Karnataka has long been an economic powerhouse, often referred to as “sandalwood land” for its high quality sandalwood and its abundant reserves of India’s only active gold mine home. At its heart is Bengaluru, the state’s crown jewel and the country’s “Silicon Valley.”
The state hosts over 15,000 start-ups and hundreds of venture capital and corporate funding companies, with Bengaluru as the majority. Karnataka has stepped up to semiconductor manufacturing beyond its startup advantage, establishing it as a key player in India’s technology-driven growth.
As the state gathers global investors from February 12th to 14th (GIM 2025), 18 countries, MB Patil, Minister of Large Industry and Infrastructure Development, Karnataka government speaks to businesses today. Karnataka’s startup ecosystem, its investment environment, and global investor sentiment. Edited excerpt:
Q: Karnataka has been a magnet for investment in recent years. Can you elaborate on the key investments the state has recently secured and the sectors that attracted the most attention? How do these investments shape the economic landscape of Karnataka?
MB Patil (MBP): Karnataka has secured significant investments in several high-growth sectors and strengthened its position as one of India’s leading industrial and innovation hubs. The state has earned investments of more than Rs 115 lakh since April 2023 (Single Window Approved Investment), and industries such as electronic equipment manufacturing, renewable energy, electric vehicles, aerospace and infrastructure development. It covers the following.
FOXCONN: Rs 22,000 crore for establishing an iPhone assembly unit on a 300 acre site.
JSW Energy: 4,960 crore for a 600 MW prisoner wind power plant.
Toyota Kirloskar: Rs 3,700 for expansion of manufacturing facilities and related operations.
exide:rs. 4,000 crores to set up GigaFactory
Hero Future Energy: 11,000 crores across projects of renewable energy, green hydrogen and its derivatives
Air India: 1,750 crore for installing cutting-edge MRO (maintenance, repair, overhaul) facilities.
Sansera: Rs. 2,150 cr. For the manufacture of automotive components
Furthermore, Karnataka will announce most important confirmed investments within GIM.
Karnataka also has a robust pipeline of investment leads of over 1,000 Rs across a variety of high-growth sectors, further strengthening the state’s industrial ecosystem.
PA: The startup ecosystem in Karnataka, particularly Bengaluru, is often referred to as Silicon Valley in India. How crucial is this ecosystem in the state’s broader economic strategy? Are there any forecasts for the number of new startups expected to emerge in Karnataka over the next five years?
MBP: Karnataka stands as one of India’s most powerful startup ecosystems and leads the country in innovation, technological advancement and entrepreneurial activities. With over 15,000 active startups and over 40% of Indian unicorns living there, the state has become a global hub of innovation.
This thriving ecosystem is supported by a robust network of over 1500 venture capital and corporate venture funds, as well as over 15,000 angel investors, and is available across key sectors such as IT, biotech and fintech. It promotes growth.
Government initiatives such as Karnataka’s startup policy and flagship programs such as the Elevate Program and the Venturis Global Startup Challenge have helped to promote entrepreneurship. These programs provide financial aid, guidance, infrastructure support and help startups thrive.
Venturise, part of a global investor, will focus in its second edition on strengthening the power of growth-stage startups in sectors such as Electronic Systems Design and Manufacturing (ESDM), Clean Mobility, Aerospace and Defense. I am.
This year, Venturise received over 900 applications from startups addressing industry challenges. 45 finalists are set to propose innovative solutions to event expert panels.
With venture capital investments exceeding $4 billion in 2023 alone, Karnataka’s robust IT infrastructure, skilled workforce and a lucrative regulatory environment continue to attract global investors. The state’s efforts not only set Karnataka as a leader in technical and entrepreneurial excellence, but also cement its role as a key driver of economic growth in India and beyond.
PA: As Karnataka has established itself as a global investment hub, how do international investors and venture capital communities see the state’s potential? What makes Karnataka an attractive destination for global investors compared to other Indian states?
MBP: Karnataka is widely regarded as the best destination for global investors due to its innovation-driven economy, skilled talent pools and world-class infrastructure. The state’s efforts to align with global trends have resulted in a robust industrial ecosystem supported by:
Global Partnership: The success of the roadshow in Japan, South Korea and the US has secured a $3 billion investment, reflecting investors’ confidence in Karnataka’s infrastructure and talent pool.
Strategic collaborations with global leaders such as Intel, Toyota Kirolkar and Foxconn in sectors such as semiconductors, green energy and manufacturing.
Policy Framework: Clean Mobility Policy and Industrial Policy 2024-2029 shall provide targeted incentives including production-related perks and subsidies to attract investment in the high-tech sector.
Technology Edge: Karnataka has 42% of Indian unicorns and over 500 GCCs, highlighting R&D and technology leadership.
Ease of business: AI-driven single window clearance system integrates real-time support, predictive analytics, and GIS mapping of land allocation, streamlines your investment process significantly.
