KARNATAKA THE SILICON VALLEY OF

MARCH 2017 (As of 24 March 2017) For updated information, please visit www.ibef.org 1 THE SILICON VALLEY OF INDIA

❖ Executive Summary………………….…. 3 ❖ Advantage State………………………... 5 ❖ Karnataka Vision 2020………………….6 ❖ Karnataka – An Introduction……………7 ❖ Karnataka Budget 2016-17……..….…20 ❖ Infrastructure Status………………..….23 ❖ Business Opportunities…………....….44 ❖ Doing Business in Karnataka………...79 ❖ State Acts & Policies...... 80

MARCH 2017 For updated information, please visit www.ibef.org 2 KARNATAKA THE SILICON VALLEY OF INDIA

EXECUTIVE SUMMARY … (1/2)

• At current prices, the gross state domestic product (GSDP) of Karnataka was about US$ 156.23 billion in 2015-16. Strong growth in GSDP • The per capita GSDP increased to US$ 2,557, growing at a CAGR of 12.91% between 2004-05 and 2015-16.

• 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 IT hub of India investment regions. • Exports of IT and electronic products from the state reached US$ 10.38 billion by the end of December 2015. Exports of IT and electronic products accounted for around 38% share in India's IT and electronic products exports and 52.89% share in Karnataka’s overall exports by the end of December 2015.

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

One of the preferred • The cumulative FDI inflows in the state from April 2000 to March 2016 were recorded at US$ 20.24 billion, the fourth highest in India after Maharashtra, Delhi and Chennai, and investment destinations accounted for a share of 7% in India’s cumulative FDI inflows.

Source: DIPP, Visvesvaraya Trade Promotion Centre, Karnataka Economic Survey 2015-16 Department of Industrial Policy & Promotion MARCH 2017 For updated information, please visit www.ibef.org 3 KARNATAKA THE SILICON VALLEY OF INDIA

EXECUTIVE SUMMARY … (2/2)

• As of September 2015, the total exports of the state were recorded at US$ 19.63 billion. Strong growth in export During 2015-16, exports contributed about 40 per cent in the state’s economy. Sectors such as biotechnology, computer software and electronics are major contributors in the overall exports from the state.

• Karnataka has 44 universities, 4,519 pre-university colleges, 206 engineering colleges Strong knowledge and 293 polytechnics, 47 medical colleges and 38 dental colleges. infrastructure • The state also houses 401 R&D centres; around 400 of the Fortune Global 500 companies outsource their IT services to firms in Bengaluru.

• Sugarcane is the major crop of the state with production estimates of about 40.5 million tonnes in 2015-16. The state’s total food grain production is estimated to be 11 million Significant agriculture tonnes in 2015-16. Karnataka is also the third largest producer of plantation crops in the base country.

• Karnataka boasts of a diverse flora and fauna and a 320 km natural coast line, which Strong growth in makes it a nature tourist's paradise. Tourist arrivals in the state increased from 25.2 million in 2005-06 to 120.5 million in 2015-16. The state has world heritage sites at Hampi and tourism sector . The sector contributes 14.8% to GSDP of Karnataka; plans are afoot to expand to 26% by 2020.

Source: Indian Minerals Yearbook 2014, Economic Survey of Karnataka 2015-16 Karnataka State Budget 2016-17 MARCH 2017 For updated information, please visit www.ibef.org 4 KARNATAKA THE SILICON VALLEY OF INDIA

ADVANTAGE: KARNATAKA

HighGrowing economic demand growth Rich talent pool 2022 June 2016 • GSDP expanded at a CAGR of • Karnataka is termed as the target 13.59% between 2005-06 and Knowledge Capital of India. 2015-16. • The state has successfully • Buoyant services (IT, tourism) and attracted skilled labour, especially, Solar energy Capacity industries driving economic growth. in the knowledge sector. share in total allocated for • Sector specific SEZs and SIRs Karnataka is among the states energy that produce a large number of Solar energy- facilitating growth. consumption doctors, engineers and medical is expected to 2,320.50 MW technicians in the country. reach 3% Advantage Karnataka Infrastructure Policy support

• Well-developed social, physical • Wide range of fiscal and policy incentives for businesses under the and industrial infrastructure. Karnataka Industrial Policy, 2014-19. • Good road, rail, water and air • Investor-friendly sector-specific connectivity and substantial port policies to promote industries such as IT, biotechnology, tourism and infrastructure. manufacturing. • Well-developed telecom • Simplified procedures for investment. infrastructure. • In January 2017, Karnataka department of Commerce and • Excellent healthcare facilities. Industries introduced an NRI policy to attract investments from non- resident Kannadigas.

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

MARCH 2017 For updated information, please visit www.ibef.org 5 KARNATAKA THE SILICON VALLEY OF INDIA

KARNATAKA VISION 2020

• Build infrastructure to boost • Develop the state as a vibrant productive potential of the knowledge society. economy. • Focus on job oriented growth • Various metro rail and mono through skill development of the rail projects are in progress. workforce.

• Increase rural incomes • Better governance through Education/ through greater viability of Infrastructure wider participation and deep Skill agriculture and allied activities. democratic decentralisation. development • Bridge the gap between • Encourage transparency and Poor and accountability. socially backward and backward Governance vulnerable groups and rest classes of the people. Vision 2020 • Build and sustain ’s Healthcare/ Industry leadership in science, Social technology and knowledge amenities • Improve access and based industries. Women availability of quality Tourism • Achieve a sustainable and healthcare for all. empowerment orderly process of industrialisation and urbanisation. • Preserve and promote • Enhance opportunities and Karnataka’s rich heritage. empower women across • Karnataka Tourism Vision economic, social and Group (KTVG) was set up in political spheres. October 2013 to advise on promoting tourism in state. Source: State Planning Department

MARCH 2017 For updated information, please visit www.ibef.org 6 KARNATAKA THE SILICON VALLEY OF INDIA

KARNATAKA FACT FILE

Some of the prominent cities in the state are , Bengaluru, , , Bidar, , Chikmagalur, Chitradurga, , -, , 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.

Parameters Karnataka Capital Bengaluru Source: Maps of India Geographical area (sq km) 192,000 Karnataka is located in the southern region of India. The state is surrounded by the in the west, in Administrative districts (No) 30 the northwest, Maharashtra in the north, Andhra Pradesh in the east, Tamil Nadu in the southeast, and Kerala in the Population density (persons per sq km) 319 southwest. Total population (million) 61.1

Languages spoken are , Tulu, Kodava, Hindi and Sex ratio (females per 1,000 males) 973 English. Literacy rate (%) 75.6

Male literacy rate 82.5

Female literacy rate 68.1

Source: Economic Survey of Karnataka 2015-16, Census 2011 Office of Registrar General, India. MARCH 2017 For updated information, please visit www.ibef.org 7 KARNATAKA THE SILICON VALLEY OF INDIA

KARNATAKA IN FIGURES … (1/2)

Parameter Karnataka All states Source

Economy 2015-16 2015-16

Directorate of Economics & Statistics of Karnataka, GSDP as a percentage of all states’ GSDP 7.66 100.0 Central Statistics Office Directorate of Economics & Statistics of Karnataka, GSDP growth rate (%) 13.05 8.71 Central Statistics Office Directorate of Economics & Statistics of Karnataka, Per capita GSDP (US$) 2,532 1,546 Central Statistics Office Physical Infrastructure

Installed power capacity (MW) 17,333.92 305,554.25 Central Electricity Authority, as of August 2016

Telecom Regulatory Authority of India - as of Wireless subscribers (No) 64,447,332 1,078,422,215 October 2016 Ministry of Communications & Information Internet subscribers (No) 23,960,000 367,480,000 Technology - as of September 2016 NHAI & Karnataka Roads and Building National Highway length (km) 6,502.29 100,087.08 Department, 2015-16

Major and minor ports (No) 1+10 13+187 India Ports Association

Airports (No) 5 125 Airports Authority of India

MARCH 2017 For updated information, please visit www.ibef.org 8 KARNATAKA THE SILICON VALLEY OF INDIA

KARNATAKA IN FIGURES … (2/2)

Parameter Karnataka All states Source

Social Indicators

Literacy rate (%) 75.6 73.0 Census, 2011

Birth rate (per 1,000 population) 18.5 21.6 SRS Bulletin

Investment

Department of Industrial Policy & Promotion, FDI equity inflows (US$ billion) 20.24 288.51 April 2000 to March 2016

Industrial Infrastructure

Department of Economic Affairs, Ministry of PPP projects completed & operational (No) 129 1,246 Finance, Government of India, July 2016

Department of Commerce, Ministry of Operational SEZs (No) 25 186 Commerce & Industry, July 2016

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

MARCH 2017 For updated information, please visit www.ibef.org 9 KARNATAKA THE SILICON VALLEY OF INDIA

ECONOMIC SNAPSHOT – GSDP

GSDP of Karnataka at current prices (US$ billion) At current prices, the gross state domestic product (GSDP*) of Karnataka stood at about US$ 158.89 billion in 2015-16. CAGR: 13.59% The GSDP of the state grew at a CAGR of 13.59% between 2005-06 and 2015-16. 158.8 115.9 90.0 94.6 96.2 102.0 Growth has been mainly driven by secondary and tertiary 67.2 67.3 71.2

sectors. 44.4 50.3

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

Source: Directorate of Economics & Statistics of Karnataka, Central Statistics Office GSDP* -Karnataka Socio Economic Survey 2015-16

MARCH 2017 For updated information, please visit www.ibef.org 10 KARNATAKA THE SILICON VALLEY OF INDIA

ECONOMIC SNAPSHOT – NSDP

NSDP of Karnataka at current prices (US$ billion) The net state domestic product (NSDP#) of Karnataka was recorded at about US$ 145.6 billion in 2015-16. CAGR: 145.6 13.91% The NSDP of the state grew at a CAGR of 13.91% 103.2 84.5 85.1 85.7 between 2005-06 and 2015-16. 80.7 60.3 60.4 63.4

39.6 45.2

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

Source: Directorate of Economics & Statistics of Karnataka, Central Statistics Office NSDP# -Karnataka Socio Economic Survey 2015-16

MARCH 2017 For updated information, please visit www.ibef.org 11 KARNATAKA THE SILICON VALLEY OF INDIA

ECONOMIC SNAPSHOT – PER CAPITA GSDP

GSDP per capita of Karnataka at current prices (US$) The state’s per capita GSDP^ was US$ 2,532 in 2015-16.

