Digital Karnataka

Karnataka fostering the

DIGITAL WORLD
JOIN THE DIGITAL
REVOLUTION, POWERED BY
KARNATAKA.
India: 75 years of democracy - key achievements

100x rise in GDP; currently at USD 3.5 Tn

500x rise in per capita income; currently at USD 2,300
500x rise in total exports; highest ever exports of USD 660 Bn in 2021-22

Growth rate 8.7% 5th largest economy; 2nd largest working

(FY21-22) jumped 6 positions since 2012 population of 522 Mn with
median age of ~29 years

During pandemic, India witnessed V-shaped

Annual FDI doubled in last 8 years recovery; GDP contracted 24% in first quarter
(launch of Make in India in 2014); of the year before bouncing back to 20% in
USD 35 Bn to USD 84 Bn in a decade 4th quarter
Amrit Kaal: Vision 2047
Economy 2nd largest USD 32Tn

Per Capita Income 10X USD 20,000

Manufacturing GDP 15X USD 6.2Tn

Shri Narendra Modi
Hon’ble Prime Minister of India
Services GDP 13X USD 20Tn
“India is making policies
FDI 12X USD 1Tn keeping in mind the goals of
next 25 years. In this time
period, the country has kept
Exports 12X USD 8Tn
the goals of high growth and
saturation of welfare and
Human Capital Largest and Youngest Median age of 29 wellness”.
working population years ‘State of World’ address World
Economic Forum, 2022
Technology: Digitally Empowering Indian Society
India’s Scale and Speed

1.3 Bn people with

unique digital identity
1.3 Bn Internet Users
by 2030

#2 in Mobile phone users (1.2 Bn);

Smartphone users (750 Mn) 61% internet
penetration

#1 Fintech adoption rate

30x reduction in data cost; amongst lowest globally
$0.68 per GB

74 Bn digital transactions worth

USD 1.6 Tn in CY 2022
373 Mn Estimated Rural Internet Users

USD 1Tn digital economy by

FY 2025
 Karnataka GDP VISION (In USD Bn) by 2031-32

• Karnataka GDP to grow 3X by 2031-32 based on current

growth strategy​
• Karnataka is aiming to grow its GDP by 4X with a  special
plan being prepared to reach USD 1T​

Source: Base value of Karnataka GDP calculated based on 2021-22 figure of Karnataka Economic Survey 2021-22 and assumed 9.5% CAGR year on year basis ​
Karnataka – Stands Out…
Numero Uno to Remain Numero Uno?
KDEM
KDEM – A unique PPP model (In Asia) to grow the Digital Economy of the State
and the Country.

A Section 8 company with 51% equity with Industry and 49% equity with the
Government, with all OpEx supported by the Government.
“Karnataka will contribute $1
Organization designed as trillion to Indian economy by
BY THE INDUSTRY
2032”.
FOR THE INDUSTRY

To function to accelerate growth and investments of the IT, BT and S&T (Digital
Economy) sectors in Karnataka.

To harness the unlimited potential of the digital economy of Karnataka to

transform the lives of the people in the State.

Vision for New Karnataka: $ 300 Bn Digital Economy by 2027

CORE OBJECTIVES ASPIRATIONS

1. Knowledge bridge GSDP from Skilling

40%+ 2Mn+
Digital Economy Support
2. Promote Digital Industry

States GDP
3. Suggesting Policy Initiatives 10x Investment 5%+
from Startup

4. Attract Investments
Rural Innovation Hub
#1 of India
Increase the contribution
5.
of Digital Economy

FOCUS AREAS
KDEM – USP’s

Board of Directors comprises

Each Vertical is led by
01
of Industry Champions and
Government
02 Industry anchors

Cluster Aspirations & Vision

03 designed by Industry Leaders
Macro Strategy Themes – Vertical

Spoke Shore Strategy backed with Policy Benefits

Product Specific Clusters -Industry and Policy

Capital, Market, Mentorship at Doorstep

Karnataka Skill Connect Portal – ‘Jobs for All’

Product Development and SITI Cluster presence: Mysuru,

(Startup, Infra, Talent and Industry) Mangaluru, Hubballi-Dharwad-
Belagavi 
Beyond Bengaluru Mission

