KARNATAKA - IBEF2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14...

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KARNATAKA THE SILICON VALLEY OF INDIA

2 2

Executive Summary………………….…. 3

Advantage State………………………... 5

Karnataka Vision 2020………………….6

Karnataka – An Introduction……………7

Karnataka Budget 2015-16……..….…20

Infrastructure Status………………..….22

Business Opportunities…………....….40 Doing Business in Karnataka………...69

State Acts & Policies.......................... 75

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AUGUST 2015

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EXECUTIVE SUMMARY … (1/2)

Source: DIPP, Visvesvaraya Trade Promotion Centre, Karnataka Economic Survey 2014-15

Strong growth in GSDP

• The state contributed 5.68 per cent to the GSDP of India in 2014-15. Between 2004-05 and 2014-15, the GSDP of the state grew at a CAGR of 12.04 per cent.

• The per capita GSDP increased to US$ 1,900, growing at a CAGR of 10.94 per cent between 2004-05 and 2014-15.

IT hub of India

• Karnataka is the IT hub of India and home to the fourth largest technology cluster in the world. Karnataka has 47 IT/ITeS SEZs, three software technology parks and dedicated IT investment regions.

• The exports of IT and electronic products from the state reached US$ 32.19 billion in 2014-15. Exports of IT and electronic products accounted for 40 per cent share in India's IT and electronic products exports and 62 per cent share in Karnataka’s overall exports as of 2014-15.

Vibrant industrial base

• Karnataka has vibrant automobile, agro, aerospace, textile & garment, biotech and heavy engineering industries. The state has sector-specific SEZs for key industries such as IT, biotechnology, engineering, food processing and aerospace.

One of the preferred investment destinations

• The cumulative FDI inflows from April 2000 to March 2015, amounted to US$ 16.1 billion, the fourth highest in India after Maharashtra, Delhi and Chennai. FDI inflows from April 2014-March 2015 stood at US$ 3.44 billion. The state accounts for about 6.9 per cent share in India’s cumulative FDI inflows. Real estate is one of the fastest growing sectors.


AUGUST 2015


Source: Indian Minerals Yearbook 2014, Economic Survey of Karnataka 2013-14

Strong growth in export • As of 2014-15, total exports from the state aggregated US$ 52.02 billion, which is

approximately 13.01 per cent of India’s total exports. Karnataka’s exports increased at a CAGR of 9.4 per cent during 2010-11 to 2014-15.

Strong knowledge infrastructure

• Karnataka has 44 universities, 4,519 pre-university colleges, 206 engineering colleges and 293 polytechnics, 47 medical colleges and 38 dental colleges.

• The state also houses 401 R&D centres; around 400 of the Fortune Global 500 companies outsource their IT services to firms in Bengaluru.

Significant agriculture base

• Sugarcane was the major crop of the state with production estimates of about 39.71 million tonnes in 2014-15. The state’s food grain production is estimated to be 13.1 million tonnes in 2014-15. Karnataka is also the third largest producer of plantation crops in the country.

Strong growth in tourism sector

• Karnataka boasts of a diverse flora and fauna and a 320 km natural coast line, which

makes it a nature tourist's paradise. Tourist arrivals in the state increased from 25.2 million in 2005-06 to 111.8 million in 2014-15. The state has World Heritage Sites at Hampi and Pattadakal. The sector contributes 14.8 per cent to GSDP of Karnataka; plans are afoot to expand to 26 per cent by 2020.

EXECUTIVE SUMMARY … (2/2)


AUGUST 2015


Source: Karnataka Udyog Mitra, D&B Cluster State Overview, Karnataka Vision 2020, Department of Industrial Policy and Promotion, Visvesvaraya Trade Promotion Centre,

Growing demand High economic growth

• GSDP expanded at a CAGR of 12.04 per cent between 2004-05 and 2014-15.

• Buoyant services (IT, tourism) and industries driving economic growth.

• Sector specific SEZs and SIRs facilitating growth.

Rich talent pool

• Karnataka is termed as the Knowledge Capital of India.

• The state has successfully attracted skilled labour, especially, in the knowledge sector. Karnataka is among the states that produce a large number of doctors, engineers and medical technicians in the country.

Policy support

• Wide range of fiscal and policy incentives for businesses under the Karnataka Industrial Policy, 2014-19.

• Investor-friendly sector-specific policies to promote industries such as IT, biotechnology, tourism and manufacturing.

• Simplified procedures for investment.

Infrastructure

• Well-developed social, physical and industrial infrastructure.

• Good road, rail, water and air connectivity and substantial port infrastructure.

• Well-developed telecom infrastructure.

• Excellent healthcare facilities.

2014-15

Solar energy accounts for 1.5 per cent share in total

energy consumption

2022 target

Solar energy share in total

energy consumption is expected to reach 3 per

cent

ADVANTAGE: KARNATAKA


Advantage Karnataka

AUGUST 2015


KARNATAKA VISION 2020

Healthcare/ Social

amenities

Education/ Skill

development

Infrastructure

Women empowerment

Governance Poor and backward classes

Tourism

• Improve access and availability of quality healthcare for all.

• Build infrastructure to boost productive potential of the economy.

• Various metro rail and mono rail projects are in progress.

• Develop the state as a vibrant knowledge society.

• Focus on job oriented growth through skill development of the workforce.

• Enhance opportunities and empower women across economic, social and political spheres.

• Better governance through wider participation and deep democratic decentralisation.

• Encourage transparency and accountability.

• Increase rural incomes through greater viability of agriculture and allied activities.

• Bridge the gap between socially backward and vulnerable groups and rest

of the people.

• Preserve and promote Karnataka’s rich heritage.

• Karnataka Tourism Vision Group (KTVG) was set up in October 2013 to advise on promoting tourism in state.

Industry

• Build and sustain Bangalore’s leadership in science, technology and knowledge based industries.

• Achieve a sustainable and orderly process of industrialisation and urbanisation.

Source: State Planning Department


Vision 2020

AUGUST 2015


KARNATAKA FACT FILE

Karnataka is located in the southern region of India. The state is surrounded by the Arabian Sea in the west, Goa in the northwest, Maharashtra in the north, Andhra Pradesh in the east, Tamil Nadu in the southeast, and Kerala in the southwest.

Languages spoken are Kannada, Tulu, Kodava, Hindi and English.

Some of the prominent cities in the state are Ankola, Bengaluru, Bagalkot, Belgaum, Bidar, Bijapur, Chikmagalur, Chitradurga, Dandeli, Hubli-Dharwad, Mangalore, Mysore and Shimoga.

Karnataka has a tropical climate with three major seasons: warm and dry from February to May, monsoon from June to October and winter from November to January.

Source: Economic Survey of Karnataka 2013-14, Census 2011

Parameters Karnataka

Capital Bengaluru

Geographical area (sq km) 192,000

Administrative districts (No) 30

Population density (persons per sq km) 319

Total population (million) 61.1

Sex ratio (females per 1,000 males) 973

Literacy rate (%) 75.6

Male literacy rate 82.8

Female literacy rate 68.1

Source: Maps of India


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Parameter Karnataka All states Source

Economy 2014-15 2014-15

GSDP as a percentage of all states’ GSDP 5.68 100.0 Directorate of Economics & Statistics of Karnataka, Central Statistics Office

GSDP growth rate (%) 13.62 7.3 Directorate of Economics & Statistics of Karnataka, Central Statistics Office

Per capita GSDP (US$) 1,900 1,389.61 Directorate of Economics & Statistics of Karnataka, Central Statistics Office

Physical Infrastructure

Installed power capacity (MW) 15,149.82^ 272,502.95 Central Electricity Authority, as of May 2015

Wireless subscribers (No) 57,589,118** 973,347,094 Telecom Regulatory Authority of India-April

2015

Broadband subscribers (No) 4,878,430* 100,760,000 Telecom Regulatory Authority of India-April

2015

National Highway length (km) 6,540** 92,851.07 National Highway Authority of India April-2015

Major and minor ports (No) 1+12 13+187 India Ports Association 2015

Airports (No) 5 132 Airports Authority of India

*As of March 2014, ^As of June 2015, **As of May 2015


KARNATAKA IN FIGURES … (1/2)


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Parameter Karnataka All states Source

Social Indicators

Literacy rate (%) 75.6 73.0 Census, 2011

Birth rate (per 1,000 population) 18.8 21.4 SRS Bulletin, September 2014

Investment

FDI equity inflows (US$ billion) 16.12 248.5 Department of Industrial Policy & Promotion,

April 2000 to March 2015

Outstanding investments (US$ billion) 171.0 2,414.2 CMIE (2013-14)

Industrial Infrastructure

PPP projects (No) 266 1,409 DEA, Ministry of Finance, Government of India

SEZs (Notified) 58 347 Notified as of March 2015, Ministry of

Commerce & Industry

PPP: Public-Private Partnership, SEZ: Special Economic Zone, SRS: Sample Registration System


KARNATAKA IN FIGURES … (2/2)


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At current prices, the gross state domestic product (GSDP) of Karnataka was about US$ 115.86 billion in 2014-15

The GSDP of the state grew at a CAGR of 12.04 per cent between 2004-05 and 2014-15.

Growth has been mainly driven by secondary and tertiary sectors.

Source: Directorate of Economics & Statistics of Karnataka, Central Statistics Office

GSDP of Karnataka at current prices (US$ billion)


ECONOMIC SNAPSHOT – GSDP


37,2 44,4

50,3 67,2

67,3

71,2

90,0

94,6

96,2 102,0

115,9

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CAGR: 12.04%

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The net state domestic product (NSDP) of Karnataka was about US$ 103.2 billion in 2014-15.

The NSDP of the state grew at a CAGR of 12.01 per cent between 2004-05 and 2014-15.

NSDP of Karnataka at current prices (US$ billion)


ECONOMIC SNAPSHOT – NSDP


33,2 39,6

45,2

60,3 60,4 63,4

80,7 84,5 85,1 85,7

103,2

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CAGR: 12.01%

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The state’s per capita GSDP was US$ 1,900 in 2014-15.

The per capita GSDP increased at a CAGR of 10.94 per cent between 2004-05 and 2014-15.

GSDP per capita of Karnataka at current prices (US$)


ECONOMIC SNAPSHOT – PER CAPITA GSDP


673 793

889 1.173

1.161 1.216

1.522 1.582 1.594 1.672 1.900

20

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CAGR: 10.94%

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The state’s per capita NSDP in 2014-15 was US$ 1,692.

The per capita NSDP increased at a CAGR of 10.92 per cent between 2004-05 and 2014-15.

NSDP per capita of Karnataka at current prices (US$)


ECONOMIC SNAPSHOT – PER CAPITA NSDP


600 708

798 1.053

1.043

1.083

1.364 1.414

1.409

1.405

1.692

20

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5

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CAGR: 10.92%

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In 2014-15, the tertiary sector contributed 60.66 per cent to the state’s GSDP at current prices, followed by the secondary sector (24.63 per cent) and the primary sector (14.71 per cent).

At a CAGR of 13.99 per cent, the tertiary sector has been the fastest growing among the three sectors from 2004-05 to 2014-15. The growth has been driven by trade, hotels, real estate, finance, insurance, transport, communications and other services.

The secondary sector grew at a CAGR of 10.17 per cent between 2004-05 and 2014-15. This was driven by manufacturing, construction and electricity, gas & water supply.

The primary sector grew at a CAGR of 8.72 per cent between 2004-05 and 2014-15.