The per capita GSDP increased at a CAGR of 12.31% CAGR: between 2005-06 and 2015-16. 12.31% 2532 1,900 1,522 1,582 1,594 1,672 1,173 1,161 1,216

793 889

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

Source: Directorate of Economics & Statistics of Karnataka, Central Statistics Office Per Capita GSDP^ - calculated using GSDP million US$/Population in million

MARCH 2017 For updated information, please visit www.ibef.org 12 KARNATAKA THE SILICON VALLEY OF INDIA

ECONOMIC SNAPSHOT – PER CAPITA NSDP

The state’s per capita NSDP& in 2014-15 was NSDP per capita of Karnataka at current prices (US$) US$ 2,321. CAGR: The per capita NSDP increased at a CAGR of 11.40% 11.40% between 2005-06 and 2015-16. 2321 1692 1364 1414 1409 1405 1053 1043 1083

708 798

2007-08 2005-06 2006-07 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

Source: Directorate of Economics & Statistics of Karnataka, Central Statistics Office per capita NSDP& -calculated using NSDP million US$/Population in million

MARCH 2017 For updated information, please visit www.ibef.org 13 KARNATAKA THE SILICON VALLEY OF INDIA

ECONOMIC SNAPSHOT – PERCENTAGE DISTRIBUTION OF GSDP

In 2015-16, the tertiary sectorµ contributed 64.05% to the GSDP composition by sector state’s GSDP at current prices, followed by the secondary sector (22.97%) and the primary sector (12.98%). CAGR

At a CAGR of 16.31%, the tertiary sector has been the 51.02% fastest growing among the three sectors from 2004-05 to 16.31% 64.05% 2015-16. The growth has been driven by trade, hotels, real estate, finance, insurance, transport, communications and other services. 29.12% 11.50% The secondary sectorµ grew at a CAGR of 11.5% between 22.97% 2004-05 and 2015-16. This was driven by manufacturing, 9.61% 19.86% construction and electricity, gas & water supply. 12.98% 2004-05 2015-16 The primary sectorµ grew at a CAGR of 9.61% between 2004-05 and 2015-16. Primary Sector Secondary Sector Tertiary Sector

Source: Directorate of Economics & Statistics of Karnataka, Central Statistics Office, TechSci Research Sector-wise %share of GSDPµ -Karnataka Socio Economic Survey 2015-16

MARCH 2017 For updated information, please visit www.ibef.org 14 KARNATAKA THE SILICON VALLEY OF INDIA

ECONOMIC SNAPSHOT – AGRICULTURAL PRODUCTION

Production of major crops in Karnataka (lakh Sugarcane is a major crop of the state with production estimates of tonnes) about 40.50 million tonnes in 2015-16. The state’s total food grain production is estimated to be 11 million tonnes during 2015-16. Crop 2015-16 During 2015-16, major oilseeds production in the state is estimated Cereals 97.5 to be 0.96 million tonnes. Production of cereals and pulses in the Pulses 12.5 state is estimated to be 0.97 million tonnes & 0.12 million tonnes, respectively, in 2015-16. Total food grains 110 Oilseeds 9.6 In 2015-16, total production of major fruits in the state was 6.78 million tonnes. Sugarcane 405 Tobacco 0.82 Area under major crops in Karnataka (lakh hectares) Vegetables 84.78 Plantation 40.69 Crop 2014-15 2015-16

Spices 3.43 Cereals 49.45 45.58 Horticulture crops 202.19 Pulses 24.32 29.92

Source: Department of Agriculture & Corporation, Government of Karnataka Total food grains 73.77 75.5 Oilseeds 15.01 13.54 Sugarcane 4.4 6.34 Tobacco 1.05 0.99

Source: Department of Agriculture & Corporation, Government of Karnataka

MARCH 2017 For updated information, please visit www.ibef.org 15 KARNATAKA THE SILICON VALLEY OF INDIA

ECONOMIC SNAPSHOT – EXPORTS…(1/3)

During 2015-16, exports from the state contributed about Exports from Karnataka (in US$ billion) 40% to the state’s economy, with biotechnology, computer software and electronics being the major 52.02 exports. 45.47 47.57 48.18 36.28

As of September 2015, total exports from the state 19.63 aggregated to US$ 19.63 billion. Karnataka’s exports

increased at a CAGR of 9.4 per cent during 2010-11 to ⁾

2014-15. ¹

⁽

16

-

2011-12 2012-13 2013-14 2014-15 By the end of September 2015, electronics and software 2010-11

exports from the state reached US$ 10.38 billion, which 2015 constituted 53 per cent share of the state’s total exports.

Karnataka exports by commodity (US$ million)

Commodity 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16(1)

Electronics & computer software 23,093.16 28,186.16 28,723.99 29,528.87 32,186.46 10,384.96 Readymade garments 1,505.04 1,691.88 1,412.26 1,476.44 1,629.23 877.94 Petroleum & petroleum products 3,200.79 4,865.57 6,244.71 5,871.27 6,782.02 1,010.23 Engineering goods 1,605.44 1,716.81 2,314.12 2,982.42 3,476.78 2,634.43 Iron ores & minerals (incl granites) 212.19 235.61 319.46 122.59 124.25 1,062.93

Source: Visvesvaraya Trade Promotion Centre, Government of Karnataka; Note: 2015-16(1) : Till September 2015 MARCH 2017 For updated information, please visit www.ibef.org 16 KARNATAKA THE SILICON VALLEY OF INDIA

ECONOMIC SNAPSHOT – EXPORTS…(2/3)

Karnataka exports by commodity (US$ million)

Commodity 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16(1)

Silk products 148.62 139.83 120.42 107.83 91.90 32.53 Coffee 478.74 659.26 650.71 596.88 824.98 256.18 Basic chemicals, pharmaceuticals 634.15 1,054.85 1,331.80 1,376.91 978.10 520.92 and cosmetics Agriculture & processed food 146.87 158.53 211.56 215.66 229.43 412.92 products Gems and jewellery 4,361.46 4,929.98 4,508.01 4,010.45 3,649.30 2,182.85 Cashew and cashew kernels 128.67 183.25 155.96 199.07 249.67 43.69 Handicrafts 64.23 55.47 68.86 85.60 90.91 13.74 Leather products 44.28 66.49 83.23 74.65 90.08 21.38 Chemicals and allied products 74.09 99.73 90.41 93.23 158.43 109.22 Marine products 115.74 125.70 116.37 177.01 217.82 22.91 Plastic goods 123.41 125.49 145.09 116.12 62.38 8.55 Spices 98.64 145.44 166.45 190.78 186.79 20.31 Wool & woollen products 19.95 26.80 27.62 29.20 31.69 0.61 Miscellaneous 227.53 1,001.04 881.79 923.19 958.36 19.24

Source: Visvesvaraya Trade Promotion Centre, Government of Karnataka; Note: 2015-16(1) : Till September 2015 MARCH 2017 For updated information, please visit www.ibef.org 17 KARNATAKA THE SILICON VALLEY OF INDIA

ECONOMIC SNAPSHOT – EXPORTS…(3/3)

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

Source: Economic Survey of Karnataka 2015-16 MARCH 2017 For updated information, please visit www.ibef.org 18 KARNATAKA THE SILICON VALLEY OF INDIA

ECONOMIC SNAPSHOT – FDI INFLOWS & INVESTMENTS The state has a stable political environment. Successive state governments have recognised the importance of industries in the state and have FDI equity inflows, 2008-09 to 2015-16 (US$ billion) provided a conducive business environment to attract domestic as well as foreign entities. 4.12 Karnataka is ranked fifth in terms of attracting private sector investments in India. According to 3.44 the Department of Industrial Policy & Promotion 2 1.89 (DIPP), the cumulative FDI inflows from April 1.53 2000 to March 2016 were recorded at US$ 20.24 1 1.12 1.02 billion, the fourth highest in India after Maharashtra, Delhi and Chennai, and accounted for a share of 7% in India’s cumulative FDI 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 inflows. With a private equity & venture capital investment of USD2.51 billion from 280 deals, Karnataka stood at the 2nd position, among all other states. Investment intentions in terms of IEMs filed, LOIs/DILs issued in Karnataka 269 217 169 110 123 89 106 21.43 14.54 7.33 1.54 3.34 4.84 7.43

2010 2011 2012 2013 2014 2015 2016¹

Number of Investment Intentions Proposed Investments (US$ Billion)

Source: Department of Industrial Policy & Promotion Directorate of Economics and Statistics, Government of Karnataka 19 MARCH 2017 For updated information, please visit www.ibef.org KARNATAKA THE SILICON VALLEY OF INDIA

ANNUAL BUDGET 2016-17…(1/3)

Total consolidated budget size for 2016-17 was US$ 24.96 billion.

Budget highlights:

Under the Matsyashraya scheme, houseless fishermen will be provided with 3,000 houses.

Work on improvement of Malaprabha Canal will be implemented at a projected cost of US$ 146.95 million during 2016- 17. Within 2016, all school & college students will be enrolled under Aadhaar system to enhance services related to education in the state.

At an amount of US$ 0.76 million, 5 engineering colleges in the state will be employed with courses of IT, telecom, tourism, healthcare, retail, cyber security, etc. with Indo-German collaboration.

The new scheme - “Indira Suraksha” scheme will be executed in the state for families of farmers who have committed suicide with the integrated healthcare services.

The employment of smart card for the ticketing purposes will be initiated in the state along with the installation of Vehicle Transport System across the fleet of NWKRTC, NEKRTC and KSRTC.

Under the Chief Minister’s special package, US$ 15.27 million, US$ 76.38 million, US$ 122.21 million and US$ 38.19 million have been allocated for the lake enhancement, solid waste management, storm water drain manufacturing & improvement of 110 villages as well as city & town municipalities under Bruhat Bengaluru Mahanagara Palike (BBMP), respectively, in the state. Source: Government of Karnataka, Budget 2016-17

MARCH 2017 For updated information, please visit www.ibef.org 20 KARNATAKA THE SILICON VALLEY OF INDIA

ANNUAL BUDGET 2016-17…(2/3)

Primary & Secondary education : Major sector-wise allocations as per budget 2015- The state government has taken various initiatives such 16 & 2016-17 as, “Nali Kali”, “not for profit organization”, etc., for Annual allocation Annual allocation enhancement of quality education across all government Sector (US$ million) (US$ million) schools in the state. 2015-16 2016-17 Primary & secondary A comprehensive e-content programme, “IT@Schools in 2,475.40 2,653.98 Karnataka” will be launched by high school teachers for education delivering digital literacy to government high school Higher education 595.17 710.51 students. Energy 2,125.08 1,929.72 Reassurance of yoga education in government schools. Water resources 2,149.30 2,211.57 Higher education: Urban development 1,891.9 2,269.01 For accentuating knowledge as well as fiscal necessities Social welfare 756.4 834.70 in the state, Karnataka Education Policy will be deployed. Health and family 1,007.7 768.71 For presenting the state’s educational and cultural legacy, welfare the state government has decided to develop Karnataka Agriculture 644.16 663.61 Heritage Centre at a cost of US$ 0.30 million in Karnataka Folklore University. Horticulture 126.07 115.03 Sericulture 30.85 56.06 The state government has allocated US$ 1.52 million for allowing the government colleges to obtain UGC grant by Fisheries 49.27 46.13 getting the NAAC recognition. Source: Government of Karnataka, Budget 2015-16 Forest, environment and 291.47 245.79 Ecology

MARCH 2017 For updated information, please visit www.ibef.org 21 KARNATAKA THE SILICON VALLEY OF INDIA

ANNUAL BUDGET 2016-17…(3/3)

Agriculture: Recognition of special agricultural zones will be initiated in the state for focusing over the welfare of farmers and their operative agricultural techniques.

Under the programme “Suvarna Krishi Grama”, 100 villages across 4 district of 4 revenue divisions are proposed to be developed as model agricultural villages.

For delivering 90% funding for sprinkler units and drip irrigation, the state government decided to include around one lakh farmers under various schemes such as R.K.V.Y, “Chief Ministers Sookshma Neeravari Yojane” and Krishi Bhagya, for which an amount of US$ 45.82 million would be allocated during 2016-17. Energy: The creation of infrastructure for 50,000 pump sets will be initiated during 2016-17.

The state government is engaged in the creation of 2,000 MW of solar parks in the district of Tumkur, which is estimated to yield 600 MW by the end of 2017.

As per state budget 2016-17, US$ 1.92 billion has been allocated for the Energy Department.