Aspirational Goals -
a. 15% of the company's presence in Clusters

HBD b. 10,00,000 New Jobs (Direct & Indirect)

c. 2 % of State GDP from Clusters
d. 10 B USD - Size of the IT Industry in Cluster
Mangaluru
e. Enabling establishment of 10,000 start-ups by 2030
f. Skill 2 Million people in the new emerging technologies (Digital
Mysuru
skills, VLSI Design, Cyber Security and AVGC etc.).
Bengaluru and Beyond

IT / ITES, BPM and GCC

Karnataka’s presence IT, BPM and GCCs

IT / ITeS & BPM GCCs

40% Companies 34%
33% Workforce 37%
IT / ITeS & BPM USD 64.6 bn Exports USD 11.5 bn* GCCs
40%
34%
IT / ITeS & BPM 2022 GCCs 2022
33% ► Number of companies: ~5,500 ► Number of GCCs: ~440
► Human capital: ~22.0 Lakh ► Human capital*: ~4.4
37%
(direct) Lakh
► Revenue*: USD ~13.5 billion ► Revenue*: USD ~11.5
(domestic) | USD ~64.6 billion billion
(exports)
GCC Landscape of Karnataka – Sectors & Geographies

GCC Domains in Bengaluru Markets driving GCC growth

1% 2%
6% 7%

6%

8% 39%
24%

8%

32%
69%

IT-BPM Engineering & Manufacturing

BFSI Professional Services
Healthcare & Pharma Telecom & Media
e-commerce Others Americas EMEA APAC
Vibrant GCC Ecosystem of Karnataka
IT, BPM and GCCs – way forward

IT, BPM & GCC pillars of

success to 2026

1 2 3 4 5 6 7

Special projects
Infrastructure
development

development

Ease of Doing
Outreach

Business
Pipeline

Talent

Policy
IT / ITeS & BPM in 2026^ GCCs in 2026^
► Number of companies: ~9,000 ► Number of GCCs: ~580
► Human capital: ~ 34.6 Lakh (direct) ► Human capital: ~5.8 Lakh
► Revenue: USD ~21.24 billion (domestic) ► Revenue: USD ~22.0 billion
| ~101.65 billion (exports)
Spoke-shore strategy for Beyond Bengaluru

Bengaluru became a popular destination for global companies to

setup their off-shore operations.

Now we have the Spoke-shore strategy where the hub is the base
and spoke is a footprint in one of the clusters. The spokes have
Hubballi Spoke
talent, infrastructure, shared services and full fledged IT services
model with the flexibility to scale up as required. Policy benefits are
available to companies to implement this strategy in Beyond
Bengaluru clusters.

KDEM will handhold companies through the whole process, which

Mangaluru Spoke
is the Spoke-shore strategy.
Bengaluru Hub
KDEM has developed an ecosystem in the clusters for
infrastructure and talent which connects with real estate Mysuru Spoke

developers and local colleges.

KDEM | Cluster Product Packs
Product Features
Availabilityof talent
Infrastructure
Accessibility
KDEM interventions available Hubballi Spoke
Academic profile of the city and talent landscape
Company footprints
Cost analysis

Each city product pack has a domain edge Mangaluru Spoke

Cyber Security in Mysuru Bengaluru Hub

FinTech in Mangaluru Mysuru Spoke
Artificial Intelligence in Hubballi
 Karnataka, the knowledge capital

52 1,77 100,000
234
UNIVERSITIES Ph.D.'s
ENGINEERING 7
COLLEGES
ITI's

100,000+ 20,000+ 10,000+

CHIP AUTOMOTIVE AERONAUTICAL
DESIGNERS ENGINEERS ENGINEERS

Large talent pool for the global industry

CLUSTER-WISE TALENT POOL
Mysuru Mangaluru HDB

20+ Engineering Colleges

Renowned Renowned Institutes
15+ 15+ Medical & Dental 10+
Engineering Colleges of Eminence
Collages

Engineering & Degree Engineering & Degree Engineering & Degree

~40k College students ~60k College students ~35k College students

Availability of Availability of Availability of

~30k IT Talent
~12k IT Talent
~14k IT Talent

Availability of Availability of Availability of

~25k BPM Talent
~10k BPM Talent
~30k BPM Talent

Application Dev. & Application 43 Engineering

~19k Maintenance ~10k Development & Maintenance 49 Diploma
- Top Available IT Skill 127 Degree College
 Beyond Bengaluru