GSDP composition by sector


ECONOMIC SNAPSHOT – PERCENTAGE DISTRIBUTION OF GSDP


19.86% 14,71%

[VALUE] 24,63%

51.02% 60,66%

2004-05 2014-15

Primary Sector Secondary Sector Tertiary Sector

Source: Directorate of Economics & Statistics of Karnataka, Central Statistics Office, TechSci Research

AUGUST 2015

CAGR

8.72%

13.99%

10.17%

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Source: Department of Agriculture & Corporation, Government of Karnataka

Production of major crops in Karnataka (lakh tonnes)

Crop 2013-14 2014-15

Cereals 115.37 114.77

Pulses 17.73 15.24

Total food grains 133.10 131.00

Oilseeds 11.62 11.67

Sugarcane 379.05 397.10

Tobacco 0.90 1.10

Potato 5.39 5.64

Tomato 20.68 21.56

Onion 20.65 21.26

Coffee 2.11 2.33

Sugarcane was the major crop of the state with production estimates of about 39.71 million tonnes in 2014-15. The state’s food grain production is estimated to be 13.1 million tonnes in 2014-15.

Major oilseeds production is estimated to be 1.16 million tonnes in 2014-15. Production of cereals and pulses in the state is estimated to be 1.14 million tonnes and 1.52 million tonnes, respectively, in 2014-15.

In 2014-15, total production of major fruits in the state was 6.69 million tonnes.


ECONOMIC SNAPSHOT – AGRICULTURAL PRODUCTION


AUGUST 2015

Area under major crops in Karnataka (lakh hectares)

Crop 2013-14 2014-15

Cereals 50.40 49.45

Pulses 25.06 24.32

Total food grains 75.46 73.77

Oilseeds 14.10 15.01

Sugarcane 4.20 4.40

Tobacco 1.09 1.05

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Source: Visvesvaraya Trade Promotion Centre, Government of Karnataka


ECONOMIC SNAPSHOT – EXPORTS…(1/3)


As of 2014-15, total exports from the state aggregated US$ 52.02 billion, which is approximately 13.01 per cent of India’s total exports. Karnataka’s exports increased at a CAGR of 9.4 per cent during 2010-11 to 2014-15.

During 2014-15, electronics and software exports from the state reached US$ 32.19 billion, which constitutes 40% share of India IT exports.

AUGUST 2015

Exports from Karnataka (in US$ billion)

36,28

45,47 47,57 48,18 52,02

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Karnataka exports by commodity (US$ million)

Commodity 2010-11 2011-12 2012-13 2013-14 2014-15

Electronics & computer software 23,093.16 28,186.16 28,723.99 29,528.87 32,186.46

Readymade garments 1,505.04 1,691.88 1,412.26 1,476.44 1,629.23

Petroleum & petroleum products 3,200.79 4,865.57 6,244.71 5,871.27 6,782.02

Engineering 1,605.44 1,716.81 2,314.12 2,982.42 3,476.78

Iron ores & minerals (incl granites) 212.19 235.61 319.46 122.59 124.25

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AUGUST 2015

Karnataka exports by commodity (US$ million)

Commodity 2011-12 2012-13 2013-14 2014-15

Silk products 148.62 139.83 120.42 107.83 91.90

Coffee 478.74 659.26 650.71 596.88 824.98

Basic chemicals, pharmaceuticals and cosmetics

634.15 1,054.85 1,331.80 1,376.91 978.10

Agriculture & processed food products 146.87 158.53 211.56 215.66 229.43

Gems and jewellery 4,361.46 4,929.98 4,508.01 4,010.45 3,649.30

Cashew and cashew kernels 128.67 183.25 155.96 199.07 249.67

Handicrafts 64.23 55.47 68.86 85.60 90.91

Leather products 44.28 66.49 83.23 74.65 90.08

Chemicals and allied products 74.09 99.73 90.41 93.23 158.43

Marine products 115.74 125.70 116.37 177.01 217.82

Plastic goods 123.41 125.49 145.09 116.12 62.38

Spices 98.64 145.44 166.45 190.78 186.79

Wool & woollen products 19.95 26.80 27.62 29.20 31.69

Miscellaneous 227.53 1,001.04 881.79 923.19 958.36

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Source: Economic Survey of Karnataka 2014-15




AUGUST 2015

Incentives & concessions for export in Karnataka

Exemption from entry tax

Refund of certification charges

Refund of cost incurred for export consultancy / market Intelligence studies

Brand promotion and quality assurance

Support for the establishment of CFS and other export infrastructure

Compensation of export Credit.

Support for development of exports in gherkins, rose onions and floriculture.

Market development assistance for trade promotion and overseas trade delegations.

Policies for export promotion

Industrial Policy 2014-19 Karnataka Tourism Policy 2009

Karnataka State Mineral Policy 2008 Karnataka Semi Conductor Policy 2010

Grape Processing & Wine Policy 2007 Karnataka Solar Policy 2011

Karnataka Renewable Energy Policy 2009 Karnataka Integrated Agribusiness Development policy 2011

Karnataka SEZ Policy 2009 Karnataka Animation Visual Effects & Comic Policy 2012

Karnataka Pharmaceutical Policy 2013 Karnataka New Infrastructure Policy 2013

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The state has a stable political environment. Successive state governments have recognised the importance of industries in the state and have provided a conducive business environment to attract domestic as well as foreign entities. Karnataka is ranked fifth in terms of attracting private sector investments in India.

According to the Department of Industrial Policy & Promotion (DIPP), cumulative FDI inflows from April 2000 to March 2015 amounted to US$ 16.1 billion, the fourth highest in India after Maharashtra, Delhi and Chennai. FDI inflows from April 2014 -March 2015 stood at US$ 3.44 billion. The state accounts for about 6.9 per cent share in India’s cumulative FDI inflows.

Source: Department of Industrial Policy & Promotion

FDI equity inflows, 2008-09 to 2014-15 (US$ million)


ECONOMIC SNAPSHOT – FDI INFLOWS & INVESTMENTS


AUGUST 2015

2,02

1,09 1,12

1,53

1,02

1,89

3,44

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

Karnataka GSDP share at current prices by sector

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

Primary 18.62% 19.02% 17.60% 17.56% 19.81% 16.99% 16.54% 16.41% 14.71%

Secondary 30.70% 29.83% 29.60% 27.72% 26.80% 27.48% 26.41% 25.82% 24.63%

Tertiary 50.67% 51.15% 52.80% 54.72% 53.38% 55.52% 57.05% 57.77% 60.66%

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Total budget size for 2015-16 is US$ 12,043.29 million. Budget highlights:

Development of the Bengaluru-Mumbai Economic Corridor (BMEC) on 10,000 acres over next five years. Phone Doctor, 104 Helpline, Dental Helpline and many other services – US$ 1,007.8 million are sanctioned for various schemes. Transgender policy to be implemented. US$ 330 will be given to 1,000 transgenders. PPP and Information Centres of Fisheries Department at 10 Districts, for which US$ 50 million were sanctioned. US$ 33 million was sanctioned for setting up Karnataka Mining Environmental Restoration Corporation for the rejuvenation of mining affected areas in Bellary, Chitradurga and Tumakuru. Blue revolution in inland fisheries through short-term loans of up to US$ 0.01 million at zero per cent interest to fish farmers.

State contribution of US$ 1.9 million towards commencement of Indian Institute of Information Technology at Hubli-Dharwad. US$ 8.25 million are sanctioned towards implementation of recommendations made by Karnataka Tourism Vision Group.


ANNUAL BUDGET 2015-16…(1/2)


AUGUST 2015

Source: Government of Karnataka, Budget 2015-16 *Revised estimates

*Assumed exchange rate of 1 US$= 60.28 INR for 2015-16

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Primary education:

Reconstitution of expert committees to set up text books promoting moral and social values.

To provide “solar educational kits to 100 Government institutions and install solar electric equipment to save electricity in these schools. They will be declared as Green Power Schools.

US$ 2,673.9 million has been allocated for primary and secondary education department during 2015-16.

Agriculture:

Provide support to farmers through low interest agricultural loans, subsidised seeds, fertilisers, nutrients, agricultural improvements, soil conservation, market improvements, minimum support price, crop insurance and other related programmes. Launch of “Krishibhagya” scheme for farmers whose livelihood is dependent on rains. This scheme aims to provide facilities including conservation, storage and efficient use of rain water, adoption of profitable cropping systems, cultivation of high income earning horticultural crops, and promotion of animal husbandry activities, among others.


ANNUAL BUDGET 2015-16…(2/2)

Source: Government of Karnataka, Budget 2015-16 *Assumed exchange rate of 1 US$= 60.28 INR for 2015-16


Sector Annual allocation

(US$ million)

Education department 3,316.8

Energy 2,125.08

Water resources 2,149.30

Urban development 1,891.9

Social welfare 756.4

Health and family welfare 1,007.7

Agriculture 644.16

Horticulture 126.07

Sericulture 30.85

Fisheries 49.27

Forest, Environment and Ecology

291.47

Major sector-wise allocation as per budget 2015-16

AUGUST 2015


The state is well connected to its five neighbouring states and other parts of India through 15 national highways that run through the state. The Karnataka State Road Transport Corporation (KSRTC), established in August 1961, provides state road transport services. In 2014-15, under Namma Grama Namma Rashte scheme, the state government constructed 2,118 km road in Karnataka.

In the 2015-15 budget, the state government proposed to invest US$ 165.89 million for the improvement of bridges, which link to major roads in Karnataka. In 2015-16, under Namma Grama Namma Rashte scheme, the state government announced plans to construct 3,855 km road in the state. In the same year, the government announced plans to construct flyover in Doddanekkundi junction of outer ring road, Bangalore. In 2015-16 budget, under special component programme and tribal sub plan, the government announced plans to invest US$ 94.75 million for the construction of concrete roads in the state.

Source: Ministry of Road Transport & Highways, Government of Karnataka, State Budget, 2015-16

Road infrastructure in Karnataka (km)

Road type May 2014 May 2015

National highways 4,688 6,540

State highways 20,773 19,288

Major district roads 49,683 49,942

Municipal roads 8,366 8,366

Other roads 148,412 155,545

PHYSICAL INFRASTRUCTURE – ROADS


Source: Maps of India

AUGUST 2015

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Source: Economic Survey of Karnataka, 2014-15, State Budget 2015-16

Karnataka railway network

Type of railway BG (km) MG (km)

NG (Km)

Total (km)

South Central

Railways 268 0 0 268

South Western

Railways 2,516 97 84 2,697

Southern Railways 37 0 0 37

Konkan Railways 248 0 0 248

Total 3,069 97 84 3,250

Karnataka is well connected to other parts of the country through the railways. The state has a railway network of 3,250 km.

Karnataka Rail Infrastructure Development Corporation (K-RIDE) has been set up with the objective of developing and implementing rail infrastructure projects in Karnataka with private sector participation wherever feasible. K-RIDE has a chief executive officer deputed from the Railways Department and principal secretary, Infrastructure Development Department, as its chairman.

As of 2014-15, about 90 per cent of work (for phase 1) for Bengaluru Metro Rail Corporation has been completed. Under this phase, two lines between Byappanahalli to M.G. road and Peenya with 17 km length are already operational.

In February 2015, an amount of US$ 19.8 million was sanctioned for the development of a third coach terminal at Byappanahalli, Karnataka. For doubling the 130 km Yelahanka-Penukonda single line, an amount of US$ 143.5 million was sanctioned by the state government.