CleanMax Solar, a based firm is planning to invest US$ 183.31 million for building a 200 MW solar farm project in the state. Water Resources: The work on enhancement of Malaprabha Canal is proposed to be initiated in the state for which the state government has allocated US$ 146.95 million.

As per state budget 2016-17, US$ 2.21 billion has been allocated for the Water Resource Department.

MARCH 2017 For updated information, please visit www.ibef.org 22 KARNATAKA THE SILICON VALLEY OF INDIA

PHYSICAL INFRASTRUCTURE – ROADS During 2015-16, NABARD loan assistance scheme took the manufacturing of achkout roads under its supervision. Moreover, construction work of 167 roads, at an estimated cost of US$ 21.34 million was fulfilled during 2015-16, while 91 roads are being constructed from RIDF-XVII to RIDF-XX, at an estimated cost of US$ 13.03 million .

With an outlay of US$ 455.69 million, the state government completed the development of major district roads of length 5,573 km during 2015-16. However, the construction of state highways of length 7,875 km along with 87 bridges was also completed during the same period.

Other development works include – improvement of municipality roads, Source: Maps of India development of Central Business District roads, development of roads under the Chief Minister’s Nagarothana scheme, manufacturing of Jattur The state is well connected to its five neighbouring bridge across Kagina river as well as Kudalasangama Adavihala bridge, states and other parts of India through 15 national etc. in the state. highways that run through the state. The Karnataka State Road Transport Corporation (KSRTC), established in August 1961, provides state road Road infrastructure in Karnataka (km) transport services. Road type 2015-16 During 2015-16, a total of 1,455.56 km and 759.76 km National highways 6.502.29 roads were constructed under “Namma Grama Namma State highways 27,163 Rasthe” scheme and PMGSY, respectively by the state government. Major district roads 55,515 Municipal roads 8,366 As per state budget 2016-17, the state government allocated US$ 551.32 million for the improvement of Other roads 155,545 rural roads in the state during 2016-17. Source: Ministry of Road Transport & Highways, Government of Karnataka, State Budget, 2016-17 MARCH 2017 For updated information, please visit www.ibef.org 23 KARNATAKA THE SILICON VALLEY OF INDIA

PHYSICAL INFRASTRUCTURE – RAILWAYS

Karnataka is well connected to other parts of the country Karnataka railway network through the railways. The state has a railway network of MG NG 3,250 km. Type of railway BG (km) Total (km) (km) (km) Karnataka Rail Infrastructure Development Corporation (K- South Central 268 0 0 268 RIDE) has been set up with the objective of developing and Railways implementing rail infrastructure projects in Karnataka with South Western private sector participation wherever feasible. K-RIDE has 2,516 97 84 2,697 Railways a chief executive officer deputed from the Railways Department and principal secretary, Infrastructure Southern Railways 37 0 0 37 Development Department, as its chairman. Railways 248 0 0 248

During 2015-16, Karnataka’s metro network of about 27 km Total 3,069 97 84 3,250 was made operational. In addition, by November 2015, the 6.50 km section between the terminal of Magadi and Status of major railway projects in Karnataka (2015-16) Mysuru road was initiated. However, development work for phase-I is expected to be completed by mid-2016. Railway project Status Ramanagara-Mysuru doubling track Commissioned for transport Further, the state government granted contracts for two Bidar-Kalaburagi new railway line Completed reaches of phase II, which are slated for completion by 2020. Bengaluru-Hasana railway line On stage of completion Bagalakote-Kuduchi railway line During 2015-16, an amount of US$ 67.36 million was Ginigera-Rayachuru railway line Approved by Government of released by the Government of Karnataka for development Karnataka; amount released for of various railway projects in the state. Gadaga-Wadi railway line land acquisition TumakuruRayadurga railway line

Source: Economic Survey of Karnataka, 2015-16, State Budget 2016-17 MARCH 2017 For updated information, please visit www.ibef.org 24 KARNATAKA THE SILICON VALLEY OF INDIA

PHYSICAL INFRASTRUCTURE – AIRPORTS

The Belagavi airport of the state has been provided with 370 acres of land during 2015-16. Work on the airport and runway extension is also expected to be accomplished by 2016-17.

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 PPP and started operations in May 2008.

During 2015-16, work on planning and preparation of terminal 2 and second parallel runway of Kempegowda International Airport was initiated. This Karnataka airport statistics (2015-16) construction will enable the airport to handle around Passenger Aircraft movement Airport Freight (tonnes) 35 million passengers per year. traffic (No.) (No.)

Further, work on development of Bengaluru 18,971,149 153,063 291,950 by PWD is expected to be concluded during 2016-17. Mangalore 1,674,251 13,805 936 Moreover, on the basis of PPP, the work on development of Shivamogga airport will also be Karnataka airport statistics (2014-15) executed during 2016-17. Bengaluru 15,401,392 133,488 279,475 Mangalore 1,307,083 11,501 684

Source: AAI, Global Investors Meet, Budget 2016-17 MARCH 2017 For updated information, please visit www.ibef.org 25 KARNATAKA THE SILICON VALLEY OF INDIA

PHYSICAL INFRASTRUCTURE – PORTS… (1/2)

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

37,036 39,365 36,566 31,350 32,941 25,290 Port

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016¹ New Mangalore Port

Ports 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 Major ports New Mangalore Port deepest inner harbour on the west coast. • Karwar • • Tadri The work on development of the second stage of Karwar port has been initiated under the concept of D-BOOST in PPP mode. • However, the bid document issue is under consideration by the state • Minor ports government. • • Hangarkatta As per budget 2016-17, the state government proposed allocation of • Malpe US$ 19.09 million for manufacturing of breakwaters on Karwar port’s • northern side. • Old Mangalore

Source: Indian Port Association, Note: 1Up to December 2015 MARCH 2017 For updated information, please visit www.ibef.org 26 KARNATAKA THE SILICON VALLEY OF INDIA

PHYSICAL INFRASTRUCTURE – PORTS… (2/2)

Cargo handled by various minor ports in Karnataka (‘000 MT)

Airport 2011-12 2012-13 2013-14 2014-15 2015-16(1)

Old Mangalore 87.83 165.93 120.26 115.89 66.16

Karwar 497.20 441.19 377.10 525.07 481.40

Malpe, Belekeri, Hangarkatta 6.81 4.74 3.00 2.31 1.22 & Kundapur

Total 591.84 611.86 500.36 643.27 548.71

During 2015-16, the state government initiated the work on development of Pavinakurve port, under PPP mode, in the district of Uttar Kannada. However, the draft concessional agreement and pre-feasibility report preparations related to the port are under process.

Additionally, the Infrastructure Development Department (IDD) has initiated the development of Tadri sea port at a projected amount of US$ 458.29 million. The state government has also assigned 8,000 sq km of port land at the minor port of Old Mangalore during 2015-16.

Source: Karnataka Economic Survey 2015-16; Note: 2015-16(1) : Till December 2015

MARCH 2017 For updated information, please visit www.ibef.org 27 KARNATAKA THE SILICON VALLEY OF INDIA

PHYSICAL INFRASTRUCTURE – POWER

As of August 2017, the state had an installed power generation capacity of 17,333.92 MW. Out of this, central utilities contributed 2,104.32 MW, private Installed power capacity (GW) utilities contributed 7,126.55 MW and 8,103.05 MW was under state utilities. 17.32 17.33 Of the total installed power generation capacity, 8,142.88 MW was 15.14 contributed by thermal power. Capacities of 475.86 MW and 5,115.38 MW 13.93 14.03 11.37 12.06 were contributed by nuclear & renewable power, respectively, while 8.52 8.69 hydropower contributed 3,599.80 MW. The state government has taken steps to undertake several new small, medium and large scale power projects. As per the state budget 2016-17, the total electricity production capacity added during 2015-16 was recorded to be 1,333.85 MW. However, the state government is planning to add

electricity production capacity of about 2,655.40 MW during 2016-17.

2010-11 2014-15 2008-09 2009-10 2011-12 2012-13 2013-14 2015-16

Karnataka Renewable Energy Development Limited (KREDL) was 2016-17(1) established in 1996 to promote the development of renewable energy sources in the state. Source: Central Electricity Authority 1Upto August 2016 As per budget 2016-17, the state government has initiated the setting up of a 2,000 MW solar park in Tumkur district which is estimated to produce 600 MW by the end of March 2017. Planning of construction of another 1,200 As per the budget 2016-17, the state government MW solar plant is being done by the state government during 2016-17. has allocated US$ 1.9 billion for enhancement of the power sector in the state. By March 2017, Government of Karnataka has planned to add 400 MW of solar power, in addition to the existing capacity of 524 MW of solar power The establishment work of a gas-based power being produced & consumed in the state. plant in Yelahanka is estimated to be initiated As of February 2017, to solve the water crisis in Bengaluru, the state during 2016-17 by the state government. Further, government has planned to draw water from the dead storage of KPCL is expected to create a 200 MW solar power Krishnaraja Sagar reservoir, at an estimated cost of US$ 5.94 million. plant during 2016-17.

MARCH 2017 For updated information, please visit www.ibef.org 28 KARNATAKA THE SILICON VALLEY OF INDIA

PHYSICAL INFRASTRUCTURE – TELECOM

Leading telecom companies operate in the state in the sectors of telecommunication network, basic telephony services (both wire Telecom infrastructure (As of October 2016) line and wireless) and networking services for telecommunication equipment. Wireless subscribers 64,447,332

According to Telecom Regulatory Authority of India (TRAI), there Wire-line subscribers 2,231,773 were 64.44 million wireless subscribers and 2.23 million wire-line (1) subscribers in Karnataka, as of October 2016. Internet subscribers 23,960,000

(2) The entire state is networked through optical fibre cables (OFCs) Post offices 9,667 of the state-owned company, Bharat Sanchar Nigam Limited (BSNL), as well as private companies such as Bharti, Reliance, Teledensity (in %) 106.29 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 Performance status of NOFN Project Communications provide the last-mile access directly to the (As of April 2016) customers in all major cities of Karnataka. No. of GPs in Phase-I 5,599 By the end of October 2016, 27,079,640 subscribers had Pipe Laid (kms.) 10,195 submitted requests for mobile number portability in Karnataka. Cabe Laid (kms.) 10,269 Out of the total allocated amount of US $91.65 million in Bharat Net project, BSNL invested US $61.10 million to increase the GPs for which cable laid 5,004 speed of gram panchayat connectivity in Karnataka, through high- speed broadband and FTTH (fibre-to-the-home). No. of GPs Lit 2,865 By March 2017, the state plans to provide Wi-Fi connectivity to all villages. The project will be jointly implemented by BSNL and Source: Telecom Regulatory Authority of India, Karnataka State Electronics Development Corporation Economic Survey of Karnataka, (1) As of September 2016; (2) As of September (KEONICS). 2015 GP-Gram Panchayat MARCH 2017 For updated information, please visit www.ibef.org 29 KARNATAKA THE SILICON VALLEY OF INDIA

DEVELOPMENT PROJECTS: URBAN INFRASTRUCTURE… (1/2)