Mysuru Cluster Mangalore Cluster Hubballi-Dharwad-Belagavi (HDB) Cluster

Focus
ESDM & Cyber Security FinTech Edu and Agri Tech
Areas

Existing
ecosystem
of
companies

Sectors Fintech, IT/ITES, AVGC, ESDM, Cyber Security, Agritech, AI/ML, Manufacturing, Food processing, Chemical,
Banking, Electronics, BioTechnology, HR, EdTech
 Beyond Bengaluru – Impact created last one year

Mysuru Cluster Mangalore Cluster Hubballi-Dharwad-Belagavi (HDB) Cluster

ESDM & Cyber Security FinTech Edu and Agri Tech

Recent
Addition

36+ Companies, Approx 4000 employment

Talent Pool-Cluster wise

Man-power hired in last 18 months

• IBM (300) • Niveus (600) • IMerit (200)

• Glowtouch (200) • Mindstack (25) • Five S (300)
• I-Socrates (50) • Cashfree (25) • IonIdea (100)
• HGS (50+) • Sacumen (25) • dhiomics (20), IMOS (20)
 Beyond Bengaluru
Hubballi – Belgavi - Dharwad
400+ Startups; 80+ Funded startups;
Accomplishments 65+ Trademarks registered; 4,500+
Jobs added; 90+ IPs file; 30%+
Women entrepreneurs; 5+ acquisitions
worth INR 1,500 Cr
Notable Stakeboat Capital, Y Combinator,
investors Sandbox Startups, Rebel Foods, Prime
Venture Partners, Indian Angel
Network
Primary
Foundry, Automobile, SaaS, Edtech,
sectors
Agritech, AI/Data Science
Docketrun, Labinapp, Careerboat,
Notable
Vayavyalabs, Ecomjetco, Cautomate
startups
• Cluster seed fund: INR 25 Cr
• Acceleration Network
Other
• Kalyana Karnataka: EDP  • Costs efficiency compared to Bengaluru-
initiatives
• Women Elevate
• Elevate
• Beyond Bengaluru Startup
Grid
Mangaluru
200+  Startups; 3,000 Top skills-Finance &
Accounting; 5,000 HR & Knowledge
Services;6,000 QA, Testing & IMS; 10,000
Application Development & Maintenance
(IT); 7,000 Software Products
CIIE.CO, Riidl.org, IndiaRF.com
Fintech, IT
Diya Systems, Novigo Solutions,
Semnox Solutions, Codecraft
Technologies
• End-to-end support for setting up an
IT/ITeS entity
25% for talent; 46% for infrastructure
• Government subsidies: 10% through
government subsidies
Mysuru
240+ Startups ;8,000 in Finance &
Accounting skills;11,000 HR & Knowledge
Services; 11000 QA, Testing & IMS; 19,000
Application Development & Maintenance
(IT); 13,000 Software Products
Ascent Capital, Startup India, JITO
Angel Network
Design Manufacturing (ESDM),
Cybersecurity, Enterprise Services,
Electronics System
Skanray, Sportiwe,
S3V vascular Technologies
INR 223,305 Revenue (2019-20)
• 15 industry sectors
• 10+ renowned academic institutions
• 88,000 total available talent pool
• 30%+ women entrepreneurs
• 120+ startups onboarded
• 230 ESDM companies
Karnataka : Leading Electronics Manufacturing
Mix of Electronics manufacturers, EMS providers, and component manufacturers in &
around Bengaluru
KDEM Services
End to End support

Talent
Mapping
Project
take-off Connecting to
Regular key people-
Policy Facilitation industry peer
Incentives groups &
talent

Land
Agree Allocation &
implementation Clearances
of Spoke-shore

Facilitating the
Proposal growth of your
submission business
through
provisioning
Discuss incentives that
Spoke- allow you to
shore operate with
greater
margins
SECRET SAUCE - KARNATAKA
 6 Pillars - Karnataka The Most Attractive Investment
Destination In India

Investor-friendly
policies with multiple financial 01 Readily available industrial
incentives to create favorable cost economics
02 eco-system including land
Highly skilled & trained
labor workforce, along with a robust 03
skill infrastructure and subsidies
Well connected to demand centers and
04 gateways with an efficient logistics
network
Ease
Revamped processes to facilitate
of doing business 05
well supported by World Class Social
06 Infrastructure
 Karnataka has Simplified the Application and Approvals Processes