PHYSICAL INFRASTRUCTURE – RAILWAYS


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Source: Global Investors Meet, 2012 *Association of Private Airport Operators

The state has five domestic airports. These are located in Bengaluru, Mangalore, Hubli, Mysore and Belgaum. International flights operate from the airports at Bengaluru (Kempegowda International Airport) and Mangalore (Mangalore International Airport). Bengaluru International Airport; the country’s first greenfield international airport, has been developed at Devanahalli in Bengaluru as a passenger and cargo department hub. This was developed under the PPP model and started operations in May 2008.


PHYSICAL INFRASTRUCTURE – AIRPORTS


AUGUST 2015

Karnataka airport statistics (2014-15)

Airport Passenger traffic Aircraft movement Cargo handled

(tonnes)

Bengaluru 15,401,392 133,488 242,389

Mangalore 1,307,083 11,501 649

Karnataka airport statistics (2014-15)

Bengaluru 12,868,830 117,728 279,475

Mangalore 1,283,667 12,776 367


PHYSICAL INFRASTRUCTURE – PORTS


Ports

Major ports • New Mangalore Port

Minor ports

• Karwar • Belekeri • Tadri • Honnavar • Bhatkal • Kundapur • Hangarkatta • Malpe • Padubidri • Old Mangalore

Source: Indian Port Association

Karwar Port

New Mangalore Port

AUGUST 2015

There are 13 ports in Karnataka, of which New Mangalore is a major port. New Mangalore Port is the ninth major port in India with the deepest inner harbour on the west coast.

Tata Vistara airline, a joint venture between Tata Sons Limited and Singapore Airlines Limited (SIA) was invited by the Government of Karnataka in February 2015, to establish a hub in Bengaluru. The Government also assured Tata Vistara airline of reforms in sales tax ATF.

Cargo handled by New Mangalore port (in ‘000 tonnes)

31.350 32.941 37.036 39.365

36.566

2011 2012 2013 2014 2015

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As of June 2015, the state had an installed power generation capacity of 15,149.82 MW. The state contributed 6,585.05 MW of this capacity, and the private sector contributed 6,539.40 MW, whereas the central government’s share was 2,025.37 MW.

Of the total installed power generation capacity, 6,563.93 MW was contributed by thermal power. Capacity of 475.86 MW and 3,599.80 MW was contributed by nuclear and renewable power, respectively, while hydropower contributed 4,510.23 MW. The government has taken steps to undertake several new small, medium and large scale power projects. In the state budget 2015-16, the government has announced plans to establish 350 MW capacity gas-based electricity generating centre at Yelahanka. In the same budget, the government has announced to set up 75 new substations for the strengthening of transmission lines in the state. Karnataka Renewable Energy Development Limited (KREDL) was established in 1996 to promote the development of renewable energy sources in the state. As per the 2015-16 budget, the state government has announced plans to facilitate a subsidy of US$ 1,243.86 million for the distribution of free electricity to agricultural IP sets and Kuteera Jyoti connections.

Source: Central Electricity Authority, *As of June 2015

Installed power capacity (GW)


PHYSICAL INFRASTRUCTURE – POWER


8,52 8,69

11,37 12,06

13,93 14,03

15,14

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AUGUST 2015

CAGR: 10.1%

In February 2015, US-based Convalt Energy announced plans to set up solar plants in the state of Karnataka with cumulative capacity of 1,000 MW. The construction of the plants is expected to start by 2016 and the plants are expected to be operational by the end of 2019.

27 27

Telecom infrastructure (May 2015)

Wireless subscribers 57,589,118

Wire-line subscribers 2,269,956

Broadband subscribers 4,878,430*

Post offices 9,797

Telephone exchanges 2,802**

Teledensity (in per cent) 92.44

Source: Telecom Regulatory Authority of India, Economic Survey of Karnataka, *As of March 2014

Leading telecom companies operate in the state in the sectors of telecommunication network, basic telephony services (both wire line and wireless) and networking services for telecommunication equipment.

According to Telecom Regulatory Authority of India (TRAI), there were 57.59 million wireless connections and 2.27 million wire-line subscribers in Karnataka, as of May 2015.

The entire state is networked through optical fibre cables (OFCs) of the state-owned company, Bharat Sanchar Nigam Limited (BSNL), as well as private companies such as Bharti, Reliance, VSNL and TATA Tele Services.

Last mile access is provided by BSNL as well as Tata Tele Services in various parts of the state. Bharti and Reliance Communications provide the last-mile access directly to the customers in all major cities of Karnataka.


PHYSICAL INFRASTRUCTURE – TELECOM


Major telecom operators in Karnataka

Bharti Airtel

IDEA Cellular

Vodafone Essar

Bharat Sanchar Nigam Limited (BSNL)

Aircel Ltd

Reliance Communications

Tata Teleservices

AUGUST 2015

28 28

Water supply Sewerage system

• KUWSDB has implemented surface-based drinking water supply schemes in 187 urban areas to provide assured safe drinking water.

• KUWSDB is implementing

26 schemes for shifting the source of water from ground water to assured surface water. These schemes are to be completed by 2013.

• Cauvery Water Supply

Scheme (CWSS) Stage IV, Phases I–IV are being implemented to supply 810 MLD of water to about 600,000 connections.

• The Bengaluru Water Supply and Sewerage Board (BWSSB) is responsible for providing water supply, sewerage system and sewage disposal in the Bengaluru Metropolitan area.

• Forty-two urban

areas have been provided with Underground Drainage (UGD) facilities in the state.

Under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), 54 projects worth US$ 668.8 million were sanctioned by August 2014. Some of the key areas of development are roads and flyovers, water supply, storm-water drainage, sewerage and urban transport.

The Karnataka Urban Water Supply and Drainage Board (KUWSDB) is responsible for providing water supply and sewerage facilities in 213 urban areas of the state, except the areas serviced by the Bruhath Bengaluru Mahanagar Palike (provides services in Bengaluru city and surrounding areas).

Karnataka has seven city corporation, 41 city municipal council, 94 town municipal council and 68 town panchayats.

As of 2015-16 budget, an amount of US$ 1,891.9 million has been proposed for urban development. In the 2015-16 Annual Budget, the state government announced plans to construct 50,000 houses in the urban areas of the state. The unit cost for these houses would be US$ 2.99 thousand.

As of 2015-16 budget, the state government announced plans to improve the infrastructure of 211 urban local bodies in the state under the Nagarothana CMSMTDP Phase-3 scheme.


DEVELOPMENT PROJECTS: URBAN INFRASTRUCTURE


Source: JNNURM, Ministry of Urban Development

AUGUST 2015

29 29

Source: Department of Economic Affairs, Government of India


DEVELOPMENT PROJECTS: KEY PUBLIC-PRIVATE PARTNERSHIP (PPP) PROJECTS … (1/2)


AUGUST 2015

Under construction PPP projects - Karnataka

Project name Sector Status Total cost

(US$ million)

Road Upgradation (Karnataka) Project Transport Under construction 108.66

Setting up of mechanised iron ore handling facilities at deep

draft multi-purpose berth of NMPT Transport Under construction 45.97

Six laning of Belgaum - Dharwad Section Road Transport Under construction 79.63

Sports City cum International Convention Centre cum Star

Hotel cum Shopping Complex cum Residential Complex

Social and commercial

infrastructure Under construction 149.3

Airport (Hassan) Project Transport Under construction 497.68

Waste to Energy Project Mandur Water sanitation Under construction 9.95

Bus Terminal-cum-Commercial complex at Puttur Transport Under construction 1.21

Water Supply Scheme (Mysore) Water sanitation Under construction 32.27

Construction and Maintenance of Public Toilets in Bangaluru Social and commercial


Water Supply Scheme (Nanjangud) Water sanitation

Under construction 4.74


DEVELOPMENT PROJECTS: KEY PUBLIC-PRIVATE PARTNERSHIP (PPP) PROJECTS … (2/2)


Source: Department of Economic Affairs, Government of India

AUGUST 2015

PPP Projects – Karnataka

Project name Sector Status Total cost

(US$ million)

Development of integrated solid Waste Treatment (100 TPD)

and Landfill Facilities at Belgaum Water sanitation Under construction 0.85

Development of International Convention Centre at Devanahalli Social and commercial


Integrated Disposal Facility (Mysore) Water sanitation Under construction 4.62

Integrated Municipal solid waste treatment Kannahalli Water sanitation Under construction 4.15

Integrated Municipal solid waste treatment Mavalipura Water sanitation Under construction 6.64

Karnataka Urban Water Sector Improvement Project Water sanitation Under construction 11.61

Kudgi TPS Transmission Line Project Energy Under construction 223.95

Malleshwaram Market - Re-development Social and commercial


New Puttanna Theatre and Parking Social and commercial


Road Upgradation (Goa/Karnataka Border-Kundapur) Project Transport Under construction 437.79

Road Upgradation (Hoskote-Dobespet) Project Transport Under construction 191.27

31 31

Source: Department of Industries and Commerce, Karnataka

Name/Developer Location Primary industry

M/s. Ozone SEZ Developers Pvt Ltd Chikkaballapura Pharmaceuticals

SEZ with valid in-principle approval


DEVELOPMENT PROJECTS: SEZs AND INDUSTRIAL CLUSTERS … (1/3)


The state has 26 operational, 40 notified SEZs, one valid in-principle approval and 60 formal approval SEZs in 2014-15. The Karnataka Industrial Areas Development Board has developed 141 industrial areas spread across the state. The state plans to develop and upgrade eight clusters around Bengaluru with an investment of US$ 348.4 million. The Karnataka State Industrial & Infrastructure Development Corporation has promoted more than 135 start-up ventures in the state through equity participation and has provided debt to core industries such as steel, cement, mining and textiles, as well as new sectors such as IT, aerospace and telecom. Exports from SEZs in Karnataka increased at a CAGR of 66.4 per cent from US$ 0.4 billion in 2007-08 to US$ 8.49 billion in 2013-14.

Exports from SEZs in Karnataka (US$ billion)

0,40

1,70 2,20

4,10

5,30

7,24

8,49

20

07-0

8

20

08-0

9

20

09-1

0

20

10-1

1

20

11-1

2

20

12-1

3

20

13-1

4

Source: Economic Survey of Karnataka, 2014-15

AUGUST 2015

CAGR: 66.4%





Biocon Special Economic Zone Anekal Taluk, Banglore, Karnataka Biotechnology

Synefra Special Economic Zone Udupi Taluk, Karnataka Hi-tech engineering products and

related services

Manyata Embassy Business park SEZ Bangalore, Karnataka IT/ITeS

Wipro Limited (Electronic City) Varthur Hubli, Electronic City,

Banglore, Karnataka IT

Wipro Limited (Sarjapur) Varthur Hobli, Sarjapur Road,

Karnataka IT

Infosys Ltd. SEZ (Mangalore) Bantwal Taluk, Dakshina,

Kannada distt. , Karnataka IT/ITeS

Infosys Ltd SEZ (Mysore) Hebbal Inustrial Area, Distt.

Mysore, Karnataka IT/ITeS

Vrindavan Techvillage Sez (formerly

M.S. Vikas Telecom Ltd) Bangalore, Karnataka IT/ITeS

Rmz Ecoworld Infrastructure Pvt. Ltd.

[Formerly Adarsh Prime Projects Pvt.