Karnataka is among the top ten most urbanised states in Water supply Sewerage system India. The state is projected to reach an urban population • KUWSDB has implemented proportion of 50% by 2026. Some of the key areas of • surface-based drinking water The Bengaluru Water development are roads and flyovers, water supply, storm- supply schemes in 187 urban Supply and Sewerage water drainage, sewerage and urban transport. areas to provide assured safe Board (BWSSB) is The Karnataka Urban Water Supply and Drainage Board drinking water. responsible for (KUWSDB) is responsible for providing water supply & providing water sewerage facilities in 218 urban areas of the state, except the supply, sewerage • KUWSDB is implementing 26 areas serviced by the Bruhath Bengaluru Mahanagar Palike system & sewage schemes for shifting the source of (provides services in Bengaluru city & surrounding areas). disposal in the water from ground water to Bengaluru Karnataka has ten city corporations, 56 city municipal assured surface water. They are Metropolitan area. councils, 92 town municipal councils, 55 town panchayats & 5 to be completed by 2013. notified area committees. • 42 urban areas have As per budget 2016-17, an amount of US$ 2,269.01 million • Cauvery Water Supply Scheme has been proposed for urban development. As per budget been provided with (CWSS) Stage IV, Phases I–IV Underground 2016-17, under Rajeev Awas Yojana’s 20 schemes for 10 are being implemented to supply Drainage (UGD) cities, the construction of 22,000 houses is under progress in 810 MLD of water to about facilities in the state. the state. 600,000 connections. For the development of Nagarothana phase-3 project for 10 City Corporations, an amount of US$ 45.52 million has been During 2015-16, a private operator has been assigned by granted by the state government during 2015-16. the state government at Hubli-Dharwad for providing 24X7 As of March 2017, Nabard is planning to help the state with water supply under Karnataka Urban Water Supply technologies at a low cost, for conservation and efficient use Modernisation Programme (K.U.W.S.M.P). of water in the drought-affected districts, with the help of modern technologies such as water management practices, Moreover, the state government has finished the 27-km micro irrigation (more crop per drop) & adopting improved network of Metro rail and the phase-1 project is expected packages of agronomic practices. to be completed by mid-2016.

MARCH 2017 Source: JNNURM, Ministry of Urban Development For updated information, please visit www.ibef.org 30 KARNATAKA THE SILICON VALLEY OF INDIA

DEVELOPMENT PROJECTS: URBAN INFRASTRUCTURE … (2/2)

Development projects under Directorate of Municipal Administration:

Solid waste management proposals amounting to US$ 88.45 million were approved by the state government during 2015-16. The government aims to employ scientific solid waste management schemes across various municipalities during 2016-17, for which an amount of US$ 11.45 million has been allocated.

The state government aims at completing the work of enhancement of road network of 870 km during 2016-17.

Under Chief Minister’s Small and Medium Towns Development stage-2, grants have been fully released to every municipality in the state. The state government is aiming to begin the programmes’ stage-3 during 2016-17 at a cost of US$ 319.73 million.

During 2015-16, the grants under JNNURM and UIDSSMT have been minimised for the central government approved projects and the state government has decided to offer US$ 148.59 million to fill the gap.

The state government has allocated US$ 7.63 million for basic infrastructure development of Haveri, Chikkaballapura and Chamarajanagar towns of Karnataka during 2015-16.

Source: Budget 2016-17 MARCH 2017 For updated information, please visit www.ibef.org 31 KARNATAKA THE SILICON VALLEY OF INDIA

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

Under construction PPP projects - Karnataka Total cost Project name Sector Status (US$ million) Road Upgradation (Karnataka) Project Transport Under construction 108.66 Setting up of mechanized iron ore handling facilities at deep Transport Under construction 45.97 draft multi-purpose berth of NMPT Six laning of Belgaum - Dharwad Section Road Transport Under construction 79.63 Sports City cum International Convention Centre cum Star Social and commercial Under construction 149.3 Hotel cum Shopping Complex cum Residential Complex infrastructure 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 Social and commercial Construction and Maintenance of Public Toilets in Bengaluru Under construction 1.99 infrastructure Water sanitation Water Supply Scheme (Nanjangud) Under construction 4.74

Source: Department of Economic Affairs, Government of India

MARCH 2017 For updated information, please visit www.ibef.org 32 KARNATAKA THE SILICON VALLEY OF INDIA

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

PPP Projects – Karnataka Total cost Project name Sector Status (US$ million) Development of integrated solid Waste Treatment (100 TPD) Water sanitation Under construction 0.85 and Landfill Facilities at Belgaum Social and commercial Development of International Convention Centre at Devanahalli Under construction 174.19 infrastructure 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 Social and commercial Malleshwaram Market - Re-development Under construction 21.9 infrastructure Social and commercial New Puttanna Theatre and Parking Under construction 41.85 infrastructure Road Upgradation (Goa/Karnataka Border-Kundapur) Project Transport Under construction 437.79

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

Source: Department of Economic Affairs, Government of India MARCH 2017 For updated information, please visit www.ibef.org 33 KARNATAKA THE SILICON VALLEY OF INDIA

DEVELOPMENT PROJECTS: SEZs AND INDUSTRIAL CLUSTERS … (1/4)

Sector-wise Operational SEZs In Karnataka (as on July 2016) The state has 25 operational, 40 notified SEZs, one valid in-principle approval and 61 formal Precision approval SEZs as of July 2016. The Karnataka Multi product engineering Industrial Areas Development Board has 4% product developed 141 industrial areas spread across the 4% state. The state plans to develop and upgrade Pharmaceuticals Textile eight clusters around Bengaluru with an 4% 4% investment of US$ 348.4 million in coming years. Aerospace and The Karnataka State Industrial & Infrastructure industry Development Corporation has promoted more 4% than 135 start-up ventures in the state through Electronics equity participation and has provided debt to core hardware and industries such as steel, cement, mining and software/ITeS textiles, as well as new sectors such as IT, 4% aerospace and telecom. Hi-tech An IT Park project in has been taken up engineering by Karnataka State Electronics Development products and IT/ITeS Corporation Limited in 3 phases, during 2015-16, related services 68% with a built up area of 150 thousand sq ft at an 4% amount of US$ 3.65 million. Biotechnology 4%

Source: Department of Commerce, Ministry of Commerce & Industry

MARCH 2017 For updated information, please visit www.ibef.org 34 KARNATAKA THE SILICON VALLEY OF INDIA

DEVELOPMENT PROJECTS: SEZs AND INDUSTRIAL CLUSTERS … (2/4)

Some of the operational SEZs in Karnataka

Name/Developer Location Primary industry

Biocon Special Economic Zone Anekal Taluk, Banglore, Karnataka Biotechnology Hi-tech engineering products and Synefra Special Economic Zone Taluk, Karnataka related services Manyata Embassy Business park SEZ Bangalore, Karnataka IT/ITeS Varthur Hubli, Electronic City, Wipro Limited (Electronic City) IT Banglore, Karnataka Varthur Hobli, Sarjapur Road, Wipro Limited (Sarjapur) IT Karnataka Bantwal Taluk, Dakshina, Infosys Ltd. SEZ (Mangalore) IT/ITeS Kannada distt. , Karnataka Hebbal Industrial Area, Distt. Infosys Ltd SEZ (Mysore) IT/ITeS Mysore, Karnataka Vrindavan Techvillage Sez (formerly Bangalore, Karnataka IT/ITeS M.S. Vikas Telecom Ltd) Rmz Ecoworld Infrastructure Pvt. Ltd. Devarabeesana halli, Bhoganahalli [Formerly Adarsh Prime Projects Pvt. IT/ITeS and Doddakanahalli, Karnataka Ltd Kiadb Aerospace SEZ Karnataka Aerospace and industry Village Machenahalli and Nidige, District Electronics hardware Keonics Shimoga Shimoga, Karnataka and software/ITeS

Source: Department of Industries and Commerce, Karnataka MARCH 2017 For updated information, please visit www.ibef.org 35 KARNATAKA THE SILICON VALLEY OF INDIA

DEVELOPMENT PROJECTS: SEZs AND INDUSTRIAL CLUSTERS … (3/4)

Some of the operational SEZs in Karnataka

Name/Developer Location Primary industry

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 Precision engineering Quest special Economic Zone Belgaum district, Karnataka 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 KIADB Industrial Area, Taluka Hebbel, Hootagally, Larsen and Toubro SEZ IT/ITES District, Mysore, Karnataka

Source: Department of Industries and Commerce, Karnataka MARCH 2017 For updated information, please visit www.ibef.org 36 KARNATAKA THE SILICON VALLEY OF INDIA

DEVELOPMENT PROJECTS: SEZs AND INDUSTRIAL CLUSTERS … (4/4)

Some of the SEZs with formal approvals

Name/Developer Location Primary industry

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 Near Mangalore Port-based for hi-tech engineering products Suzlon Infrastructure Ltd Port 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

Source: Department of Industries and Commerce, Karnataka

MARCH 2017 For updated information, please visit www.ibef.org 37 KARNATAKA THE SILICON VALLEY OF INDIA

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. Literacy rates (%) Literacy rate 75.6 In terms of the number of universities, Karnataka ranks fifth Male literacy 82.5 among all Indian states and union territories, with 44 universities. Of these, 24 are state public universities and 11 are private Female literacy 68.1 deemed universities.

The state has 4,519 pre-university colleges to impart general Educational infrastructure (No) 2015-16 education. There are more than 1 million students in the pre- university colleges. Institute type Number Enrolments Medical colleges 50 6,245 There are 293 polytechnics and 206 engineering colleges to Ayurvedic colleges 56 2,843 provide technical education in the state. Homoeopathic 11 856 For the development of basic facilities such as – laboratory, colleges library, new buildings, toilets, drinking water facility in government Unani colleges 5 201 schools and colleges, an amount worth US$ 18.25 million would be provided. Naturopathy & Yogic Sciences 4 172 (BNYS) Under Shikshakara Shikshana scheme, DSERT, DIETs and CTE would be upgraded. Under this scheme, Shaikshanika Adhalath Dental colleges 38 2,700 and TESS education centers would be opened in the offices of Pharmacy colleges 61 4,784 BEOs, DIETs, DDPIs and CTEs in the state. Nursing colleges 287 12,725

Source: Economic Survey of Karnataka 2015-16 Census 2011 MARCH 2017 For updated information, please visit www.ibef.org 38 KARNATAKA THE SILICON VALLEY OF INDIA

SOCIAL INFRASTRUCTURE – EDUCATION … (2/2) As per economic survey 2015-16, the state participation in primary education is significant as 82.91 per cent of the lower primary and 64.51 per cent of the higher primary schools are managed by Department of Education. Karnataka education statistics (2015-16) In 2015, key MoUs were signed by the government to attract US$ 272.3 million worth of investments for higher Lower primary: 26,118 Higher primary: 34,795 education and announced to set up a new IIT in Karnataka. Number of schools In December 2016, Karnataka State Education Policy was Secondary schools: enacted to phase out single-discipline universities and 15,140 Kannada University, teaching subjects such as political School dropout rate Lower primary: 2.37 science, folklore, etc. With the implementation of the policy, such institutes would adopt broader-based education policy (in %) Higher primary: 2.54 in the next few years. Average: 23.33:1 Karnataka is home to several premier institutions: Pupil-teacher ratio Aided schools: 42.05:1 Indian Statistical Institute. Unaided schools: 30.33:1 Indian Institute of Science. Source: Economic Survey of Karnataka 2015-16 Indian Institute of Management. National Law School of India University. Institute for Social and Economic Change. University of Agricultural Sciences, Bengaluru. Kannada University, Hampi.

