Karnataka's Bold Move: Doubling GCCs and Creating 350,000 Jobs by 2029

Karnataka, a southwestern state in India, has unveiled an ambitious draft policy aimed at significantly expanding its Global Capability Centres (GCCs) sector. The state government plans to double the number of GCCs to 1,000 and generate 350,000 new jobs by 2029, showcasing its commitment to economic growth and technological advancement.

This initiative marks a significant milestone for Karnataka, which is already known as the "Silicon Valley of India" due to its thriving IT industry. The state's capital, Bengaluru, has long been a hub for technology and innovation, hosting numerous multinational corporations and startups. However, this new policy aims to extend the benefits of technological development beyond the capital city.

The draft policy, a first of its kind in India, outlines several incentives to attract foreign companies to establish local offices. These include:

• Reimbursement of rental costs
• Partial refund of patent fees
• Exemptions from electricity duty based on job creation

The government's strategy also focuses on promoting growth in cities outside Bengaluru, such as Mangaluru, Mysuru, and Tumakuru. This approach aligns with the state's broader vision of balanced regional development and leveraging the potential of tier-2 and tier-3 cities.

In addition to these incentives, the policy proposes:

• Establishment of three new tech parks
• Funding for skills development courses
• Grants for research projects, with a special emphasis on artificial intelligence

These initiatives reflect Karnataka's commitment to fostering innovation, enhancing the skills of its workforce, and staying at the forefront of technological advancements.

The state government has set an ambitious target of generating $50 billion in economic output through these new offices by 2029. This goal underscores the significant role that GCCs play in India's economy, having evolved from low-cost outsourcing hubs to critical centers supporting various functions of their parent organizations.

Currently, India hosts over 1,700 GCCs, employing approximately 1.9 million people. A recent report by IT industry body Nasscom and consulting firm Zinnov projects that this number could rise to 2,100-2,200 by 2030, potentially employing 2.5 to 2.8 million people nationwide.

Karnataka's proactive approach in formulating this policy demonstrates its commitment to maintaining its position as a leader in India's IT and innovation landscape. The state has a rich history of pioneering IT policies and has been at the forefront of e-governance initiatives in the country.

The draft policy is open for public input until November 11, 2024, allowing stakeholders to contribute to shaping the future of GCCs in Karnataka. This collaborative approach aligns with the state's tradition of fostering partnerships between government, industry, and academia.

As Karnataka embarks on this ambitious journey, it not only aims to boost its economy but also to create a more diverse and resilient tech ecosystem. The success of this initiative could serve as a model for other states in India and potentially influence national policies on technology and innovation.