PA: The 2025 World Investors Conference is positioned as a platform to promote inclusive growth. Can we provide an overview of the specific initiatives or policies introduced in KIM 2025 to ensure equitable opportunities across the Karnataka sector and region?
MBP: Global Investors Gathering (GIM) 2025, the theme of “Rethinking Growth” aims to position Karnataka as a global industry and infrastructure hub by promoting inclusive and sustainable development I am. The event will focus on strengthening the power of MSME, promoting start-up innovation, making progress in regional development, and showing key sector advancements to attract domestic and international investments. .
Karnataka focuses on high value sectors such as aerospace & defense, electronics, core manufacturing and logistics to accelerate GDP growth and enhance supply chain integration.
At the same time, the state is promoting labor-intensive industries such as textiles, electronics manufacturing, Global Capacity Centre (GCC), R&D and manufacturing support services to create large-scale employment opportunities. Furthermore, Karnataka has established itself as an R&D hub by actively fostering the sunrise sector in future mobility, green hydrogen, drones, space technology, medical technology and semiconductors.
To attract investment, the upcoming Global Investors Conference (GIM) will showcase over 100 speakers, B2G meetings and networking sessions to showcase Karnataka’s investor-friendly policies. The state has also established sector-specific vision groups led by private sector leaders to streamline investment efforts and ensure efficient execution. Strategic partnerships with Japan, South Korea, the US, the Netherlands and Germany continue to be a key focus by strengthening global cooperation, and strategic partnerships with Germany aimed at promoting innovation and foreign investment. .
With its long-term vision for inclusive and sustainable growth, GIM 2025 aims to create a strong investment ecosystem that not only attracts capital, but also brings tangible benefits to the local community. Karnataka continues to cement its position as a leader in innovation, industry and entrepreneurship by prioritizing key sectors and fostering global partnerships.
PA: MSMES and manufacturing sector are key pillars of Karnataka’s economy. What steps are governments taking to support these sectors, especially in terms of infrastructure, funding and policy incentives? Are there any flagship initiatives to make Karnataka a major production powerhouse?
MBP: Karnataka’s MSMES and manufacturing sector are crucial to its economic strategy. The government has deployed a comprehensive initiative to strengthen these sectors.
Infrastructure Development: Renovating over 200 industrial properties and establishing sector-specific industrial parks, such as Dharwad’s EV cluster and Devanahalli’s aerospace cluster.
Financial support: Subsidies and incentives under Industrial Policy 2024-2029, including 20%-25% capital subsidies for manufacturing projects outside of Bengaluru.
Capacity Building: Our partnership with NASSCOM will equip MSME with advanced digital tools and manufacturing technology to provide industry 4.0 training.
Small Business Connect: A platform that allows small businesses to access funding, interact with global buyers, and participate in matchmaking events.
These initiatives position Karnataka as a manufacturing powerhouse and ensure MSME’s integration into the global supply chain.
PA: Karnataka has been one of the leading economic performers consistently among the Indian states. Can you give an overview of recent economic performance? Which sectors are emerging as growth drivers now? Also, what fundamental factors are driving the increase?
MBP: Under Hon’s leadership. Karnataka Minister MB Patil continues to excel as India’s best performing state by fostering economic growth through a combination of innovative policies, infrastructure development and strategic investments. The state has cemented its position as a global hub of technology, manufacturing and sustainability, supported by key initiatives that have shaped its economic trajectory in recent years.
Investment Magnet: Karnataka has successfully attracted significant global investments, including $3 billion worth of commitments through roadshows in Japan, South Korea and the US.
Strategic partnerships with companies such as Foxconn, Chevron Corporation and Toyota Kirloskar further strengthen the state’s industrial base across sectors such as aerospace, semiconductors and green energy.
Leadership in Technology and Innovation: Karnataka accounts for over 40% of India’s unicorns, demonstrating its advantage in the startup ecosystem.
The state has invested heavily in creating a robust R&D ecosystem supported by partnerships between more than 400 Global Capacity Centres (GCCs) and institutions such as IISC and IIT.
Industry Growth and Inclusiveness: Industrial Policy 2024-2029 focuses on sustainable and inclusive growth, providing zone-based incentives to promote investment in Tier 2 and Tier 3 cities . This approach accelerates regional development and diversifies economic opportunities outside of Bengaluru.
Dedicated industrial clusters such as Devanahalli’s aerospace cluster and Dharwad’s EV manufacturing cluster were established to promote sector-specific growth.
SME Connect: Through the SME Connect initiative, the government is strengthening its training and resources to over 2,000 MSMEs, increasing its global competitiveness.
Future Ready Infrastructure: Karnataka’s commitment to infrastructure upgrades such as the Industrial Corridors of Bangalore and Chennai, Knowledge, Happiness and Innovation City (Kwin city) ensures economic competitiveness.