MARCH 2017 For updated information, please visit www.ibef.org 39 KARNATAKA THE SILICON VALLEY OF INDIA

SOCIAL INFRASTRUCTURE – HEALTH... (1/2)

Three-tier health infrastructure comprising primary health centres, Health indicators (2015) health units, community health centres and sub-centres is available in the state. Beds per 100,000 population 99 1 Birth rate 18.3 The policy of the Government is to establish one primary health 1 Death rate 7.0 centre for every 30,000 inhabitants, one dispensary for every 2 15,000–20,000 inhabitants and one sub-centre for every 5,000 Infant mortality rate 31 inhabitants. Life expectancy at birth (years)

A total of 108 ambulance services have been availed by around Male (2015) 63.6 60,693 people in the state during 2015-16. Moreover, the state Female (2015) 67.1 government also provided 30 bike ambulance services in urban areas. Total Facilities No of institutions As per budget 2016-17, implementation of “Indira Suraksha” scheme (As of November, 2015) would be initiated in the state during 2016-17, to offer integrated Subcenters 9,416 healthcare services to the families of those farmers who have Community health 317 committed suicide. centres Primary health centres 2,437 As of November 2015, the state has 12,481 active health institutions Sub district hospital 539 out of total 12,750 health institutions in the state. District hospital 41 Total institutions 12,750 Under the assistance of National Health Mission, at a cost of US$ 8.09 million, trauma centres will be established across 5 places, under the scheme of Aapathbandhava for offering emergency Source: Economic Survey of Karnataka 2015-16, treatment to highway accident victims. Ministry of Health & Family Welfare Sample Registration System (SRS) Bulletin Sep, 2014 , 1Per thousand persons, 2Per thousand live births, MARCH 2017 For updated information, please visit www.ibef.org 40 KARNATAKA THE SILICON VALLEY OF INDIA

SOCIAL INFRASTRUCTURE – HEALTH ... (2/2)

Various other programmes to be included under the National Health Mission during 2016-17 include:

Establishment of oral cancer detection programme across the state’s districts at an allocated amount of US$ 0.25 million.

Establishment of a 25 bed special dialysis unit in Bengaluru’s K.C General Hospital at an estimated cost of US$ 0.68 million.

Extension of mobile health service units to villages with no transport and hospital facility.

Under the “Free Laboratory Scheme”, establishment of free diagnostic centres in government hospitals for treating the ill patients.

The state government is planning to construct District Ayush Integrated Hospitals having a capacity of 50 beds in Davangere and Chikkaballapura and 10 beds in , T. Narsipur and Dandeli, at an estimated cost of US$ 0.91 million,.

The state government is also planning to establish district hospitals with an investment of US$ 9.16 million in the state.

Source: Economic Survey of Karnataka 2015-16, Ministry of Health & Family Welfare Sample Registration System (SRS) Bulletin Sep, 2014 , 1Per thousand persons, 2Per thousand live births, MARCH 2017 For updated information, please visit www.ibef.org 41 KARNATAKA THE SILICON VALLEY OF INDIA

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.

During 2015-16, the state government finished the construction of swimming pools across Hanagal, Mudubidire and Harihara and is planning to complete swimming pool construction at Sagar during 2016-17. The government has also decided to develop playgrounds equipped with volleyball, kho-kho, throwball and kabaddi courts across selected villages in association with Panchayath Raj and Rural Development departments.

Further, the monuments of Srirangapatna and Hoysalas along with the monuments and forts of Deccan Sultanate have been registered in the provisional list of World Heritage sites during 2015-16. Moreover, as per the budget 2016-17, the International Museum of Konkani Culture would be established in Mangaluru during 2016-17, at an estimated cost of US$ 0.38 million. Similarly, with US$ 0.15 million, the state government is aiming to set up the museums at Bagalkot and Bidar.

A grant worth US$ 0.30 million will be extended to Karnataka Janapada Parishat and an amount of US$ 3.81 million will be given to Gadinadu Abhivrudhi Pradhikara by the state government during 2016-17.

MARCH 2017 For updated information, please visit www.ibef.org 42 KARNATAKA THE SILICON VALLEY OF INDIA

SMART CITIES

As of March 2016, announcements have been made to setup six cities of Karnataka as smart cities. As per the budget 2016-17, and Belgaum have been selected under the initial stage of Smart City Abhiyan. During 2015-16, 27 cities were selected under the central government’s Atal Mission for Rejuvenation and Urban Transformation Scheme (AMRUT). The state government has proposed various schemes under AMRUT as per the budget 2016-17. Belagavi For the Smart City Mission project, the government is set to release US$ 176.71 Hubali-Dharwad million, during 2017-18. Devengere Population, area & literacy rate of identified smart cities in Karnataka

Cities Population Area (sq km) Literacy rate Tumakuru Shivamoga Mangaluru 774,785 184.45 94.03% Belagavi 488,292 94 78% Mangaluru Shivamogga 322,505 70.1 88.02% Hubli-Dharwad 943,788 200 86.79% Tumakuru 2,678,980 10,597 75.14% Davanegere 434,971 72 84.90%

Source: Census 2011 & TechSci Research MARCH 2017 For updated information, please visit www.ibef.org 43 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES

The natural resources, policy incentives and infrastructure in the state favour investments in the IT/ITeS, biotechnology, engineering, electronics, Key industries in Karnataka automotive, textiles, agri- and food-processing sectors. • Agro and food processing • IT and ITeS (floriculture) Karnataka’s favourable policies have encouraged • Biotechnology • Aerospace industries to set up their R&D centres in the state. Bengaluru has about 401 R&D centres, the most in • Engineering • Animation India. • Electronics and telecom • Electronic hardware • Automotive • Tourism Karnataka is making significant investments in industrial infrastructure, such as setting up industrial clusters and • Textiles and apparel • Renewable energy SEZs and PPP projects to provide an impetus to further industrial development. Total number of micro, small and medium enterprises in During 2015-16, government land of 11,994 acres was Karnataka passed to the Karnataka Industrial Areas Development Employment Year MSME units Employment Board. The formation of Invest Karnataka 2016 in the per unit state is expected to offer US$ 26.73 million for the enhancement of infrastructure facilities among existing 2012-13 24,206 155,551 6.43 areas of industrialisation. Further, it is also projected to 2013-14 25,966 167,347 6.44 set up a new cashew technology centre in the district of Uttar Kannada of the state. 2014-15 28,742 175,469 6.10 2015-16 (up to 19,208 146,225 7.61 December 2015)

Source: Directorate of Industries and Commerce, Economic Survey of Karnataka, 2015-16 MARCH 2017 For updated information, please visit www.ibef.org 44 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – IT AND IT-ENABLED SERVICES … (1/2) Karnataka has emerged as an information technology (IT) hub of India. Electronics and software exports from Karnataka Bengaluru is the fourth largest technological cluster in the world after (US$ billion) Silicon Valley, Boston and London. CAGR: 8.66 % About 50 per cent of the world's SEI CMM Level 5 certified companies are located in Bengaluru. 28.72 29.53 32.19 23.09 28.19 The state is India’s largest software exporter, with electronics and 10.38 computer software exports totalling to US$ 10.38 billion during 2015-

(1) -

16 . The state accounted for about 38 per cent share in India’s ⁾ ¹

electronic and software exports during 2015-16(1). ⁽

16

2015

2011-12 2012-13 2013-14 2014-15 Karnataka has 47 IT/ITeS SEZs and dedicated IT investment regions. 2010-11 There are 3,500 IT companies in the state. The state houses 550,000 Some of the key players IT professionals or 1/3rd of the total IT professionals in the country. • Wipro Technologies At least 400 Fortune 500 companies have outsourcing operations in • Infosys Karnataka. As of September 2015, the total enrolments of people in the • Genpact sector was recorded to be 0.446 million. • Accenture The state government has formulated a new Karnataka Startup Policy for assessing the progress of startup companies during 2015-16. The state has earmarked US$ 11.20 million for the creation of the biggest eco-system for start-ups. The incubation As per the state budget 2016-17, the state government will set up a centre will be set up in association with Karnataka State technology incubation centre during 2016-17 in Doddaballapura town Electronics Development Corporation (KEONICS) and will for the endorsement of startups related to technology in association have all necessary infrastructure for start-ups. with Texas University. According to India Hiring Intent Survey 2017, there will be 5- During 2016-17, the state government aims to establish 10 new 10% increase in hiring by BPO/KPO and ITeS companies in incubators in the state’s graduate and professional institutes, under the the state in the coming years. network of New Age Incubation. Source: Visvesvaraya Trade Promotion Centre; ’Note: 2015-16(1) : till September 2015

MARCH 2017 For updated information, please visit www.ibef.org 45 KARNATAKA THE SILICON VALLEY OF INDIA

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

• Wipro Ltd was established in 1945 and recorded revenues of US$ 7.82 billion during 2015-16. The company has presence in areas such as IT services, product engineering, technology infrastructure Wipro Ltd 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$ 9.53 billion in 2015-16. The Infosys Technologies Ltd 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 • 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$ 2.27 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 • Accenture is a global management consulting, technology services and outsourcing company with approximately 275,000 people serving clients in more than 120 countries. In 2015-16, Accenture generated revenues of US$ 8.97 billion. The company has one consulting office and seven delivery centres in Bengaluru.

MARCH 2017 For updated information, please visit www.ibef.org 46 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – BIOTECHNOLOGY … (1/2)

Karnataka has played a key role in India’s emergence as a India’s biotechnology industry is expected to reach US$ significant player in the global biotechnology industry. Karnataka 100 billion by 2025, with Bangalore forming a significant is home to nearly 60.0 per cent of the country’s biotech units. part of it.

The state consists of over 300 Biotech companies and has more As per state budget 2016-17, the state government than 6,800 scientists involved in biotech research. established Bengaluru Bio-innovation Centre with an investment of US$ 8.55 million for enabling MSMEs to Premier life sciences institutions such as Indian Institute of access high-end laboratory and instrumentation facilities. Science, National Centre for Biological Science and Jawaharlal Nehru Centre for Advanced Scientific Research are present in the Sub-regional science centres at Vijayapura, Tumakuru, state. Davangere, Udupi, Chikkodi, Chittapur and Chikmagalur would be established in 2015-16 with an investment of Sector-focused SEZs have been set up in Mysore, Mangalore, US$ 0.66 million. Hubli-Dharwar, Belgaum, Shimoga, Gulbarga, Kolar & Mandya. The state government announced its plans to introduce Twelve biotechnology finishing schools are scheduled for 100% reservation for Kannadigas in all private sector development under the Millennium Biotech Policy. industries, including biotechnology firms.

An 86-acre biotechnology park, Bengaluru Helix, comprising the 52-acre Alexandria Knowledge Park in Bengaluru is currently Some of the key players under development. • Biocon More than 60 per cent of the biotechnology companies in India • AstraZeneca India have a base in Bangalore and the state drives 50 per cent of the • Jubilant Life Sciences Ltd total revenues in India’s biotechnology sector. • GlaxoSmithKline Pharmaceuticals Ltd

Source: Economic Survey of Karnataka 2015-16 MARCH 2017 For updated information, please visit www.ibef.org 47 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – BIOTECHNOLOGY … (2/2)

Biocon • 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. In 2015-16, the company recorded revenues of about US$ 545.37 million.

• AstraZeneca India was established in 1979. The company is involved in the areas of AstraZeneca India 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. • In 2014, 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 Jubilant Life pharmaceuticals and life sciences company. The company is the largest Custom Research and Sciences Ltd Manufacturing Services (CRAMS) company and provides leading drug discovery & development solutions outside India. • The company’s revenue was about US$ 229.30 million during the last quarter of FY 2016. Jubilant has a manufacturing facility in Nanjangud, with around 625 employees.