Ltd

Devarabeesana halli, Bhoganahalli

and Doddakanahalli, Karnataka IT/ITeS

Kiadb Aerospace SEZ Karnataka Aerospace and industry

Keonics Shimoga Village Machenahalli and Nidige, District

Shimoga, Karnataka

Electronics hardware

and software/ITeS

Some of the operational SEZs in Karnataka


AUGUST 2015





Divyasree Technopark Kundalahalli Village, Krishnarajapuram, Karnataka IT/ITeS

International Technology Park Ltd (ITPL) Bangalore Karnataka IT/ITeS

Cessna SEZ Bangalore Karnataka IT/ITeS

Global Village [formerly Tanglin SEZ] Pattengere/Mylasandra Villages, Karnataka IT/ITeS

HCL Technologies Ltd. Bangalore Karnataka IT/ITeS

Pritech park Sez (Primal Projects Ltd) Bangalore Karnataka IT/ITeS

Bagmane SEZ Bangalore Karnataka IT/ITeS

Gopalan Enterprises Pvt. Ltd (Global Axis-hoodi) Bangalore Karnataka IT/ITeS

Karle Projects Bangalore Karnataka IT/ITeS

Mangalore Special Economic Zone Bangalore Karnataka Multi product

Quest special Economic Zone Belgaum district, Karnataka Precision engineering

Products

Kiadb Pharmaceutic Al Special Economic Zone Karnataka Pharma

Kiadb SEZ Hassan – Textiles Hasan, Karnataka Textile

Kiadb food Processing Special Economic Zone Samudravalli, Sankalapura Food processing

Larsen and Toubro SEZ KIADB Industrial Area, Taluka Hebbel, Hootagally,

District, Mysore, Karnataka IT/ITES

Some of the operational SEZs in Karnataka


AUGUST 2015

34 34






M/s. Biocon Ltd Bengaluru Biotechnology

Karnataka Industrial Areas Development Board Mangalore IT/ITeS

Infosys Technologies Limited Dakshina Kannada IT/ITeS

Karnataka Industrial Areas Development Board Shimoga Engineering & related industries

Karnataka Industrial Areas Development Board Hassan Food processing and related services

Karnataka Biotechnology and Information Technology Services Bengaluru Biotechnology

Suzlon Infrastructure Ltd Near Mangalore

Port Port-based for hi-tech engineering products

and related services

Karnataka Industrial Areas Development Board Hassan Pharmaceuticals

Mangalore SEZ Limited Dakshin Kannada Petrochemicals and petroleum

Quest Machining and Manufacturing Pvt Ltd Belgaum Auto, aerospace and industrial engineering

High Street Developers Private Limited Mandya IT/ITeS

Opto Infrastructure Limited Hassan Electronic hardware & software/IT/ITeS

Some of the SEZs with formal approvals

AUGUST 2015

35 35



SOCIAL INFRASTRUCTURE – EDUCATION … (1/2)


The state has a literacy rate of 75.6 per cent, the male literacy rate is 82.8 per cent and the female literacy rate is 68.1 per cent.

In terms of the number of universities, Karnataka ranks fifth among all Indian states and union territories, with 44 universities. Of these, 24 are state public universities and 11 are private deemed universities.

The state has 4,519 pre-university colleges to impart general education. There are more than 1 million students in the pre-university colleges.

There are 293 polytechnics and 206 engineering colleges to provide technical education in the state.

Literacy rates (%)

Literacy rate 75.6

Male literacy 82.8

Female literacy 68.1

AUGUST 2015

Educational infrastructure (No) 2014-15

Medical colleges 47

Ayurvedic colleges 56

Homoeopathic colleges 11

Unani colleges 05

Naturopathy & Yogic Sciences (BNYS) 04

Dental colleges 38

Pharmacy colleges 61

Nursing colleges 287

36 36

Karnataka education statistics (2014-15)

Number of schools

Lower primary: 26,308

Higher primary: 34,604

Secondary schools: 14,937

School dropout rate

(in per cent)

Lower primary: 2.37

Higher primary: 2.54

Pupil-teacher ratio

Average: 23.33:1

Aided schools: 42.05:1

Unaided schools: 30.33:1

State participation in primary education is significant as 82.93 per cent of the lower primary and 64.96 per cent of the higher primary schools are managed by Department of Education.

In 2015, key MoUs were signed by the Government to attract US$ 272.3 million worth of investments for higher education and announced to set up a new IIT in Karnataka.

Karnataka is home to several premier institutions:

Indian Statistical Institute.

Indian Institute of Science.

Indian Institute of Management.

National Law School of India University.

Institute for Social and Economic Change.

University of Agricultural Sciences, Bengaluru.

Kannada University, Hampi.


SOCIAL INFRASTRUCTURE – EDUCATION … (2/2)



AUGUST 2015

37 37

Source: Economic Survey of Karnataka 2014-15, Sample Registration System (SRS) Bulletin Sep, 2014 , *Per thousand persons,

**Per thousand live births,

Three-tier health infrastructure comprising primary health centres, health units, community health centres and sub-centres is available in the state.

The policy of the government is to establish one primary health centre for every 30,000 inhabitants, one dispensary for every 15,000–20,000 inhabitants and one sub-centre for every 5,000 inhabitants.


SOCIAL INFRASTRUCTURE – HEALTH


Health indicators (2013-14)

Beds per 100,000 population 99

Birth rate* 18.8

Death rate* 7.1

Infant mortality rate** 31

Life expectancy at birth (years)

Male (2013) 63.6

Female (2013) 67.1

Health infrastructure (as of 2014-15)

• District hospitals: 20 • Other hospitals: 12 • Teaching hospitals: 29 • Community health centres: 206 • Taluk/general hospitals: 146 • Beds in community health centres: 21,550 • Primary health centres: 2,355 • Sub-centres: 8,871 • Dispensaries: 660

AUGUST 2015


CULTURAL INFRASTRUCTURE


There are several sports complexes in Bengaluru, Mysore, Mangalore and other cities. Cricket, hockey and football are the major sports, although other games are also popular.

The main sports arenas are the M. Chinnaswamy Stadium and the Sree Kanteerava Stadium in Bengaluru, Chamundi Vihar Stadium in Mysore and the Mangala Stadium in Mangalore.

The Bengaluru Golf Course and the Karnataka Golf Association are well-known golf courses in the state.

Karnataka is also home to numerous convention centres used for exhibitions, both indoor and outdoor, such as Palace Grounds and the Bengaluru International Exhibition Centre.

Under the Rural Tourism Project, Anegundi, Kokkare Bellur, Attivari Bird Sanctuary, Gokarna and Kodagu have been developed. Schemes are being prepared to develop rural tourism at other places also to showcase the rural life, art and culture and heritage.

Ranga Shankara and Karnataka Chitrakala Parishath form the cultural nexus of Bengaluru and are the performing spaces for dance, music and theatre artists.

An international mega convention centre, with a seating capacity of 6,000, is being planned near the Bengaluru International Airport.

AUGUST 2015


SMART CITIES


AUGUST 2015 Source: Census 2011 & TechSci Research, *NA-Not Available

Bangalore

Gulbarga

Bidar

Baijapur Badami

Pattadakal Mahakuta

Population, area & literacy rate of identified smart cities in Karnataka

Cities Population Area Literacy rate

Badami 330,860 1,374.71 81.63%

Baijapur 2,177,331 10,458 67.15%

Bangalore 9,621,551 2,196 87.67%

Bidar 1,703,300 5,448 70.51%

Gulbarga 2,566,326 10,954 64.85%

Mahakuta NA* NA* NA*

Pattadakal NA* NA* NA*

Six cities of Karnataka are announced to be developed as a smart cities.

In 2015, apart from smart cities, 26 cities of Karnataka are selected for implementing infrastructure development under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT).

40 40

The natural resources, policy incentives and infrastructure in the state favour investments in the IT/ITeS, biotechnology, engineering, electronics, automotive, textiles, agri- and food-processing sectors.

Karnataka’s favourable policies have encouraged industries to set up their R&D centres in the state. Bengaluru has about 401 R&D centres, the most in India.

Karnataka is making significant investments in industrial infrastructure, such as setting up industrial clusters and SEZs and PPP projects to provide an impetus to further industrial development.

In 2013-14, the state government of Karnataka had approved 255 projects with an investment of US$ 6.99 billion. This investment generated 1.71 lakh job opportunities. In 2014-15, the state government cleared 108 projects with an investment of over US$ 9.03 billion. The projects are expected to create 56,101 job opportunities. In June 2015, the Karnataka State High-Level Clearance Committee (SHLCC) cleared 5 projects with an investment of over US$ 0.33 billion. The projects are expected to create 3,532 jobs.


KEY INDUSTRIES


Source: Directorate of Industries and Commerce, Karnataka Economic Survey 2014-15

AUGUST 2015

Key industries in Karnataka

• IT and ITeS • Agro and food processing

(floriculture)

• Biotechnology • Aerospace

• Engineering • Animation

• Electronics and telecom • Electronic hardware

• Automotive • Tourism

• Textiles and apparel • Renewable energy

Micro, small and medium enterprises in Karnataka

Year MSME units Employment Employment per unit

2012-13 24,206 155,551 6.43

2013-14 25,966 167,347 6.44

2014-15 (upto December)

19,721 122,286 6.20

41 41

Karnataka has emerged as an information technology (IT) hub of India. Bengaluru is the fourth largest technological cluster in the world after Silicon Valley, Boston and London. About 50 per cent of the world's SEI CMM Level 5 certified companies are located in Bengaluru. The state is India’s largest software exporter, with electronics and computer software exports totalling US$ 32.19 billion as of 2014-15. The state accounts for about 40 per cent share in India’s electronic and software products exports. Karnataka has 47 IT/ITeS SEZs and dedicated IT investment regions. There are 2,160 IT companies in the state. The state houses 550,000 IT professionals or 1/3rd of the total IT professionals in the country. At least 400 Fortune 500 companies have outsourcing operations in Karnataka.


KEY INDUSTRIES – IT AND IT-ENABLED SERVICES … (1/2)

Some of the key players

• Wipro Technologies

• Infosys

• Genpact

• Accenture


Electronics and software exports from Karnataka (US$ billion)

Source: Visvesvaraya Trade Promotion Centre

23,09 28,19 28,72 29,53 32,19

20

10-1

1

20

11-1

2

20

12-1

3

20

13-1

4

20

14-1

5

AUGUST 2015

CAGR: 8.66%


KEY INDUSTRIES – IT AND IT-ENABLED SERVICES … (2/2)


Wipro Ltd

Infosys Technologies Ltd

Genpact

Accenture

• Wipro Ltd was established in 1945 and posted revenues of US$ 6.87 billion in 2014-15. The company has presence in areas such as IT services, product engineering, technology infrastructure services, BPO and other consulting solutions. The company provides services such as application development, deployment and maintenance, business intelligence and customer relationship management.

• Based in Bengaluru, the company has 72 plus global delivery centres and 50 plus industry-specific centres of excellence in more than 54 countries. In September 2009, the company launched its centre of excellence at its Electronic City campus to work with other leading IT firms for developing innovative IT solutions.

• Infosys Technologies Ltd was set up in 1981 and posted revenues of US$ 7.8 billion in 2014-15. The company operates in areas such as IT consulting, modular global sourcing, process re-engineering and BPO services. Infosys has 73 offices and 94 development centres in the US, India, China, Australia, Japan, the UK, Germany, France and many other countries and has marketing and technological alliances with companies such as IBM, HP, Microsoft and Oracle. The company has operations at multiple locations in Bengaluru, Mangalore and Mysore.

• Genpact was set up in 1997 in India. Formerly known as GE Capital International Services, the company’s net revenues in 2014-15 stood at US$ 2.2 billion. The company provides a wide range of business process, technology and knowledge services including finance and accounting, collections and customer relations, insurance, procurement and supply chain, analytics, software and IT infrastructure. Genpact employs around 60,200 employees. The company has one office in Bengaluru in Karnataka.

