Kris Gopalakrishnan's Vision: Karnataka And India's Shared $30 Trillion Destiny

In an exclusive conversation with BW Businessworld’s Rohit Chintapali on the sidelines of CII Innoverge 2023 event, Kris Gopalakrishnan, Infosys co-founder and Chairman at Axilor Ventures, unveiled an ambitious vision for Karnataka and India's economic future, projecting a shared destiny of a USD 30 trillion economy. Drawing on historical parallels and contemporary trends, Gopalakrishnan outlined a roadmap for Karnataka's pivotal role in propelling India's growth to unprecedented heights. Excerpts:

You speak of India becoming a USD 30-40 trillion economy in the coming years? What’s your rationale behind this projection?

India was a USD 800 billion economy in 1993 and today it is at USD 3.6 trillion. We grew at about fivefold in this duration. Bigger the economy, faster you can grow. The other way also can happen – bigger you are, slower you grow. But with a population of 1.4 billion people (a young population), we can grow faster. 

The US was 1.9 per cent of the world economy at the beginning of 20th century. By the end of the 20th century, it became the largest economy, which is 19 per cent of the global GDP. If US can do this in one century, I hope India will do it in one century as well. That is why I am pushing for India to set a target of USD 30 trillion for 2047.

Where does Karnataka fit into this picture?

Karnataka is fantastic at attracting investments and it must take an advantage of this. The state also has an upper hand in terms of talent, IT, startups, and biotechnology. And of course, IT is integral to every industry including automotive, healthcare, manufacturing and more. About 40 per cent of India’s IT services share is from Karnataka. Massive amount of R&D happens here and the world looks at the state for R&D. Hence, the state must set similar targets for other industries as well. We need to take advantage of the pluses to create large industries in Karnataka. There is an opportunity to establish industrial clusters. For the state to continue to be the #1 or #2 investment destination in India as it grows to USD 30 trillion, there needs to be a plan. 

What is your vision for Karnataka’s contribution towards a USD 30 trillion Indian economy?

Karnataka must go for at least 10 per cent – about USD 3 trillion.

What kind of policies would help the state to be on this path?

We must foster a positive virtuous cycle. Presently, investments flow in due to the talent and conducive ecosystem, initiating this positive cycle. As talent and companies thrive here, they will draw more investment and talent, perpetuating this virtuous loop. Similar dynamics should unfold across sectors. For instance, in automotive, if an OEM establishes here, then Tier-1, 2, and 3 suppliers will follow suit, forming clusters that minimise logistics costs and enhance collaboration. This pattern needs to emerge across space, medical devices, and semiconductors. By replicating successful models, as seen with anchor companies like Infosys, Wipro, Intel, TI, and Cisco in Bangalore, we can amplify other industries around entities such as Toyota and Volvo.

India and Karnataka have greatly benefited from Foreign Direct Investment (FDI). Is FDI versus Domestic Capital a conversation to be had?

India, including Karnataka, benefited from Foreign Direct Investment (FDI). However, framing FDI as a rival to domestic investment is an incomplete perspective; the two complement each other symbiotically. Our developmental journey necessitates foreign investment, making it imperative to cultivate an environment conducive to attracting global capital. Nevertheless, for strategic autonomy, nurturing domestic ownership is essential. This underscores the significance of domestic capital infusion, with the ideal scenario being a predominant reliance on local funding. Currently, such capital inflow remains underutilised, especially within the startup and entrepreneurial landscape. Encouraging a more robust domestic investment in these domains is the key to realising holistic economic growth.

Traditional thought process would dictate that ‘services’ is how nations attain the ‘developed’ status. Why is manufacturing important for India? Is it just because of the populace?

Firstly, it addresses the imperative of job creation, particularly for those transitioning from agriculture to alternative sectors. Presently, many are migrating towards construction, a service-oriented sector. By fostering robust manufacturing, we can furnish higher-quality, stable and enduring employment opportunities, facilitating this critical socioeconomic transition.

The second rationale centres on strategic foresight. The COVID-19 pandemic unveiled vulnerabilities stemming from disrupted supply chains and intentional restrictions on essential goods. To fortify our resilience, a robust domestic manufacturing foundation becomes essential, ensuring self-sufficiency and shielding us from external pressures. This pursuit holds paramount importance in sectors such as defence, where dependence on foreign technology poses grave security concerns. By cultivating indigenous manufacturing capabilities, we safeguard our national interests, with the pinnacle being our vital national security.