GlaxoSmithKline • GlaxoSmithKline Pharmaceuticals Ltd was established in 1924 and is one of the oldest Pharmaceuticals Ltd pharmaceutical companies in India. • At the end of third quarter of 2015-16, the company recorded a revenue of US$ 112.37 million. • GSK India product portfolio includes prescription medicines and vaccines. The company has a clinical development centre in Bengaluru.

MARCH 2017 For updated information, please visit www.ibef.org 48 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – ENGINEERING … (1/2)

Engineering products exports (US$ billion) The engineering industry in Karnataka has positive prospects, given its performance. CAGR: 10.31% 3.48 Exports of engineering products have increased from US$ 2.98 2.63 1,605 million in 2010-11 to US$ 2,634.43 million in 2015-16, 2.31 The engineering segment is the fastest growing sector of the 1.61 1.72 state, which grew at a CAGR of 21% between 2010-11 and 2015-16. The state is exporting engineering products to

Germany, China, South Korea, Brazil, USA, Malaysia, ⁾

Thailand, South Africa and Singapore. A majority of the ¹

exporters in state are based in Bengaluru, Hubli, Mysore, ⁽ 16

Belgaum, Mangalore, and Shimoga. -

2010-11 2011-12 2012-13 2013-14 2014-15 2015 Exports include machine tools, industrial machinery, cutting tools, castings, automotive components, electrodes, welding Some of the key players equipment, construction and earthmoving equipment, and helicopter spares. • Bharat Earth Movers Limited (BEML) • Hindustan Machine Tools Limited (HMT) A 300-acre SEZ has been created in Belgaum to develop a • Bharat Heavy Electricals Limited (BHEL) precision engineering and manufacturing supply chain • Saint-Gobain India 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.

Source: Visvesvaraya Trade Promotion Centre, Government of Karnataka, 1upto September 2015 MARCH 2017 For updated information, please visit www.ibef.org 49 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – ENGINEERING … (2/2)

BEML Limited • 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. During the third quarter of 2015-16, the company recorded revenues of US$ 116.64 million. HMT Ltd • 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. • During the third quarter of 2015-16, the company earned revenues of US$ 1.67 million. HMT has a manufacturing plant in Bengaluru. • Bharat Heavy Electricals Ltd (BHEL) is the largest engineering and manufacturing enterprise in BHEL 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 recorded revenues of US$ 813.57 million during the third quarter of 2015-16.

Saint-Gobain India • 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. • In the second quarter of 2015, the company recorded revenues of US$ 6.51 million. The company has a manufacturing plant in Bengaluru.

MARCH 2017 For updated information, please visit www.ibef.org 50 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – TELECOMMUNICATIONS AND ELECTRONICS … (1/2) In 2015, the state government of Karnataka has announced plans Karnataka is a leading state of the country in electronics to set up an Information Technology Investment Region (ITIR) near and telecommunication. the Kempegowda International Airport (KIA) and proposed an investment of US$ 2.35 billion. The construction will be completed The state has high-end research and development in two phases and the Karnataka Industrial Areas Development organisations such as Indian Institute of Science, Cosmic Board (KIADB) is in the process of acquiring 2,072 acres land for Industrial Laboratories Ltd, Indian Space Research the first phase. The ITIR is first of its kind and is projected to be Organisation (ISRO), CSIR Centre for Mathematical developed over next 20 years. The first phase is expected to be Modelling and Computer Simulation (CMMACS), National completed by 2020 while the second phase will be developed in Aerospace Laboratories, Centre for Soft Matter Research following 15 years. and John F. Welch Technology Centre. The start-ups warehouse set up by the state government in Karnataka has excellent telecom infrastructure with 140 of association with Nasscom has attracted 170 start-ups. However, 170 towns connected by Optic Fibre Cables (OFC) network. during 2015-16, the functioning of second start-up warehouse in collaboration with NASSCOM with was initiated in the state. Bengaluru district is the major hub of the electronics and telecommunications industries. The other districts of In order to provide venture capital to semiconductor companies, Hassan, Tumkur, Mysore, Mangalore and Shimoga are the the state government has formed Karnataka Semiconductor new destinations for promotion of electronics and hardware Venture Fund with a total fund size of US$ 15.27 million. industries.

The state houses global giants such as Sanyo, AT&T, Some of the key players Siemens, GE, Motorola, Sony and Alcatel as well as • Bharat Electronics Ltd national heavyweights such as BPL Limited and Indian Telephone Industries Limited. • Nokia • Siemens • Philips Electronics India Ltd

Source: Department of Industries and Commerce MARCH 2017 For updated information, please visit www.ibef.org 51 KARNATAKA THE SILICON VALLEY OF INDIA

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

• Bharat Electronics Limited (BEL) was incorporated in 1954 and is a multi-product, multi-unit, Bharat Electronics Ltd 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 and achieved revenues of US$ 231.78 million during the third quarter ending December 2015.

Nokia • 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 • 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. During the second quarter ending March 2016, the company recorded revenues of US$ 425.25 million Philips Electronics • Philips has been operating in India for more than 75 years. The company is a leader in India Ltd 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.

MARCH 2017 For updated information, please visit www.ibef.org 52 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – AUTOMOTIVE … (1/2)

Karnataka has a vibrant auto industry with investments of In 2015-16 (up to December 2015), total transport and non- around US$ 713 million and annual revenues of US$ 604 transport vehicles recorded in Karnataka were 15.86 million. thousand, out of which, transport vehicles were 1.49 The state is the fourth largest state in India in terms of thousand whereas non-transport vehicles were 14.37 automotive production. The main locations for automobile thousand. industries are Bengaluru, Ramanagara, Kolar, Shimoga, Dharwad & Belgaum. As per the final draft of Karnataka Industrial Policy 2014-19, the state will study the feasibility of setting up major auto General Motors Technical Centre, located in Bengaluru, is parks at Dharwad, Kolar and Bidadi in Ramanagara district; actively involved in research, design, analysis and development and smaller auto parks in Belgaum, Shimoga, Mysore and of vehicles and power trains for foreign destinations as well as Gulbarga. the domestic market. The state has 3 auto clusters, one industrial valve cluster and one auto component cluster. 2 manufacturing hubs are coming up in Narsapur & Vemagal Industrial Areas in Kolar District. Some of the key players The Government is in the process of announcing a Dedicated Automobile Policy. • Toyota Kirloskar Automotive industry of Karnataka grew at a CAGR of 15 per • Volvo India cent during 2009 to 2014. The state is considered to be the 4th • TVS Motor Company largest in manufacturing and developing automobiles in the • Delphi Automotive Systems Pvt Ltd country. On the back of this, the state contributes 8.5% to the overall automobile sector of the country. In February 2017, Taiwan based - JHY Group, opened a factory in Malur taluk, near Bengaluru.

Source: Economic Survey of Karnataka 2015-16

MARCH 2017 For updated information, please visit www.ibef.org 53 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – AUTOMOTIVE … (2/2)

Toyota Kirloskar • 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 & sales activities in Volvo India 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 & bus manufacturing facility in Malur, Kolar.

TVS Motor Company • TVS Motor Company is one of the largest 2-wheeler manufacturers in India. The company is the flagship company of the TVS Group. TVS Motor has 4 manufacturing plants across India including Mysore. • The company achieved a turnover of US$ 1.75 billion during 2015-16.

Delphi Automotive • Delphi India was incorporated in 1995 as a wholly owned subsidiary of Delphi. The company is Systems Pvt Ltd a leading global supplier of electronics & 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.

MARCH 2017 For updated information, please visit www.ibef.org 54 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – TEXTILES AND APPAREL … (1/4)

Karnataka is one of the leading producers of cotton, silk and wool, As of July 2016, the state had one operational SEZ which are the key raw materials required for textile manufacturing (KIADB SEZ Hassan - Textiles) for the textile sector at units. The production of cotton during 2015-16 was recorded to be Hasan, Karnataka. 14.04 lakh bales. The state produces 33.59% of India’s silk. Raw silk and cocoon production in the state was recorded at 7.38 During 2015-16 (up to December 2015), the state thousand MT and 53 thousand MT, respectively during April- produced 38.68 million metres of handloom textiles, as December 2015. compared to 41.29 million metres in 2014-15. Moreover, 78 new industrial units were also registered in the state Karnataka is a major apparel sourcing destination for the global from April to December 2015. market. The state accounts for 20 per cent of the national garment production. During 2015-16, the state contributed around 65%, Karnataka has an apparel park at Dodaballapur near 12% and 6% of silk, wool and cotton production, respectively to the Bengaluru and other mega textile parks in the other parts country. Moreover, the state recorded 144 skill development of the state. centres and 168 private training centres during 2015-16. There are approximately 0.38 million manufacturing units engaged in the textiles and garments sector at the organised and unorganised During 2015-16, the District Sector State Plan Funds of level. Under the New Textile Policy 2013-18, the state government US$ 496.48 thousand were allocated to handlooms & is planning to invest US$ 1,650 million in the textile sector. The textiles sector of the state, as compared to US$ 443.01 Textile Policy offers various incentives for investments in the textile thousand in 2014-15. sector; these include credit-linked capital subsidy, entry tax reimbursement and power subsidy. Some of the key players • Gokaldas Exports Limited The Textile Policy offers various incentives for investments in the • Karnataka Silk Industries Corporation (KSIC) textile sector; these include credit linked capital subsidy, entry tax • Himatsingka Seide reimbursement and power subsidy. • Shahi Exports Private Limited

Source: Karnataka Economic Survey 2015-16, Directorate of Industries and Commerce MARCH 2017 For updated information, please visit www.ibef.org 55 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – TEXTILES AND APPAREL … (2/4)

Financial assistance to handloom weavers (in US$ million)

0.411 0.270 0.254

0.014

2012-13 2013-14 2014-15 2015-16

Source: Economic Survey of Karnataka, 2015-16, Department of Industries, Handloom, Government of Karnataka

MARCH 2017 For updated information, please visit www.ibef.org 56 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – TEXTILES AND APPAREL … (3/4)

Spun yarn production (‘000 kg) Power-loom weavers and looms in Karnataka 2013-14 37,750 No. of weaver No. of weavers No. of looms 2014-15 34,269 households 2015-16 (up to September 2015) 15,580 30,988 127,535 88,566

Production and employment in handloom and power-loom industries in Karnataka 2015-16 (up to December Description Units 2013-14 2012-13 2014-15 2015) Handloom production Million metres 46.09 47.63 43.58 38.68 Handloom employment Lakh 0.82 1.12 0.85 1.06 Power loom production Million metres 328.99 353.59 304.02 290.35 Power loom employment Lakh 2.56 2.60 2.96 4.42

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

Source: Ministry of Textiles MARCH 2017 For updated information, please visit www.ibef.org 57 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – TEXTILES AND APPAREL … (4/4)

• Gokaldas is one of the largest garment exporters in the country. The company commenced Gokaldas Exports Ltd operations in 1979. During the third quarter of 2015-16, the company generated revenues of US$ 37.33 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.

KSIC • 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 • Himatsingka Seide, incorporated in 1985, is a Bengaluru-based company dealing in natural silk fabric. In 2015-16, the company generated revenue of US$ 288.24 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 Pvt Ltd • 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

MARCH 2017 For updated information, please visit www.ibef.org 58 KARNATAKA THE SILICON VALLEY OF INDIA

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 & cocoa in the country.

