K'taka GCC Policy Eyes 500 New Centres, $50 Bn In Output And 3.5 Lakh Jobs

Karnataka launched a new Global Capability Centres (GCC) policy on Tuesday with the goal of generating USD 50 billion in economic output by 2029. 

The state is looking to create 3.5 lakh new jobs and establish 500 new GCCs as part of this initiative, which will help the state reach its target of 1,000 GCCs by the end of the decade. 

Currently, Karnataka hosts 875 GCCs, contributing USD 22.2 billion to the state’s economy and employing approximately six lakh people. The policy was launched at the Bengaluru Tech Summit 2024 (BTS).

Focus On Areas Beyond Bangalore 

While Bengaluru remains the dominant city for GCCs, the newly launched policy places focus on expanding these centres into cities beyond Bengaluru. Mangaluru, Mysuru, Hubballi-Dharwad-Belagavi, Kalaburagi, Tumakuru, and Shivamogga have been identified as key areas where the government will incentivise GCCs to set up operations. 

To support this expansion, the state government plans to offer customised packages for GCCs establishing dedicated campuses in these cities, with special incentives provided on a case-by-case basis. Additionally, Cluster Anchor Groups will be formed to provide local connections and facilitate partnerships between GCCs and academic or industrial players in these regions.

Global Innovation Districts Being Setup

As part of the policy’s broader strategy, Karnataka’s Chief Minister Siddaramaiah announced plans for the development of three new technology parks—Global Innovation Districts. One of these parks will be located in Bengaluru, while the remaining two will be situated in the Beyond Bengaluru clusters. 

These districts will be equipped with state-of-the-art infrastructure, including high-speed internet and reliable power supply, designed to meet global sustainability standards. Each district will also feature a coordination office to assist GCCs and other companies with government-related issues.

In addition to the physical infrastructure, Karnataka is also introducing an Innovation Fund, with an allocation of Rs 100 crore. This fund will support joint research between GCCs and academic institutions and promote innovation challenges aimed at solving industry-specific problems. 

The state is also encouraging the establishment of smaller-scale GCCs, referred to as Nano GCCs, particularly in the Beyond Bengaluru clusters. These Nano GCCs, which can employ between 5 and 50 people, will benefit from various incentives without being bound by the typical employment or investment thresholds, offering a more flexible approach to setting up and scaling operations.

Incentives Under GCC Policy

The policy includes several incentives aimed at reducing operational costs for GCCs. These include a 50 per cent  reimbursement of internship stipends, up to Rs 5,000 per month for a maximum of 20,000 interns per year. 

The Karnataka government will also reimburse up to 20 per cent of skilling expenses for graduates and diploma holders, with a cap of Rs 36,000 per graduate and Rs 18,000 per diploma holder. 

Other incentives include funding for innovation labs and technology centers, with up to 75 per cent of capital expenditure covered for projects in Beyond Bengaluru areas and 40 per cent funding for similar projects within Bengaluru. 

GCCs will also be eligible for funding to address public service challenges through innovative solutions, with a cap of Rs 1.5 crore for the deployment of such solutions.

The policy further includes provisions to encourage intellectual property development by offering a 50 per cent reimbursement for domestic patent filing fees, capped at Rs 2 lakh. Quality certification fees will also be reimbursed, up to Rs 6 lakh. 

Additionally, the government will prioritise applications for permission to lay cables and erect towers, promising approval within 30 working days. To assist GCCs in navigating these various processes, a dedicated platform—called the GCC Incentive Clinic—will be established, providing a helpdesk where companies can share their needs and concerns.