• Accenture is a global management consulting, technology services and outsourcing company with approximately 275,000 people serving clients in more than 120 countries. In 2014-15, Accenture India generated revenues of US$ 1.37 billion. The company has one consulting office and seven delivery centres in Bengaluru.

AUGUST 2015


KEY INDUSTRIES – BIOTECHNOLOGY … (1/2)



Karnataka has played a key role in India’s emergence as a significant player in the global biotechnology industry. Karnataka is home to nearly 60.0 per cent of the country’s biotech units.

One-ninety five of the total 340 biotech companies in India are located in Karnataka. The state has more than 6,800 scientists involved in biotech research.

Premier life sciences institutions such as Indian Institute of Science, National Centre for Biological Science and Jawaharlal Nehru Centre for Advanced Scientific Research are present in the state.

Sector-focused SEZs have been set up in Mysore, Mangalore, Hubli-Dharwar, Belgaum, Shimoga, Gulbarga, Kolar & Mandya.

Twelve biotechnology finishing schools are scheduled for development under the Millennium Biotech Policy.

An 86-acre biotechnology park, Bengaluru Helix, comprising the 52-acre Alexandria Knowledge Park in Bengaluru is currently under development.


• Biocon

• AstraZeneca India

• Jubilant Life Sciences Ltd

• GlaxoSmithKline Pharmaceuticals Ltd

More than 60 per cent of the biotechnology companies in India have a base in Bangalore and the state drives 50 per cent of the total revenues in India’s biotechnology sector.

India’s biotechnology industry is expected to reach US$ 100 billion by 2025, with Bangalore forming a significant part of it.

In 2014, the state had biotech projects worth US$ 2.4 million on offer, with the potential to provide 8,000 jobs in this sector.

AUGUST 2015


KEY INDUSTRIES – BIOTECHNOLOGY … (2/2)


Biocon

AstraZeneca India

Jubilant Life Sciences Ltd

GlaxoSmithKline Pharmaceuticals Ltd

• Biocon India was incorporated in 1978 as a joint venture between Biocon Biochemicals Ltd of Ireland and an Indian entrepreneur, Kiran Mazumdar-Shaw. The company is among the leaders in biopharmaceuticals and bioservices. Biocon has its corporate headquarter in Bengaluru.

• The company’s revenue was about US$ 486 million in 2014.

• AstraZeneca India was established in 1979. The company is involved in the areas of manufacturing/marketing of bulk drug chemicals, liquid formulations, tablets and capsules, injectibles and ointments for various disease segments such as cardiovascular, respiratory and maternal healthcare.

• The company’s manufacturing plant is located at Yelhanka and R&D centre is located in Bengaluru.

• Jubilant Life Sciences Limited (formerly Jubilant Organosys Ltd) is an integrated pharmaceuticals and life sciences company. The company is the largest Custom Research and Manufacturing Services (CRAMS) company and provides leading drug discovery & development solutions outside India.

• Jubilant has a manufacturing facility in Nanjangud, with around 625 employees.

• GlaxoSmithKline Pharmaceuticals Ltd was established in 1924 and is one of the oldest pharmaceutical companies in India.

• The company’s revenue was about US$ 562.5 million in 2014-15.

• GSK India product portfolio includes prescription medicines and vaccines. The company has a clinical development centre in Bengaluru.

AUGUST 2015



KEY INDUSTRIES – ENGINEERING … (1/2)


The engineering industry in Karnataka has positive prospects, given its performance.

The exports of engineering products have increased from US$ 1,605 million in 2010-11 to US$ 3,476.8 million in 2014-15, The engineering segment is the fastest growing sector of the state, which grew at a CAGR of 21.3% between 2010-11 and 2014-15. The state is exporting engineering products to Germany, China, South Korea, Brazil, USA, Malaysia, Thailand, South Africa and Singapore. A majority of the exporters in state are based in Bengaluru, Hubli, Mysore, Belgaum, Mangalore, and Shimoga.

Exports include machine tools, industrial machinery, cutting tools, castings, automotive components, electrodes, welding equipment, construction and earthmoving equipment, and helicopter spares.

A 300-acre SEZ has been created in Belgaum to develop a precision engineering and manufacturing supply chain ecosystem, which would be a great driver for manufacturing industries. Bharat Earth Movers Limited, Hindustan Machine Tools Limited and Bharat Heavy Electricals Limited are among the leading companies in this sector in the state.


• Bharat Earth Movers Limited (BEML)

• Hindustan Machine Tools Limited (HMT)

• Bharat Heavy Electricals Limited (BHEL)

• Saint-Gobain India

AUGUST 2015

Engineering products export (US$ billion)

1,61 1,72

2,31

2,98 3,48

20

10-1

1

20

11-1

2

20

12-1

3

20

13-1

4

20

14-1

5


KEY INDUSTRIES – ENGINEERING … (2/2)


BEML Limited

HMT Ltd

BHEL

Saint-Gobain India

• BEML Limited (formerly Bharat Earth Movers Limited) was established in 1964. BEML manufactures a wide range of earth moving and other heavy industrial equipment for the mining and civil engineering industries.

• BEML has a registered office in Bengaluru and units in Kolar Gold Fields, Mysore and Bengaluru. The company recorded revenues of US$ 609.6 million in 2014-15.

• HMT was established in 1953. The company manufactures various types of machine tools including watches, tractors, printing machinery, metal forming presses, die casting & plastic processing machinery, CNC systems & bearings.

• HMT has a manufacturing plant in Bengaluru.

• Bharat Heavy Electricals Ltd (BHEL) is the largest engineering and manufacturing enterprise in India in the energy-related/infrastructure sector. The company has 16 manufacturing divisions, two repair units, four regional offices, eight service centres, eight overseas offices and 15 regional centres.

• BHEL has an electronics division at Bengaluru. The company generated revenues of US$ 6.7 billion in 2014-15.

• Saint-Gobain India was established in India in 1996. The group comprises eight manufacturing companies in India for various products ranging from glass to engineering products.

• The company has a manufacturing plant in Bengaluru.

AUGUST 2015


KEY INDUSTRIES – TELECOMMUNICATIONS AND ELECTRONICS … (1/2)


Source: Department of Industries and Commerce

Karnataka is a leading state of the country in electronics and telecommunication.

The state has high-end research and development organisations such as Indian Institute of Science, Cosmic Industrial Laboratories Ltd, Indian Space Research Organisation (ISRO), CSIR Centre for Mathematical Modelling and Computer Simulation (CMMACS), National Aerospace Laboratories, Centre for Soft Matter Research and John F. Welch Technology Centre.

Karnataka has excellent telecom infrastructure with 140 of 170 towns connected by Optic Fibre Cables (OFC) network.

Bengaluru district is the major hub of the electronics and telecommunications industries. The other districts of Hassan, Tumkur, Mysore, Mangalore and Shimoga are the new destinations for promotion of electronics and hardware industries.

The state houses global giants such as Sanyo, AT&T, Siemens, GE, Motorola, Sony and Alcatel as well as national heavyweights such as BPL Limited and Indian Telephone Industries Limited.


• Bharat Electronics Ltd

• Nokia

• Siemens

• Philips Electronics India Ltd

AUGUST 2015

In 2015, the state government of Karnataka has announced plans to set up an Information Technology Investment Region (ITIR) near the Kempegowda International Airport (KIA) and proposed an investment of US$ 2.35 billion. The construction will be completed in two phases and the Karnataka Industrial Areas Development Board (KIADB) is in the process of acquiring 2,072 acres land for the first phase.

In 2015, the start-ups warehouse set up by the state government in association with Nasscom has attracted 170 start-ups. The state government has tied up with Nasscom for setting up the second start-ups warehouse.


KEY INDUSTRIES – TELECOMMUNICATIONS AND ELECTRONICS … (2/2)


Bharat Electronics Ltd

Nokia

Siemens

Philips Electronics India Ltd

• Bharat Electronics Limited (BEL) was incorporated in 1954 and is a multi-product, multi-unit, multi-technology company. Products manufactured by BEL are mainly categorised as systems/turnkey solutions, defence and non-defence products.

• The company has a manufacturing unit in Bengaluru. It achieved revenues of US$ 1.1 billion in 2014-15.

• Nokia is among the world leaders in mobile technology. The company started its India operations in 1995. India holds the distinction of being the second largest market for the company globally.

• The company has an R&D facility and a design studio in Bengaluru.

• Siemens set up operations in India in 1957. The Siemens Group in India is a unique player in the field of electrical and electronics engineering. The Group employs approximately 10,933 people and has 23 manufacturing facilities in India. Siemens has several offices in Bengaluru. The company generated revenues of US$ 1.8 billion in 2014-15.

• Philips has been operating in India for more than 75 years. The company is a leader in consumer electronics, healthcare and lighting systems. Philips employs more than 4,500 people in India.

• The company has an R&D facility – Philips Innovation Campus – in Bengaluru.

AUGUST 2015


KEY INDUSTRIES – AUTOMOTIVE … (1/2)



Karnataka has a vibrant auto industry with investments of around US$ 713 million and annual revenues of US$ 604 million. The state is the fourth largest state in India in terms of automotive production. The main locations for automobile industries are Bengaluru, Ramanagara, Kolar, Shimoga, Dharwad and Belgaum. General Motors Technical Centre, located in Bengaluru, is actively involved in research, design, analysis and development of vehicles and power trains for foreign destinations as well as the domestic market.

The state has three auto clusters, one industrial valve cluster and one auto component cluster. Two manufacturing hubs are coming up in Narsapur and Vemagal Industrial Areas in Kolar District. The government is in the process of announcing a Dedicated Automobile Policy. The automotive industry of Karnataka grew at a CAGR of 15 per cent during 2009 to 2014. Karnataka is recognised as a second major hub for automobile production in India.


• Toyota Kirloskar

• Volvo India

• TVS Motor Company

• Delphi Automotive Systems Pvt Ltd

In September 2013, Bosch (German auto component manufacturer) announced an investment of US$ 240 million over the next seven years in Bangalore for expanding its manufacturing and R&D capacities. In March 2015, Hero Motor Corp established a production unit near Dharwad at a cost of US$ 240.5 million and manufactures 1.8 million two-wheelers per annum from the unit. As per the final draft of Karnataka Industrial Policy 2014-19, the state will study the feasibility of setting up major auto parks at Dharwad, Kolar and Bidadi in Ramanagara district; and smaller auto parks in Belgaum, Shimoga, Mysore and Gulbarga.

AUGUST 2015


KEY INDUSTRIES – AUTOMOTIVE … (2/2)


Toyota Kirloskar

Volvo India

TVS Motor Company

Delphi Automotive Systems Pvt Ltd

• Toyota Kirloskar is a joint venture between Kirloskar group and Toyota Motor Corporation.

• The company has manufacturing facilities at Bidadi.

• Volvo India has a state-of-the-art bus manufacturing unit near Bengaluru. Globally, the Volvo Group has about 115,000 employees, production facilities in 19 countries, and sales activities in more than 190 countries.

• The company has increased its capacity to around 1,500-1,700 buses per annum in 2013-14 from 1,100 buses per annum earlier.

• Volvo India plans to invest US$ 115.6 billion to set up a truck and bus manufacturing facility in Malur, Kolar.

• TVS Motor Company is one of the largest two-wheeler manufacturers in India. The company is the flagship company of the TVS Group. TVS Motor has four manufacturing plants across India including Mysore.