The state accounts for around 71.3% of the country’s total coffee production. Coffee production of the state increased from 233,230 MT in 2014-15 to 253,340 MT in 2015-16.

During 2015-16, the state government implemented the scheme - “Krishi Bhagya” across 129 talukas of 25 districts. Moreover, under the program of Bhoochethana-2, which is being executed across 66.88 lakh hectares of area, a total of about 11 lakh farmers have been profited.

As per budget 2016-17, the state government decided to provide incentives for endorsement of agro-processing units in the state for which the government will be allocating a total amount of US$ 3.81 million.

Karnataka’s coffee production

Location Elevation Rainfall Main coffee Total area under Average production Main intercrops (m MSL) (mm) types coffee (hectares) (MT) Pepper, cardamom, Bababudangiris 1,000-1,500 1,750-2,200 Arabica 15,000 10,500 arecanut Arabica, Arabica - 37,000 Arabica - 29,000 Pepper, cardamom, Chikmagalur 700-1,200 1,000-4,500 Robusta Robusta - 23,000 Robusta - 30,000 arecanut, orange, vanilla

Arabica, Arabica - 26,000 Arabica - 24,000 Pepper, cardamom, orange, Coorg 750-1,100 1,000-2,500 Robusta Robusta - 56,000 Robusta - 69,000 banana, arecanut

Arabica, Arabica - 31,700 Arabica - 21,000 Pepper, cardamom, orange, Manjarabad 900-1,100 1,000-2,500 Robusta Robusta - 9,400 Robusta - 9,500 arecanut, banana

Source: Coffee Board, Government of India

MARCH 2017 For updated information, please visit www.ibef.org 59 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – AGRO AND FOOD PROCESSING … (2/3)

As per budget 2016-17, the state government has also decided to provide ‘agri start-ups’ with an amount of US$ 1.52 million setting up the new Coffee exports from Karnataka (US$ million) industries by deploying advanced techniques. The state is one of the leading producer of flowers, spices, fruits and CAGR: vegetables. Government of Karnataka had approved the establishment of 14.23 % 825 food parks in 6 districts: Bengaluru rural, Tumkur, Shimoga, Davangere, 659 Bijapur & Belgaum. These parks are in advanced stages of 651 597 implementation. Most of the civil infrastructure work has been completed 479 325 342 in Malur, Hiriyur, Bagalkot & Jewargi food parks, which had been 300 256 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 22.96 per cent between 2010-11 & 2015-16. The export value has ⁾ ¹

increased from US$ 146.9 million in 2010-11 to US$ 412.92 million in ⁽ 16

2015-16. -

2007-08 2011-12 2008-09 2009-10 2010-11 2012-13 2013-14 2014-15 2015

Some of the key players

Final estimate of coffee production (2015-16) • Hindustan Unilever Limited District in MT • Nestle India Arabica Robusta Total • Britannia Industries Limited Chikmagalur 42,425 41,385 83,810 • United Breweries Group Kodagu 21,085 116,620 137,705 Hassan 18,950 12,875 31,825 Source: Economic Survey of Karnataka 2015-16, Coffee Board Sub total 82,460 170,880 253,340 Note: 2015-16(1) : Till September 2015

MARCH 2017 For updated information, please visit www.ibef.org 60 KARNATAKA THE SILICON VALLEY OF INDIA

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

Hindustan Unilever 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$ 4.2 billion during 2015-16. HUL employs more than 16,000 people nationwide. In the second quarter of 2015, the company recorded revenues of US$ 1.3 billion. • 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 Nestle India country, including one at Nanjangud, Karnataka. The company produces chocolates and confectionaries, prepared dishes and cooking aids, beverages and milk products and nutritional supplements. During the first quarter of 2016, ending in March 2016, the company recorded revenues of US$ 351.74 million.

Britannia Industries Ltd • 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 revenues of US$ 1.32 billion in 2015-16.

United Breweries Ltd • 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$ 778.41 million in 2014-15. In the second quarter of 2015, the company recorded revenues of US$ 187.89 million. • The company has around 2,489 employees and manufactures products primarily under the Kingfisher, London Pilsner and UB Premium Ice brands.

MARCH 2017 For updated information, please visit www.ibef.org 61 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – AEROSPACE … (1/2)

Karnataka is known as the pioneer in the Indian aerospace In February 2015, Rolls Royce company sought 12 acres of industry after the establishment of Hindustan Aeronautics Limited land in Devanahalli Aerospace Park to ramp up their (HAL) in Bangalore in 1940. Karnataka produces more than a manufacturing capabilities in the aerospace sector in addition quarter of India’s aircrafts and spacecrafts. to the 6 acres already allotted in partnership with HAL.

Around 984 acres of land is earmarked for an exclusive industrial The state is exporting aerospace products to US, UK, area and sector-specific SEZ for aerospace industries near Germany, Russia Mauritius, Malaysia, Nepal, and Bengaluru International Airport. On February 2015, the Ecuador. In order to boost aerospace industry in the state, the aerospace park started its operations. Government of Karnataka has proposed to reduce the VAT imposed on articles made from nickel, titanium, etc. under the India’s first aerospace SEZ of 300 acres is operational at heading of HSN 7505, 7506 and 8108, from 14.5% to 5.5% Belgaum. during 2016-17.

Karnataka is the first state which announced the aerospace Aerospace Technology Centre (ATC) in Bengaluru would be policy in the country. Karnataka Aerospace Policy has identified established under the PPP model. 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. Some of the key players Companies such as Air India, Boeing and Jupiter Aerospace have selected Karnataka for the development of MRO facilities. • Boeing • Hindustan Aeronautics Limited The state government plans to develop an aerospace park • Airbus Engineering Centre spread over 1,000 acres near the Bengaluru International Airport • BEML Ltd (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. Source: Global Investors Meet 2012, MRO India, NRI Forum Karnataka, Karnataka Aerospace Policy 2012 MARCH 2017 For updated information, please visit www.ibef.org 62 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – AEROSPACE … (2/2)

Boeing • 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.

HAL • 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 • 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.

BEML Ltd • 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

MARCH 2017 For updated information, please visit www.ibef.org 63 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – ANIMATION … (1/2)

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

There has been a considerable increase in AVGC business • Technicolor outsourcing to Bengaluru. • TATA Elxsi • Zynga A great deal of content for global blockbuster animation • DreamWorks movies such as Life of Pi, Harry Potter, Kung Fu Panda, Prometheus and Pirates of the Caribbean was developed in Karnataka. Source: PwC Report estimates, Karnataka AVGC Policy The state government is in process of establishing digital art training centres across willing colleges, in collaboration with As per Economic Survey 2015-16, AVGC finishing Association of Bangalore Animation Industries (ABAI) for schools would be developed in the state for improving imparting new skills to people under the program designed the skill quotient of the students and enabling them to by the experts of ABAI. get industry-ready.

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.

MARCH 2017 For updated information, please visit www.ibef.org 64 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – ANIMATION … (2/2)

Technicolor • 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 • 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$ 164.25 million in 2015-16.

Zynga Inc • 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 DreamWorks 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

MARCH 2017 For updated information, please visit www.ibef.org 65 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – ELECTRONIC HARDWARE … (1/2)

Karnataka is among the top chip designing hubs in the As per budget 2016-17, the state government has proposed country. Around 70 per cent of chip designers in India are to establish four incubators based on technology, in phases, found in Bengaluru city. across the areas of electronics systems designing & manufacturing, IoT, Robotics, 3D printing, etc. The state has the advantage of having low-cost skilled/technical manpower compared with other states. During 2016-17, the state government has also planned to work in partnership with the industry as well as academic Bengaluru is a global hub for R&D activity in the software institutions in order to establish excellence centres and industry, which will greatly aid the electronic hardware finishing schools across the sectors of electronics, IT, etc. in industry. Karnataka.

The ESDM (Electronic System Design & Manufacturing) Policy is expected to provide for development of three ESDM innovation centres that will provide complete Some of the key players infrastructure with the requisite design tools. • Intel ESDM Policy also plans to set up seven high-class ESDM • AMD Manufacturing Clusters (EMCs) to provide infrastructure • Qualcomm Inc support including electronic manufacturing services and • Nvidia component manufacturing by 2020.

As per the policy, by 2020, ESDM sector is expected to Source: Department of Electronics and Information Technology, GoI, generate turnover of US$ 400 billion, including exports to Department of IT, BT and S&T, Karnataka, the tune of US$ 80 billion, with an investment of US$ 100 ESDM Policy 2013, Karnataka billion.

MARCH 2017 For updated information, please visit www.ibef.org 66 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – ELECTRONIC HARDWARE … (2/2)

Intel • 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 • 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 and Bengaluru.

Qualcomm Inc • 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 • 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

MARCH 2017 For updated information, please visit www.ibef.org 67 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – TOURISM ... (1/2)

Karnataka boasts of a diverse flora and fauna and a 320- Number of tourist arrivals in Karnataka (million) km natural coast line, which makes it a nature tourist's paradise. The state is ranked fourth in terms of the number 118.8 120.5 of tourist arrivals in India. CAGR: 98.6 16.9 % 94.7 The Palace on Wheels of South India – the Golden Chariot 84.1 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 38.4 38.5 infrastructure in the form of better road and rail connectivity 36.7 37.5 33.0 as well as improving hospitality is also aiding tourism. 25.2

The state attracted 119.86 million domestic tourists and 0.63 million international tourists in 2015. During 2005– 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015, tourist arrivals in the state increased at a CAGR of 16.9 per cent. During 2016-17, the state government has decided to launch new “Kuteera” scheme for providing the tourists with basic The sector contributes 14.8 per cent to the GSDP of amenities on the national highways. The state government has Karnataka; plans are afoot to expand to 26 per cent by also decided to endorse the Heli and Air taxi services across 2020. the vital tourist destinations of the state.

In budget 2016-17, the state government announced the Further, tourist places, pertaining to Jains and Buddhists, are launch of new policy on tourism for the period 2015-2020 also proposed to be developed by the state government during for strengthening and boosting private investments across 2016-17. As per the budget 2016-17, an amount of US$ 77.45 the tourism sector. million has been allocated to the tourism department.

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

MARCH 2017 For updated information, please visit www.ibef.org 68 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – TOURISM ... (2/2)

Major attractions

• Karnataka is India’s most preferred destination for advanced medical care, and is referred to as the medical tourism hub of India. Medical tourism • The state has the highest number of approved health systems, multi-specialty health centres and alternative health therapies in India.

• Karnataka represents wide variations in topography – high mountains, hills and long Eco tourism coastal stretches. • The state has five national parks, 26 wild life sanctuaries, pelicanries, heronries and elephant camps.

• Karnataka’s geography provide a vast spectrum of diverse attractions, making it a heaven for adventure sports and outdoor activities. Adventure tourism • Major attractions include white water rafting on the and aero sports at the Nandi hills.