Application to State High-Level Key approvals Commencement

Land allotment
Karnataka Udyog Mitra Clearance Committee to pre and post of commercial
and registration
for Project Approval approve project construction operations

Affidavit-based Clearance System (ABC)

implemented for improving EODB
Approvals were relaxed by
15 introducing a moratorium
Years long moratorium period
3 act
7 Departments covered
MORATORIUM PROVIDED FOR KEY TIME-
CONSUMING MANDATORY APPROVALS
• Building Plan approval
• Factory Plan approval
• Registration under the Contract labor
• Provisional NOC from Fire Dept.
• Tree Felling and Tree Transit permission
SINGLE WINDOW CLEARANCE FOR THE
REMAINING KEY APPROVALS
• Land Allotment and Possession
Certificate
• Consent for Establishment
• Consent for Operations
• Power and water connections
 Karnataka: A Power Surplus State With 63% Of Installed
Power Capacity In Renewables

Karnataka is the leader among all states in promoting 63% of Karnataka's installed capacity is in renewables which is
Renewable energy the highest in the country

• Renewable energy potential of 86.8 GW

• Largest market for solar power in the open
• access mode (3.6 GW)
• Best state1 for setting up a solar rooftop project according to
Ministry of New & Renewable energy
• Home to World's 2nd largest Solar Park in Tumkur
• Exceeded the target set for solar capacity under KN Solar
Policy '14-'21 (120% achievement of 6000 MW target)

Home to 400+ renewable energy ecosystem companies and multiple IPPs3

1. According to State Rooftop Solar Attractiveness Index – SARAL 2. Renewable purchase obligation 3. Independent Power Producers 4. Others
include Co-generation, Small Hydro and Biomass
 Labor Reforms

• Provision to avail 'Fixed term employment' to optimize labor capacity to cater to seasonality
• Recent amendments made to facilitate women's work timings in night shifts, between 7 PM to 6 AM
• Overtime limit per quarter increased from 75 to 125 hours with the amendments to the Factories Act
• Among the first few Indian states to introduce and implement labor reforms, ensuring convenience for
both employees and employers

…along with relaxed labor laws

• Partnership with Govt. training institutes can be provided, to tailor curriculum as per requirement
• Skilling subsidies can also be considered
Policy Enablers – IT Policy 2020 - 25
Category of
# Incentive/ Offering Incentive/ Offering

Reimbursement at the rate of INR 10/- per sq. ft. will be provided for IT/ITeS entities setup outside Zone 3 up to a
1. Rental Reimbursement maximum amount of INR 3 lakhs overall, and that of INR 1000/- per-seat to IT-ITeS

Financial support of up to 20% of Fixed Investment for Infrastructure (excluding the cost of land), subject to a ceiling of
INR 3 Crores, whichever is lower. This shall be applicable for a minimum occupancy rate of 60% by IT/ ITeS entities
2. IT Hubs/ Clusters (applicable in case of IT Hub/Cluster space being occupied by IT/ITeS entities) or for a minimum employment generation
of 500 in the IT/ITeS industry

Financial support of upto 33% of the Fixed Investment for Infrastructure (excluding the cost of land), with a ceiling of
Co-Working Spaces/ Plug INR 2 Crores, whichever is lower. This shall be applicable for a minimum built-up area of the co-working space being
3. & Play Infrastructure 15000 sq. ft. and a minimum occupancy rate of 60% by IT/ ITeS entities or for a minimum occupancy by 300
professionals in the IT/ITeS industry .

IT/ ITeS Entities shall be entitled to an exemption of 75% in Mysuru, Hubballi, Dharwad and Mangaluru, and 100% for
4. Stamp Duty Exemption all other Zones except Zone 3 as per the prevailing Karnataka Industrial Policy.

For all IT/ITeS entities outside Zone 3, at the rate of INR 2000 per employee per month for 2 years for all new
5. PF/ ESI Reimbursement employment(only applicable for technical manpower) created.

6. Power Tariff Concession Commercial Power Tariff for IT/ ITeS industry in the State.
Policy Enablers – IT Policy 2020
Category of
# Incentive/ Offering Incentive/ Offering

Single Window Karnataka Udyog Mitra (KUM), Department of Commerce & Industries acts as the Single Window Agency for clearance of
7. Agency IT/ ITeS proposals.