• The company achieved a turnover of US$ 1.6 billion in 2014-15.

• Delphi India was incorporated in 1995 as a wholly owned subsidiary of Delphi. The company is a leading global supplier of electronics and technologies for automotive, commercial vehicles and other market segments.

• Delphi India has a technical centre in Bengaluru, which is the largest technical centre outside the US.

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Karnataka is one of the leading producers of cotton, silk and wool, which are the key raw materials required for textile manufacturing units. The cotton production in the state has increased from 23 lakh bales in 2013-14 to 28.0 lakh bales in 2014-15. The state produces 33.59 per cent of India’s silk. Silk production of the state was 9,645 metric tonnes in 2013-14 and 8,574 metric tonnes in 2014-15.

Karnataka is a major apparel sourcing destination for the global market. The state accounts for 20 per cent of the national garment production. There are approximately 0.38 million manufacturing units engaged in the textiles and garments sector at the organised and unorganised level. Karnataka has 105 skill development centres and 240 private training centres funded by the Department of Handlooms. In October 2013, the cabinet of Karnataka approved the New Textile Policy 2013-18. Under this policy, the state government is planning to invest US$ 1,650 million in the textile sector. The Textile Policy offers various incentives for investments in the textile sector; these include credit-linked capital subsidy, entry tax reimbursement and power subsidy.

In February 2015, the Karnataka government announced plans for a textile park at Yadgir in north Karnataka.


KEY INDUSTRIES – TEXTILES AND APPAREL … (1/3)


Source: Karnataka Economic Survey 2014-15, Directorate of Industries and Commerce


• Gokaldas Exports Limited

• Karnataka Silk Industries Corporation (KSIC)

• Himatsingka Seide

• Shahi Exports Private Limited

The Textile Policy offers various incentives for investments in the textile sector; these include credit linked capital subsidy, entry tax reimbursement and power subsidy.

The sector has potential for growth. Karnataka has an apparel park at Dodaballapur near Bengaluru and other mega textile parks in the other parts of the state.

As of May 2015, the state had one operational SEZ (Kiadb SEZ Hassan - Textiles) for the textile sector which is located at Hasan, Karnataka.

As of 2014-15, the state had 2,880 textile manufacturing units and 5,560 wearing manufacturing apparel units.

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AUGUST 2015

Production and employment in handloom and power-loom industries in Karnataka

Description Units 2013-14 2012-13 2014-15 (up to December)

Handloom production Million metres 46.09 47.63 41.29

Handloom employment Lakh 0.82 1.12 0.84

Power loom production Million metres 328.99 353.59 268.0

Power loom employment Lakh 2.56 2.60 2.94

Source: Ministry of Textiles

Handloom weavers and looms in Karnataka

Description Rural Urban Total

Total weaver households 33,854 3,826 37,680

Weaver population 121,688 12,650 134,338

Weaving workforce 69,686 7,163 76,849

Looms 35,662 4,826 40,486

Power-loom weavers and looms in Karnataka

No. of weaver households No. of weavers No. of looms

30,988 127,535 88,566




Gokaldas Exports Ltd

KSIC

Himatsingka Seide

Shahi Exports Pvt Ltd

• Gokaldas is one of the largest garment exporters in the country. The company commenced operations in 1979. In 2014-15, the company generated revenue of US$ 176.5 million.

• Headquartered in Bengaluru, the company has 30 factories across India. Gokaldas employs around 28,000 people and has a manufacturing capacity of 2.45 million garments per month as of 2014-15.

• Karnataka Silk Industries Corporation (KSIC) is a Government of Karnataka enterprise and is a leading manufacturer of silk.

• The company has two modern factories in T. Narasipura & Mysore, which are engaged in manufacturing silk goods from raw silk yarn to silk fabrics.

• Himatsingka Seide, incorporated in 1985, is a Bengaluru-based company dealing in natural silk fabric. In 2014-15, the company generated revenue of US$ 156.5 million.

• The company’s focus area is textile designing and manufacturing. Himatsingka Seide has a spinning division as well as a weaving division. The company’s brand atmosphere is India’s first luxury home textile brand, with an exclusive collection of more than 2,500 products and an installed capacity of 25 million metres per annum.

• Shahi Exports is among the top home furnishing exporters in the country. The company began operations in 1974 in Delhi and started manufacturing in Bengaluru in 1988. Shahi Exports has manufacturing facilities in Delhi, Bengaluru, Salem and Tirupur

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KEY INDUSTRIES – AGRO AND FOOD PROCESSING … (1/3)


Karnataka, with a good agricultural base including various food crops, offers immense scope for the development of food processing industries. Karnataka is the largest producer of coffee and cocoa in the country. The state accounts for around 71.3 per cent of the country’s total coffee production. Coffee production of the state increased from 211,100 metric tonnes (MT) in 2013-14 to 233,230 MT in 2014-15 and is estimated to reach to 256,500 MT by 2015-16.

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Karnataka’s coffee production

Location

Elevation (m MSL)

Rainfall (mm)

Main coffee types

Total area under coffee (hectares)

Average production (MT)

Main intercrops

Bababudangiris 1,000-1,500 1,750-2,200 Arabica 15,000 10,500 Pepper, cardamom,

arecanut

Chikmagalur 700-1,200 1,000-4,500 Arabica, Robusta

Arabica - 37,000 Robusta - 23,000


Pepper, cardamom, arecanut, orange, vanilla

Coorg 750-1,100 1,000-2,500 Arabica, Robusta



Pepper, cardamom, orange, banana, arecanut

Manjarabad 900-1,100 1,000-2,500 Arabica, Robusta



Pepper, cardamom, orange, arecanut, banana

Source: Coffee Board, Government of India




The state is one of the leading producer of flowers, spices, fruits and vegetables. Government of Karnataka had approved the establishment of food parks in six districts: Bengaluru rural, Tumkur, Shimoga, Davangere, Bijapur and Belgaum. These parks are in advanced stages of implementation. Most of the civil infrastructure work has been completed in Malur, Hiriyur, Bagalkot and Jewargi food parks, which had been approved by Ministry of Food Processing Industries, Government of India. The export of agriculture and processed food in the state grew at a CAGR of 11.8 per cent between 2010-11 and 2014-15. The export value has increased from US$ 146.9 million in 2010-11 to US$ 229.4 million in 2014-15.

Source: Economic Survey of Karnataka 2014-15, India coffee.org

Coffee exports from Karnataka (US$ million)

325 342 300

479

659 651 597

825

20

07-0

8

20

08-0

9

20

09-1

0

20

10-1

1

20

11-1

2

20

12-1

3

20

13-1

4

20

14-1

5

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• Hindustan Unilever Limited

• Nestle India

• Britannia Industries Limited

• United Breweries Group

CAGR: 14.2%

District

Final estimate of coffee production (2014-15) in MT

Arabica Robusta Total

Chikmagalur 38,200 40,880 79,080

Kodagu 18,030 104,090 122,120

Hassan 18,525 13,505 32,030

Sub total 74,755 158,475 233,230




Hindustan Unilever Ltd

Nestle India

Britannia Industries Ltd

United Breweries Ltd

• Hindustan Unilever Limited (HUL) is India's largest fast-moving consumer goods (FMCG) company, with leadership in home & personal care products and foods & beverages. The company recorded revenues of US$ 5.9 billion during 2014-15. HUL employs more than 16,000 people nationwide.

• The company has a manufacturing plant and an R&D centre at Bengaluru.

• Nestle has been in India for almost a century, with seven production facilities across the country, including one at Nanjangud, Karnataka. The company produces chocolates and confectionaries, prepared dishes and cooking aids, beverages and milk products and nutritional supplements. The company recorded revenues of US$ 415.2 million for first quarter of 2015.

• Britannia is a leading food processing company in India. The company manufactures food products such as biscuits, cheese and bread. Based in Bengaluru, the company recorded a revenue of US$ 1.18 billion in 2015-16.

• United Breweries Limited (UBL) is a flagship company of the UB Group. The company is also referred to as the beer division of the UB Group and is based in Bengaluru. UBL recorded a net turnover of US$ 774.3 million in 2014-15.

• The company has around 2,489 employees and manufactures products primarily under the Kingfisher, London Pilsner and UB Premium Ice brands.

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KEY INDUSTRIES – AEROSPACE … (1/2)


Source: Global Investors Meet 2012, MRO India, NRI Forum Karnataka, Karnataka Aerospace Policy 2012

Karnataka is known as the pioneer in the Indian aerospace industry after the establishment of Hindustan Aeronautics Limited (HAL) in Bangalore in 1940. Karnataka produces more than a quarter of India’s aircrafts and spacecrafts.

Around 984 acres of land is earmarked for an exclusive industrial area and sector-specific SEZ for aerospace industries near Bengaluru International Airport.

India’s first aerospace SEZ of 300 acres is operational at Belgaum.

Karnataka is the first state which announced the aerospace policy in the country. Karnataka Aerospace Policy has identified an investment potential of US$ 12.5 billion in this sector during 2013–23 and plans to develop aerospace clusters in different regions of the state.

Companies such as Air India, Boeing and Jupiter Aerospace have selected Karnataka for the development of MRO facilities.

The state government plans to develop an aerospace park spread over 1,000 acres near the Bengaluru International Airport (BIAL) with an investment of US$ 1.7 billion, with the intention of attracting global and domestic players in the Indian aerospace industry. The park is expected to be operational by 2017.


• Boeing

• Hindustan Aeronautics Limited

• Airbus Engineering Centre

• BEML Ltd

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In February 2015, Rolls Royce company sought 12 acres of land in Devanahalli Aerospace Park to ramp up their manufacturing capabilities in the aerospace sector in addition to the 6 acres already allotted in partnership with HAL.

The state is exporting aerospace products to the USA, UK, Germany, Russia Mauritius, Malaysia, Nepal, Oman and Ecuador.


KEY INDUSTRIES – AEROSPACE … (2/2)


Boeing

HAL

Airbus

BEML Ltd

• In India, Boeing is represented through its wholly owned subsidiary, Boeing International Corporation India Private Limited (BICIPL).

• Boeing established its first R&D centre in India – the Boeing Research & Technology Centre – in Bengaluru in 2009. The centre develops high-end technology solutions, particularly in the areas of aero structures and avionics.

• Hindustan Aeronautics Limited (HAL) is ranked 40th in Flight International's list of the World’s Top 100 aerospace companies in 2008.

• HAL has 19 production units and nine research and development centres in seven locations across India; of which, eight production units and four R&D centres are located in Bengaluru.

• Airbus’ industrial cooperation with India began in 1988 when an agreement was reached with Hindustan Aeronautics Limited (HAL) to manufacture passenger doors for the A320 aircraft.

• Specialising in high-tech aeronautical engineering, the Airbus Engineering Centre works hand-in-hand with other Airbus engineering offices around the world, as well as with the Indian aviation industry.

• Bharat Earth Movers Limited (BEML), a ‘Miniratna-Category-1’, plays a pivotal role and serves India’s core sectors such as defence, rail, power, mining and infrastructure.

• BEML is involved in the manufacturing of aircraft components/assemblies and MRO activities related to aerospace applications.

Source: Global Investors Meet 2012, KUM Karnataka, Airbus, BEML Ltd

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Major suppliers to the industry such as HP, AMD, NVIDIA and Microsoft are located in Bengaluru.

There has been a considerable increase in AVGC business outsourcing to Bengaluru.

A great deal of content for global blockbuster animation movies such as Life of Pi, Harry Potter, Kung Fu Panda, Prometheus and Pirates of the Caribbean was developed in Karnataka.