Source: Visvesvarya Industrial Trade Centre, Global Investors Meet 2012

MARCH 2017 For updated information, please visit www.ibef.org 69 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – RENEWABLE ENERGY … (1/4)

During 2015-16, renewable energy was recorded at 5,105.52 MW out of the total installed capacity of 17,324.06 MW. Therefore, it contributed a total of 29.47% into the state’s total installed power capacity. Karnataka is endowed with high renewable energy potential such as wind, hydro, solar, tidal & 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 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 January 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. However, the company’s bankruptcy filing in the US in April 2016 is expected to impact the implementation of this project in the state. Moreover, due to this bankruptcy filing, Karnataka Renewable Energy Development Ltd. has encashed the bank guarantee for the small 20 MW project which was undertaken by SunEdison, in July 2016. During 2015-16, 20 wind power projects were allotted to the state of Karnataka which include Solar Fields Energy Photo Voltaic India Private Limited in Gulburga, Mituna Constructions Private Limited in Belgaum, SPI Green Energy (Amrutha Power 15 MW) in Chikkamagalur, etc. In March 2017, ABB India modernised & restored the 1,035 MW Sharavathi seamless integration hydropower plant in the state, which generates 25% of Karnataka Power Corporation’s output. The project is a perfect example for future ready renewable technology which enables the Industrial Internet of Things (IIOT) & synchronises with the government’s strategy for round the clock reliable power.

MARCH 2017 For updated information, please visit www.ibef.org 70 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – RENEWABLE ENERGY … (2/4)

Progress in renewable energy (MW) (2015-16)1

Renewable energy Capacity allotted Installed capacity No Available potential (MW) source (MW) (MW)

1 Wind 55,857 13,416.32 2,871.54

2 Small hydro 3,000 3006.36 835.46

3 Biomass 1,000 369.98 113.03

4 Co-generation 2,000 1,832.85 1,252.05

5 Solar 24,700 1,124.00 124

Grand total 86,557 19,749.51 5,196.1

Source: KREDL, Central Electricity Authority, Karnataka Renewable Energy Policy 1As of December 2015

MARCH 2017 For updated information, please visit www.ibef.org 71 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – RENEWABLE ENERGY … (3/4)

Wind energy Karnataka wind energy density map

During 2015-16, Karnataka had a total wind energy potential of approximately 14 GW.

By the end of December 2015, the installed capacity for wind energy in public and private sector, both, was recorded to be 2,876.54 MW. Wind energy accounted for 28.64%of the total installed capacity recorded by the end of December 2015.

During 2015-16 (up to December 2015), a capacity Wind power addition of 186.10 MW was done for wind power under density W/Sq m Renewable Energy, which was recorded to be 311.60 MW in 2014-15. 0 – 100 100 – 200 Wind velocity in the state ranges from 0.85 m/s to 8.27 200 – 250 m/s. 250 – 300 300 – 400 Potential areas for wind power plants in the state include Chitradurga, Gadag, Chikmaglur, Bellary, Davangere, 400 – 500 , Bijapur, Bagalkot and Belgaum.

Source: Centre for Wind Energy, Chennai Karnataka is counted among the top five destinations for wind energy in India.

MARCH 2017 For updated information, please visit www.ibef.org 72 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INDUSTRIES – RENEWABLE ENERGY … (4/4)

Solar energy Karnataka solar resource map

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. The total capacity installed for solar energy during 2015-16 (up to December 2015) was recorded to be 124 MW.

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.

During 2015-16, 20 wind power projects were allotted to the state of Karnataka, including Solar Fields Energy Photo Voltaic India Private Limited in Gulburga, Mituna Constructions Private Limited in Belgaum, SPI Green Energy (Amrutha Power 15 MW) in Chikamagalur, etc. Source: Karnataka Solar Policy 2014-21, News articles

MARCH 2017 For updated information, please visit www.ibef.org 73 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INVESTMENT PROMOTION OFFICES … (1/2)

Agency Description Contact information

No 49, South Block, Khanija Bhavan Race Course Road • Anchor department for development/establishment of Department of Bengaluru - 560 001 industries in Karnataka. Industries and Phone: 91-80 2238 9901-08 Commerce Fax: 91-80-2238 9909 • Responsible for formulating and implementing E-mail: (DIC) industrial policies in the state. [email protected] Website: www.karnatakaindustry.gov.in

• Single contact point for investors in the state No 49, South Block, Khanija Bhavan • Considers/forwards proposals to concerned agencies East Entrance, Race Course Road and communicates status to investors. Karnataka Udyog Bengaluru - 560 001 Mitra Phone: 91-80-2228 2392/5659, • Monitors implementation of approved projects. (KUM) Fax: 91-80-2226 6063 E-mail: [email protected] • Single point of contact for information on various Website: kum.karnatak.gov.in aspects including land availability, statutory approvals and coordination.

MARCH 2017 For updated information, please visit www.ibef.org 74 KARNATAKA THE SILICON VALLEY OF INDIA

KEY INVESTMENT PROMOTION OFFICES … (2/2)

Agency Description

District Level Single Window • Functions under the chairmanship of respective Deputy Commissioners for Clearance Committee (DLSWCC) industrial projects for investments less than US$ 0.65 million.

State Level Single Window • Functions under the chairmanship of Minister for Large and Medium Industries Clearance Committee (SLSWCC) for investments that range between US$ 0.65–10.9 million.

State High Level Clearance • Functions under the chairmanship of the Chief Minister for projects involving Committee (SHLCC) investment of more than US$ 10.9 million.

• Nodal agencies for approval of projects at the district level. District Industries Centres • Primary focus is to promote small scale, village and cottage industries.

• Various sector specific departments such as Department of Tourism, Department Other departments of Information Technology and Biotechnology, Department of Food Processing, Department of Textiles and Department of Mines and Geology.

MARCH 2017 For updated information, please visit www.ibef.org 75 KARNATAKA THE SILICON VALLEY OF INDIA

KEY APPROVALS REQUIRED … (1/2)

List of approvals and clearances required Departments to be consulted

Prior to setting up the unit

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

Allotment of land/shed Karnataka Industrial Areas Development Board

State Department of Industries, Department of Town and Country Permission for land use Planning State Pollution Control Board and Ministry of Environment and Site environmental approval 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

MARCH 2017 For updated information, please visit www.ibef.org 76 KARNATAKA THE SILICON VALLEY OF INDIA

KEY APPROVALS REQUIRED … (2/2)

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

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

MARCH 2017 For updated information, please visit www.ibef.org 77 KARNATAKA THE SILICON VALLEY OF INDIA

APPROVAL PROCESS

Stage 1 Clearance of the project/industry Stage 2 Clearance

State Level Single Window Agency High Level Clearance Committee (Large/mid-size industries US$ 0.65 – (Mega industries > US$ 10.9 million 10.9 million)

KIADB (Land acquisition)

KSPCB Karnataka Udyog Mitra (Pollution Board) (Department of Industries and Commerce) KPTCL (Electricity) Inspectorate of Other sector-specific Factories and departments Boilers

Commercial tax District Industries Centre Land conversion (Tiny industries < US$ Investor 0.65 million) BWSSB/KUWSDB (Water supply)

Source: Karnataka Udyog Mitra, Karnataka Industrial Areas Development Board and Department of Industries & Commerce MARCH 2017 For updated information, please visit www.ibef.org 78 KARNATAKA THE SILICON VALLEY OF INDIA

COST OF DOING BUSINESS IN KARNATAKA

Cost parameter Cost estimate

Industrial land (US$ per hectare) 129,191.51 Metropolitan area: 12.13 Power cost (US cents per kWh) Non metro area: 8.7 Labour (US$/man year) 1,522

Occupation costs (US$/sq ft/year) 16.44

Employee cost (US$/ man year)

Software developers 6,383

Team leads 14,893

Architects 21,276.5

Project managers 31,915

Source: Industry sources, Ministry of Labour and Employment, Government of India, Bengaluru Water Supply and Sewerage Board, Karnataka Electricity Regulatory Commission pppindia 1Land cost has been estimated by computing the average cost of land at various Industrial Parks in Karnataka

MARCH 2017 For updated information, please visit www.ibef.org 79 KARNATAKA THE SILICON VALLEY OF INDIA

STATE ACTS & POLICIES … (1/6)

Karnataka Start-up Policy 2015-20

Objective • To encourage the growth of 20,000 technology based start-ups in the state by 2020. • To enable the establishment of around 25 innovative technology solutions in the state. • To create around 0.6 million direct as well as 1.2 million indirect employment opportunities in technology sector. Read more

Karnataka Tourism Policy 2015-20

Objective • To boost private investments across the tourism sector. • 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. Read more

Solar Policy 2014-21

Objectives • 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

For updated information, please visit www.ibef.org MARCH 2017 80 KARNATAKA THE SILICON VALLEY OF INDIA

STATE ACTS & POLICIES … (2/6)

Karnataka Industrial Policy 2014-19

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

Read more

ESDM Policy 2013

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

Aerospace Policy 2012

Objectives • 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

MARCH 2017 For updated information, please visit www.ibef.org 81 KARNATAKA THE SILICON VALLEY OF INDIA

STATE ACTS & POLICIES … (3/6)

AVGC Policy 2012

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

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 Objectives services, products and R&D. • To enable Karnataka to be the most preferred destination for MSMEs (micro, small and medium enterprises). Read more

Integrated Agribusiness Development Policy 2011

Objective • 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. Read more

MARCH 2017 For updated information, please visit www.ibef.org 82 KARNATAKA THE SILICON VALLEY OF INDIA

STATE ACTS & POLICIES … (4/6)

Karnataka Renewable Energy Policy 2009-14

Objectives • Development, propagation and promotion of renewable energy resources and technologies. • Creation of a suitable environment for private sector participation in renewable energy power generation. Read more

State Policy for Special Economic Zones 2009

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

Millennium Biotech Policy II 2009

Objective • 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. Read more

MARCH 2017 For updated information, please visit www.ibef.org 83 KARNATAKA THE SILICON VALLEY OF INDIA

STATE ACTS & POLICIES … (5/6)

Karnataka Mineral Policy 2008

• To optimise the state’s geological potential by scientific and detailed prospecting. State-of-the-art Objectives 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 Upcoming Policy industries for value addition within the vicinity of the mineral bearing areas will be given priority. Read more

Infrastructure Policy 2007

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

NRI Policy 2017

Objective • The policy was introduced in January 2017, to attract investments from non-resident Kannadigas. The policy aims at helping improve the privileges and speedy services to NRKs, through a card. Read more

MARCH 2017 For updated information, please visit www.ibef.org 84 KARNATAKA THE SILICON VALLEY OF INDIA

STATE ACTS & POLICIES … (6/6)

Policy Department

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

I4 (IT, ITeS, Innovation, Incentives) Department of Information Technology, Biotechnology and Science & policy Technology, Government of Karnataka

Health and Family Welfare Karnataka Pharmaceutical policy Department, Government of 2012 Karnataka

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

MARCH 2017 For updated information, please visit www.ibef.org 85 KARNATAKA THE SILICON VALLEY OF INDIA

CONFERENCES/SUMMITS FOR 2016-17

Venue of Summit / Summit / Conference Date Conference

International Summit on Engineering and Technology(ISET- Bengaluru 27th August, 2016 16)

International Conference on Engineering and Technology Mysore 4th September, 2016 (ICET-16)

International Conference on Computer Science , Electronics Mangalore 18th September, 2016 and Communication Engineering (ICCSECE-16)

Technoarete-International Summit on Engineering and Bengaluru 22nd October, 2016 Technology(ISET-16)

Source: Conference Alerts

MARCH 2017 For updated information, please visit www.ibef.org 86 KARNATAKA THE SILICON VALLEY OF INDIA

ANNEXURE

Average exchange rates

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 65.46

2016-17 67.23 Source: Reserve Bank of India

MARCH 2017 For updated information, please visit www.ibef.org 87 KARNATAKA THE SILICON VALLEY OF INDIA

DISCLAIMER

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.

MARCH 2017 For updated information, please visit www.ibef.org 88