsters annually. This thriving startup ecosystem, combined with the state's efforts in innovation and workforce transformation, solidifies Karnataka's position as a key player in India's economic growth.

Skilled workforce

 Karnataka is renowned for its highly educated and skilled workforce, with over 1,800 engineering colleges and numerous top-tier educational institutions like the Indian Institute of Science (IISc) and Indian Institute of Management (IIM). The state produces more than 250,000 engineering graduates annually, making it a hub for talent across various industries.

Diversified sectors

Karnataka's economy is well-diversified across key sectors, such as Information Technology (IT), Biotechnology, Aerospace & Defense, Pharmaceuticals, Manufacturing, Food Processing, and Agriculture. According to the Karnataka State Industrial and Investment Policy, the state has identified high-growth sectors like clean energy, electric mobility, and advanced manufacturing, which offer lucrative investment opportunities.

MSMEs:

Karnataka is home to over 8.5 lakh Micro, Small, and Medium Enterprises (MSMEs), providing employment to more than 55 lakh people. This sector offers tremendous growth opportunities, with SMEs playing a critical role in driving local economies.

Tourism & Wellness

With 182.41 million domestic tourists, Karnataka was ranked fourth in the country, making it one of the most popular tourism destinations in India. In October 2024, the Karnataka State Cabinet approved a new tourism policy for 2024-2029. The policy aims to increase the number of domestic tourist visits to 480 million per year. The government has been actively investing in wellness tourism to attract more visitors.

IT, BT & Electronics:

Karnataka is a key driver of India's IT, BT and electronics sectors, with Bengaluru emerging as a global tech hub.

Textiles & Garments:

 Karnataka's textile and garment industry is a key contributor to the state's economy, with Bengaluru earning the title "Garment Capital" of India. The state is the second-largest producer of silk in India, accounting for 35% of the nation's silk production. Major locations include Bengaluru for garments, Mysuru for silk and Davangere for cotton textiles. The sector is a significant employer, supporting millions and driving export earnings. The textiles sector in Karnataka has seen investments worth Rs 4,292 crore, creating 36,457 new jobs, making it one of the fastest-growing segments in the state's economy.

 Subsidies & incentives

 The Karnataka government has rolled out several attractive incentives to attract investments. In addition to capital subsidies, the state offers tax incentives, land acquisition benefits, and skill development support.

To revive Karnataka's struggling industrial sector and attract significant investments, the state government is planning to introduce various incentives, including districtspecific and production-linked schemes, along with initiatives to create more employment opportunities for women.

Emphasising sustainable practices, the government is putting the final touches on its new Industrial Policy 2024-2029, set to be unveiled ahead of the 'Invest Karnataka' summit in January-February, 2025.

 FDI growth

Karnataka has been a preferred destination for FDI due to its pro-business policies. Karnataka stands second among 26 Indian states, attracting FDI inflows worth $54.57 billion from October 2019 to September 2024, contributing 20.8% to the national share. With the growing demand for IT and digital services, Karnataka remains a hotspot for global companies looking to expand into India.

Bengaluru remains top destination for GCCs

 Bengaluru continues to lead as the top destination for Global Capability Centers (GCCs), reaffirming its status as India's innovation hub. A recent report highlights that Bengaluru hosts over 400 GCCs, contributing significantly to the city's economy and employment. The city's robust infrastructure, skilled talent pool, and pro business policies attract multinational companies seeking to establish operational hubs. Notable sectors driving this growth include IT, financial services, and healthcare. With plans to double GCCs to 1,000 by 2029, Bengaluru is set to remain a global leader in fostering innovation and operational excellence for multinational firms.