In January 2015, the state government has announced a 100 per cent exemption in stamp duty, waiver in electricity duty, property tax at par with residential rates and exemption in entry tax to the animation, visual effects, gaming and comics (AVGC) sector.

In 2015, the Government of Karnataka invested about US$ 0.41 million for boosting the animation sector and to make Karnataka a hub for the AVGC sector in the country.


KEY INDUSTRIES – ANIMATION … (1/2)


Source: PwC Report estimates, Karnataka AVGC Policy


• Technicolor

• TATA Elxsi

• Zynga

• DreamWorks

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KEY INDUSTRIES – ANIMATION … (2/2)


Technicolor

Tata ELXSI

Zynga Inc

DreamWorks

• Technicolor is a worldwide technology leader in the media and entertainment sector.

• Technicolor India offers world-class design and production services in animation and visual effects for motion pictures and television broadcast productions.

• Technicolor has been operating in India since 2007 and employs about 1,238 people.

• Tata Elxsi is a listed company and is headquartered in Bengaluru.

• The company is a global design company and offers key services including embedded product design, industrial design, animation & visual effects and systems integration.

• The company recorded revenues of US$ 140.1 million in 2014-15.

• Zynga Inc is the world's leading provider of social gaming services with more than 240 million monthly active users playing its games, which include CityVille, Zynga Poker and Scramble with Friends.

• Zynga's Bengaluru centre, started in 2010, has rapidly expanded to become the company's second largest operation in the world after its San Francisco centre.

• DreamWorks Animation creates high-quality entertainment, including CG animated feature films, television specials and series and live entertainment properties.

• DreamWorks Animation has been named one of the “100 Best Companies to Work For” by FORTUNE® Magazine for four consecutive years.

• The company has theatrically released a total of 25 animated feature films, including the franchise properties of Shrek, Madagascar, Kung Fu Panda and How to Train Your Dragon.

Source: Technicolor, TATA Elxsi, Zynga, DreamWorks

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KEY INDUSTRIES – ELECTRONIC HARDWARE … (1/2)


As of 2014-15, eighty of the 120 companies engaged in chip designing in India were located in Karnataka.

The state has the advantage of having low-cost skilled/technical manpower compared with other states.

Bengaluru is a global hub for R&D activity in the software industry, which will greatly aid the electronic hardware industry.

The ESDM (Electronic System Design & Manufacturing) Policy is expected to provide for development of three ESDM innovation centres that will provide complete infrastructure with the requisite design tools.

ESDM Policy also plans to set up seven high-class ESDM Manufacturing Clusters (EMCs) to provide infrastructure support including electronic manufacturing services and component manufacturing by 2020.

As per the policy, by 2020, ESDM sector is expected to generate turnover of US$ 400 billion, including exports to the tune of US$ 80 billion, with an investment of US$ 100 billion.

Source: Department of Electronics and Information Technology, GoI, Department of IT, BT and S&T, Karnataka,

ESDM Policy 2013, Karnataka


• Intel

• AMD

• Qualcomm Inc

• Nvidia

In February 2014, the central government gave its in-principle approval for setting up the first ESDM cluster development in Electronics City, Bangalore.

In 2014-15, the domestic production of electronic hardware in the state stood at US$ 42.4 billion whereas the export was US$ 32.18 billion.

AUGUST 2015


KEY INDUSTRIES – ELECTRONIC HARDWARE … (2/2)


Intel

AMD

Qualcomm Inc

NVIDIA

• Intel, headquartered in Santa Clara, is the world’s largest and highest valued semiconductor chip maker based on revenue.

• The Intel India Development Centre is a critical engineering design and development centre for key Intel products across CPUs, graphics, platforms and software with strong IT expertise and factory automation.

• AMD India plays a significant role in the design of microprocessors, AMD’s family of Accelerated Processing Units (APU), SoCs, graphics and media solutions.

• AMD has two design centres in India located in Hyderabad and Bengaluru.

• Qualcomm Incorporated is an America-based global semiconductor company that designs, manufactures and markets digital wireless telecommunications products and services.

• Qualcomm India Private Limited established its India operations in 1996 and has R&D centres in Bengaluru and Hyderabad.

• Nvidia manufactures Graphics Processing Units (GPUs) as well as System-on-a-Chip units (SOCs) for the mobile computing market.

• Nvidia established its design centre in Bengaluru in 2005. The centre includes a state-of-the-art facility and data centre that facilitates top-to-bottom designing of advanced graphics and digital media processors for a wide range of platforms.

Source: Company websites

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Karnataka boasts of a diverse flora and fauna and a 320-km natural coast line, which makes it a nature tourist's paradise. The state is ranked fourth in terms of the number of tourist arrivals in India. The Palace on Wheels of South India – the Golden Chariot Train tour – has been rated by Vanity Fair, UK, as among the top seven train journeys in the world. Karnataka has World Heritage Sites at Hampi and Pattadakal. Good infrastructure in the form of better road and rail connectivity as well as improving hospitality is also aiding tourism. The state attracted 111.8 million domestic tourists and 0.5 million international tourists in 2014. Tourist arrivals have increased at a CAGR of 18.7 per cent during 2005–2014. The sector contributes 14.8 per cent to the GSDP of Karnataka; plans are afoot to expand to 26 per cent by 2020. In Budget 2015-16, the state government announced plans to organise Pacific Asia Travel Association (PATA) fair in Bengaluru. The fair will be the largest fair in Asia Pacific as over 1,000 stakeholders from the tourism and travel industry are participating in this fair. State government has proposed an investment of US$ 0.83 million for this fair.

KEY INDUSTRIES – TOURISM ... (1/2)


Source: Socio Economic Survey 2014-15, Government of Karnataka.

Number of tourist arrivals in Karnataka (million)


25,2 36,7 38,4 37,5 33,0

38,5

84,1 94,7 98,6

111.8

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

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CAGR: 18.7%


KEY INDUSTRIES – TOURISM ... (2/2)

Major attractions


Medical tourism

• Karnataka is India’s most preferred destination for advanced medical care, and is referred to as the medical tourism hub of India.

• The state has the highest number of approved health systems, multi-specialty health centres and alternative health therapies in India.

Eco tourism

• Karnataka represents wide variations in topography – high mountains, hills and long coastal stretches.

• The state has five national parks, 26 wild life sanctuaries, pelicanries, heronries and elephant camps.

Adventure tourism

• Karnataka’s geography provide a vast spectrum of diverse attractions, making it a heaven for adventure sports and outdoor activities.

• Major attractions include white water rafting on the Kali river and aero sports at the Nandi hills.

Source: Visvesvarya Industrial Trade Centre, Global Investors Meet 2012

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Renewable energy contributes nearly 30.9 per cent of the state’s installed power capacity.

Karnataka is endowed with high renewable energy potential such as wind, hydro, solar, tidal and geothermal energy resources.

The renewable energy potential for the state is estimated at 30.2 GW, primarily from wind, solar, small hydro, co-generation and biomass sectors.

The government has allotted projects of 19,284.16 MW, amounting to nearly 64 per cent of the total potential.

Through the Renewable Energy Policy, the state plans to set up renewable energy economic zones by procuring 10.0 per cent of the land of SEZs and dedicating it for renewable energy.

The policy also mandates to keep aside 10.0 per cent of barren government land for renewable energy.

In 2015, renewable energy developer and technology provider, SunEdison has signed an MOU with Karnataka government to develop 5 GW of renewable energy projects within the state over the next five years.

The agreement includes details of an immediate plan to implement projects between 1,000 MW and 1,500 MW before December 31, 2016.

As of April 2015, the Karnataka government is working towards creating a consortium of about 10 countries endowed with abundant solar energy to benefit in terms of research and technological advancements in the field.


KEY INDUSTRIES – RENEWABLE ENERGY … (1/4)


AUGUST 2015




No Renewable energy

source Renewable energy potential

(MW)* Capacity allotted

(MW)** Capacity commissioned

(MW)**

1 Wind 13,983 13,071.72 2,685.44

2 Small hydro 3,000 2,989.61 785.21

3 Biomass 1,000 369.98 113.03

4 Co-generation 2,000 1,727.35 1,191.05

5 Municipal solid waste 135 25.5 0

6 Solar grid 10,000 1,100.0 84.0

Grand total 30,118 19,284.16 4,858.73

Source: KREDL, Central Electricity Authority, Karnataka Renewable Energy Policy *As of February 2015

**As of May 2015

AUGUST 2015




Karnataka has wind energy potential of 13,983 MW in India as of February 2015.

Currently, new projects with a capacity of more than 7,000 MW are at different stages of implementation and projects of 2,685.44 MW of capacity have been commissioned; this provides a huge opportunity to harness the untapped potential of the market.

Wind velocity in the state ranges from 0.85 m/s to 8.27 m/s.

Potential areas for wind power plants in the state include Chitradurga, Gadag, Chikmaglur, Bellary, Davangere, Koppal, Bijapur, Bagalkot and Belgaum.

Karnataka is counted among the top five destinations for wind energy in India.

Karnataka wind energy density map Wind energy

Source: Centre for Wind Energy, Chennai

0 – 100

100 – 200

200 – 250

250 – 300

300 – 400

400 – 500

Wind power density W/Sq m

AUGUST 2015




The state has a solar energy potential of 10,000 MW. Karnataka Solar Policy 2014-2021 plans to add solar generation of minimum 2,000 MW by 2021. Of the total allocated capacity, 84 MW has already been commissioned up to April 2015.

Many districts, especially coastal areas, receive solar radiation in the range of 5.1-6.4 kWh/m2 during summer, which is best suited for solar PV projects.

The central government’s policy mandates that solar energy consumption should increase to 3.0 per cent of the total consumption by 2022, up from the present consumption of 1.5 per cent.

Karnataka is the only state to have supported solar projects under the REC (Renewable Energy Certificate) mechanism.

In January 2015, SunEdison signed an MOU with the Karnataka government to develop 5 GW of renewable energy projects in the state in the next five years.

Karnataka solar resource map Solar energy

Source: Karnataka Solar Policy 2014-21, News articles

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Agency Description Contact information

Department of Industries and

Commerce (DIC)

• Anchor department for development/establishment of industries in Karnataka.

• Responsible for formulating and implementing industrial policies in the state.

No 49, South Block, Khanija Bhavan Race Course Road Bengaluru - 560 001

Phone: 91-80 2238 9901-08 Fax: 91-80-2238 9909

E-mail: [email protected] Website: www.karnatakaindustry.gov.in

Karnataka Udyog Mitra

(KUM)

• Single contact point for investors in the state

• Considers/forwards proposals to concerned agencies and communicates status to investors.

• Monitors implementation of approved projects.

• Single point of contact for information on various aspects including land availability, statutory approvals and coordination.

No 49, South Block, Khanija Bhavan East Entrance, Race Course Road

Bengaluru - 560 001 Phone: 91-80-2228 2392/5659,

Fax: 91-80-2226 6063 E-mail: [email protected]

Website: kum.karnatak.gov.in


KEY INVESTMENT PROMOTION OFFICES … (1/2)


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Agency Description

District Level Single Window Clearance Committee (DLSWCC)

• Functions under the chairmanship of respective Deputy Commissioners for industrial projects for investments less than US$ 0.65 million.

State Level Single Window Clearance Committee (SLSWCC)

• Functions under the chairmanship of Minister for Large and Medium Industries for investments that range between US$ 0.65–10.9 million.

State High Level Clearance Committee (SHLCC)

• Functions under the chairmanship of the Chief Minister for projects involving investment of more than US$ 10.9 million.