Quality Certification 50% reimbursement of cost of quality certification fee with an overall ceiling of INR 6 Lakhs (with maximum of 3 industry
8. Reimbursement standard quality certifications) for IT/ ITeS Entities, setup outside Zone 3.

Marketing Cost 30% of actual cost incurred including travel for international marketing through trade show/exhibition participation, up
9. Reimbursement to INR 5 lakhs per entity for IT/ ITeS Entities.

Patents Cost
10. Reimbursement Up to INR 2 lakh for domestic patents and up to INR 10 lakhs for international patents.

For R&D projects driven by domestic IT/ITeS entities (not applicable to Indian subsidiaries of foreign entities) in the
11. R&D Support domain of emerging and 5G technologies, matching grants (in collaboration with industry) of up to a maximum of 33% of
the total project R&D cost, or up to INR 1 crore, whichever is lower.
 Govt. of Karnataka provides special package of incentives for setting up
Semiconductor / OSAT unit as per the new ESDM incentives package
Additional incentives
PRE OPERATIONS SETUP POST OPERATIONS SETUP2
can be considered for
big projects for setting
up Semicon / OSAT unit
25% INR 1 per unit
Capital Investment Subsidy subsidy on land1 Production Linked
Power tariff subsidy
Incentive (PLI)
for 5 years
• Land at subsidized
20% subsidy on
25% 1% of annual rates
plant & machinery
subsidy on land1 turnover for 5 years • Built-to-suit, plug &
100% exemption play facilities
from electricity duty • …and more
20% subsidy on 20% subsidy on
plant & machinery plant & machinery
E-R&D policy recently launched by Karnataka
provides multiple incentives for R&D centers
Wide range of incentives provided under new E-R&D Policy

Digital Innovation for

Establishment / Expansion Fund to support Tech. Prototyping & Testing
Innovation labs 1
services/social
of MNC E-R&D Operations1 innovation infrastructure1
challenges

For Engineering R&D For Engineering For implementing For Engineering For Engineering
entities (GCC): R&D entities (GCC & agencies (KDM): R&D entities (GCC & R&D entities (GCC &
ESPs): ESPs): ESPs) & startups:
Rental reimbursement: • 40% of approved
• Grant of 40% of budget up to Rs. • Grant of 33% of • Funding of 80%
• 50% of rent (up to
approved R&D 50 Cr. per entity approved of approved
Rs. 2 Cr. or Rs. 1666 expenditure up innovation labs project budget
per employee) to Rs. 8 Cr. per budget up to Rs. up to Rs. 3 Cr.
entity 8 Cr. per entity per entity
​Recruitment assistance:
Up to Rs. 20 lakhs

​Investment subsidy: Additional support provided:

• To implementing agency (KDM) for evangelizing E-R&D capability by setting up Go & See
• 20% of investment
centers as well for hosting/participating in R&D events (up to Rs. 50 lakhs)
amount (up to Rs. 2
Cr.) • To Engineering R&D entities (GCC & ESPs) for internship program: Reimbursement of 50% of
intern stipend for 3 months up to Rs. 10,000 per intern per month

Note: Detailed applicable restrictions for each incentive category provided in the E-R&D policy; 1. For investment beyond Bengaluru Urban district
 Cluster Advantage – Numbers
Covers: Infrastructure, Talent ecosystem, Social Infrastructure, Policy Benefits,
compliances and over all P&L

Talent Costs Government subsidies

~25% Cost-Efficient than Bengaluru 10% through government subsidies

Hiring Cost Infrastructure Costs

- Lower cost to hiring ~46% Cost-Efficient than Bengaluru
- Access to talent

Overall impact on P& L : 25-30%

 Partners in Progress

Strategic
Fulfilment Event
Partner Management
 Delegates from India
1Bridge Proxelera
Agwiq Technologies Pvt Ltd Sacumen
Commit Services SenseGiz
Dbiz Silicon Road
DJ Interactive Solutions Pvt Ltd (Digital Jalebi) Skootr India
Elfzone Technologies Startup Connect
FalconX Third Eye Data
Farmonaut Technologies Private Limited TiE
First Meridian services Vaultedge Software.
Focus Engineering Velox
Holosuit Vidphone
iSocrates VMware
ITserve & many more...
Kaynes Technology
Kaynes Technology
Kyndryl
Mikro Grafeio
Nextwealth Entrepreneurs Pvt. Ltd.
NS Infotech
Printform
Prolim
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