District Industries Centres • Nodal agencies for approval of projects at the district level.

• Primary focus is to promote small scale, village and cottage industries.

Other departments • Various sector specific departments such as Department of Tourism, Department

of Information Technology and Biotechnology, Department of Food Processing, Department of Textiles and Department of Mines and Geology.


KEY INVESTMENT PROMOTION OFFICES … (2/2)


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List of approvals and clearances required Departments to be consulted

Prior to setting up the unit

Registration Department of Industries and Commerce Department, Karnataka Udyog Mitra (Single Window Agency)

Allotment of land/shed Karnataka Industrial Areas Development Board

Permission for land use State Department of Industries, Department of Town and Country Planning

Site environmental approval State Pollution Control Board and Ministry of Environment and Forests

No objection certificate under Water and Air Act Karnataka State Pollution Control Board

Approval for construction activity and building plan Development Authority/Urban Local Body

Sanction of power State Electricity Board

No objection certificate Fire Department and Directorate of Factories and Boilers

Provisional trade tax registrations Central and State Excise Departments

Registration under Central Sales Tax Act Central and State Excise Departments


KEY APPROVALS REQUIRED … (1/2)


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List of approvals and clearances required Departments to be consulted

Before commencement of production

No objection certificate under Water and Air Act State Pollution Control Board

No objection certificate Fire Department and Directorate of Factories and Boiler

Permanent Trade Tax registration Central and State Excise Departments

Registration under Central Sales Tax Act, 1956 Central and State Excise Departments

After commencement of production/activity

Registration Department of Industries and Commerce and respective sector departments such as IT/BT/Tourism etc.


KEY APPROVALS REQUIRED … (2/2)


AUGUST 2015


APPROVAL PROCESS


Karnataka Udyog Mitra (Department of Industries and Commerce)

District Industries Centre

(Tiny industries < US$ 0.65 million)

State Level Single Window Agency (Large/mid-size industries US$ 0.65 –

10.9 million)

High Level Clearance Committee (Mega industries > US$ 10.9 million

Investor

Other sector-specific departments

KIADB (Land acquisition)

KSPCB (Pollution Board)

KPTCL (Electricity)

Inspectorate of Factories and

Boilers

Commercial tax

Land conversion

BWSSB/KUWSDB (Water supply)

Stage 1 Clearance of the project/industry Stage 2 Clearance

Source: Karnataka Udyog Mitra, Karnataka Industrial Areas Development Board and Department of Industries & Commerce

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Cost parameter Cost estimate

Industrial land (US$ per hectare) 129,191.5*

Power cost (US cents per kWh) Metropolitan area: 12.13

Non metro area: 8.7

Labour (US$/man year) 1,522

Water (per kilolitre) Bengaluru Metropolitan Area:

Non-domestic: US 59.7 cents to US 99.5 cents Industries: US 99.5 cents

Employee cost (US$/ man year)

Software developers 6,383

Team leads 14,893

Architects 21,276.5

Project managers 31,915


COST OF DOING BUSINESS IN KARNATAKA


Source: Industry sources, Ministry of Labour and Employment, Government of India, Bengaluru Water Supply and Sewerage Board, Karnataka Electricity Regulatory Commission pppindia

*Land cost has been estimated by computing the average cost of land at various Industrial Parks in Karnataka

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ESDM Policy 2013

• To facilitate, promote and develop the ESDM sector in Karnataka and make Karnataka a preferred destination for investment in this sector.

Read more

Objective

Solar Policy 2014-21

• To add solar generation of at least 2,000MW by 2021 in a phased manner.

• To encourage PPP model and R&D and innovation in the sector.

• To promote Roof Top Generation and Technologies.

• To transform Karnataka into an investor friendly state. Read more

Objectives

Aerospace Policy 2012

• To position Karnataka as a vibrant aerospace hub of Asia and a globally recognized aerospace destination by enabling the environment for holistic and sustained growth of the aerospace sector.

• Increase the contribution of the aerospace sector towards enhancing the share of industry in the state’s GSDP from 28.0 per cent to 32.0 per cent by 2022.

Read more

Objectives


STATE ACTS & POLICIES … (1/6)


AUGUST 2015

https://www.bangaloreitbt.in/docs/2013/3/ESDM-Policy-ENGLISH.pdf

Karnataka - June 2014_RN.pptx

http://www.gokenergy.gov.in/documents/Solar Policy English.pdf

http://www.gokenergy.gov.in/documents/Solar Policy English.pdf

http://www.karnatakaindustry.gov.in/Old-document/AerospacePolicy _CII_ 1_6.pdf

76 76

Information and Communication Technology Policy 2011

• To maintain Karnataka’s leadership in outsourced IT services.

• To retain Karnataka’s position as the state with the largest skilled workforce in India for IT services, products and R&D.

• To enable Karnataka to be the most preferred destination for MSMEs (micro, small and medium enterprises). Read more

Objectives

AVGC Policy 2012

• Encourage and support appropriate manpower development, infrastructure development and business development in the AVGC sector.

Read more

Objective

Integrated Agribusiness Development Policy 2011

• To position Karnataka on a sustained growth path in the field of agricultural and allied sectors through global technologies and innovative tools by creating enabling frameworks and state-of-the-art infrastructure facilities, thereby generating higher returns for farming communities.

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Objective




AUGUST 2015

http://www.advantagekarnataka.com/images/pdf/Informanton &Communications Technology Policy 2011.pdf

https://www.bangaloreitbt.in/docs/2012/09/KAVG Policy.pdf

http://www.advantagekarnataka.com/images/pdf/Integrated Agribusiness Development Policy 2011.pdf

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Karnataka Industrial Policy 2014-19

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Objective

Karnataka Renewable Energy Policy 2009-14

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Objectives

Karnataka Tourism Policy 2014-19

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Objective




• Development, propagation and promotion of renewable energy resources and technologies.

• Creation of a suitable environment for private sector participation in renewable energy power generation.

• To make Karnataka the most preferred investment destination through inclusive, sustainable and balanced growth.

• To develop Karnataka as a dynamic, sustainable and most-favoured tourism destination by increasing domestic & international visitations, offering high quality experience to visitors, facilitating and accelerating investments and improving livelihood opportunities at the local level.

AUGUST 2015

http://www.karnatakaindustry.gov.in/documents/Karnataka Industrial Policy 2009-14 English.pdf

http://www.advantagekarnataka.com/images/pdf/Karnataka-Renewable-Energy-Policy-2009-14.pdf

http://www.kumbangalore.com/Sections.aspx?secid=8&MenuID=18&ParentId=3

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Millennium Biotech Policy II 2009

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Objective

State Policy for Special Economic Zones 2009

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Objective

Karnataka Mineral Policy 2008

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Objectives




• To facilitate and expedite establishment of SEZs, at the same time safeguarding the environment and the interests of land owners.

• To increase the quality of human resources by supporting education and research institutions like the Institute of Agri-Biotechnology (IABT), the Institute of Bioinformatics and Applied Biotechnology (IBAB), the Centre for Human Genetics (CHG) and BT finishing schools; to create specific infrastructure such as focused biotech parks in the areas of agriculture, marine biotech and animal husbandry; to provide specific fiscal incentives.

• To optimise the state’s geological potential by scientific and detailed prospecting. State-of-the-art techniques will be encouraged by combining the resources of the private and public sectors.

• To resolutely pursue the policy of preserving flora, fauna, and bio-diversity and ensure that the invaluable forest wealth is safeguarded while granting mineral concessions. To promote transparency in granting mining concessions. The applicants who propose establishment of industries for value addition within the vicinity of the mineral bearing areas will be given priority.

AUGUST 2015

http://www.bangaloreitbt.in/docs/2012/09/Biotech_Policy_II.pdf

http://www.advantagekarnataka.com/images/pdf/State Policy for Special Economic Zones 2009 with Amendments.pdf

http://karnatakaindustry.gov.in/documents/Karnataka state mineral policy 2008.pdf

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Infrastructure Policy 2007

• To provide a fair and transparent policy framework for facilitating economic growth and encouraging Public–Private Partnerships (PPP) in infrastructure.

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Objective

Suvarna Vastra Neethi 2008-13 (Textile Policy)

• To achieve balanced, higher and sustainable growth in the entire textile value chain.

• To facilitate emerging units in critical areas such as production technology, market research, and development for exploiting global and domestic trade opportunities.

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Objectives




Nuthana Javali Neethi 2013 -18

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Objective

• To achieve higher and sustainable growth in the entire textile value chain from fibre to finished products, with emphasis on balanced regional development

• To facilitate emerging Technical Textiles in critical areas such as production, technology and research & development. The Policy will encourage integrated development in the sector aiming to sustainability of the textile units in the State

AUGUST 2015

http://idd.kar.nic.in/docs/infra_policy.pdf

http://www.textiles.kar.nic.in/Objectives.htm

http://www.textiles.kar.nic.in/New_Textile_Policy_-_2013-18.pdf




AUGUST 2015

Policy Department

Semiconductor policy 2010 Department of IT /BT and Science & Technology, Government of Karnataka

I4 (IT, ITES, Innovation, Incentives) policy

Department of Information Technology, Biotechnology and Science & Technology, Government of Karnataka

Karnataka Pharmaceutical policy 2012

Health and Family Welfare Department, Government of

Karnataka

New textiles policy 2013-18 Department of Handlooms and Textiles, Government of

Karnataka


CONFERENCES/SUMMITS FOR 2015-16


Summit / Conference Venue of Summit /

Conference Date

PATA Travel Mart 2015 Bengaluru 6-8 September 2015

World DIDAC India 2015 Bengaluru 9-11 September 2015

Mining - Exploration Convention and Trade Show Bengaluru 24-26 September 2015

IPLEX 2015 Bengaluru 25-27 September 2015

Indo Global Diabetes Summit & Medicare Expo Bengaluru 19-21 October 2015

ACETECH Bengaluru 9-11 October 2015

ONE SPIRITUAL WORLD: OSW 2015 Bengaluru 16-18 October 2015

Source: BIEC India

AUGUST 2015


CONFERENCES/SUMMITS FOR 2015-16


Source: BIEC India

AUGUST 2015

Summit / Conference Venue of Summit /

Conference Date

CeBIT 2015 Bengaluru 29-31 October 2015

EXCON 2015 Bengaluru 25-29 October 2015

Invest Karnataka 2015 Bengaluru 23-25 November 2015

Electronics For You Bengaluru 11-13 January 2016

IMTEX FORMING 2016 Bengaluru 21-26 January 2016

STONA 2016 Bengaluru 3-6 February 2016

Elecrama Bengaluru 13-17 February 2016

Indiawood 2016 Bengaluru 25-29 February 2016

83 83

Year INR equivalent of one US$

2004-05 44.81

2005-06 44.14

2006-07 45.14

2007-08 40.27

2008-09 46.14

2009-10 47.42

2010-11 45.62

2011-12 48.13

2012-13 54.31

2013-14 60.28

2014-15 60.28

2015-16 Q1 64.01

Average exchange rates


ANNEXURE


Source: Reserve Bank of India

AUGUST 2015

84 84

India Brand Equity Foundation (“IBEF”) engaged TechSci to prepare this presentation and the same has been prepared by TechSci in consultation with IBEF. All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of IBEF. This presentation is for information purposes only. While due care has been taken during the compilation of this presentation to ensure that the information is accurate to the best of TechSci and IBEF’s knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice. TechSci and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation. Neither TechSci nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this presentation.


DISCLAIMER


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