BT Exclusive: Karnataka’s start-up, manufacturing sectors set for global growth; Rs 1.15 lakh cr secured, says MB Patil

Karnataka, often referred to as ‘the land of sandalwood’ for its rich reserves of high-quality sandalwood and home to India’s only active gold mines, has long been an economic powerhouse. At its heart lies Bengaluru, the state’s crown jewel and the country’s ‘Silicon Valley,’ renowned for its thriving startup ecosystem.

The state hosts over 15,000 start-ups and hundreds venture capital and corporate fund firms, with Bengaluru accounting for the majority. Beyond its dominance in the startup space, Karnataka is also making strides in semiconductor manufacturing, positioning itself as a key player in India’s tech-driven growth.

As the state gears up for the Global Investors Meet (GIM 2025) from February 12 to 14, which will see participation from 18 countries, MB Patil, Minister for Large and Medium Industries and Infrastructure Development, Government of Karnataka, speaks to Business Today about Karnataka’s startup ecosystem, its investment landscape, and global investor sentiment. Edited excerpts:

Q: Karnataka has been a magnet for investment in recent years. Could you elaborate on some of the major investments the state has secured recently and the sectors that have attracted the most attention? How are these investments shaping Karnataka’s economic landscape?

MB Patil (MBP): Karnataka has secured significant investments across multiple high-growth sectors, reinforcing its position as one of India’s leading industrial and innovation hubs. The state has attracted over Rs 1.15 lakh crore in investments since April 2023 (single window approved investments), covering industries like electronics manufacturing, renewable energy, electric vehicles, aerospace, and infrastructure development.

Foxconn: Rs 22,000 crore for establishing an iPhone assembly unit on a 300-acre site.
JSW Energy: Rs 4,960 crore for a 600 MW captive wind power generation plant.
Toyota Kirloskar: Rs 3,700 crore for the expansion of manufacturing facilities and related operations.
Exide: Rs. 4,000 crore for setting up Gigafactory
Hero Future Energies: 11,000 crore across projects in renewable energy, green hydrogen and its derivatives
Air India: Rs 1,750 crore for setting up a state-of-the-art MRO (Maintenance, Repair, and Overhaul) facility.
Sansera: Rs. 2,150 Cr. for auto components manufacturing

In addition, Karnataka shall be announcing few key confirmed investments during GIM.

Karnataka also has a robust pipeline of investment leads exceeding ₹1 lakh crore, spanning various high-growth sectors, further strengthening the state’s industrial ecosystem.

PA: The startup ecosystem in Karnataka, particularly in Bengaluru, is often referred to as the Silicon Valley of India. How integral is this ecosystem to the state’s broader economic strategy? Are there any projections for the number of new start-ups  expected to emerge in Karnataka over the next five years?

MBP: Karnataka stands as one of the strongest startup ecosystems in India, leading the country in innovation, technological advancements, and entrepreneurial activities. With over 15,000 active start-ups  and home to over 40% of India’s unicorns, the state has become a global hub for innovation.
This thriving ecosystem is supported by a robust network of over 1500 venture capital and corporate venture funds, along with over 15000 angel investors, fostering growth across key sectors such as IT, biotechnology, and fintech.

Government initiatives like the Karnataka Startup Policy and flagship programs such as the Elevate program and VentuRISE Global Startup Challenge have been instrumental in promoting entrepreneurship. These programs provide financial aid, mentorship, and infrastructure support, helping start-ups thrive.
VentuRISE, in its 2nd edition as part of the Global Investors Meet, focuses on empowering growth-stage start-ups in sectors like Electronic System Design and Manufacturing (ESDM), Clean Mobility, and Aerospace & Defence.

This year, VentuRISE received over 900 applications from start-ups addressing industry challenges, with 45 shortlisted start-ups set to pitch their innovative solutions to a panel of experts at the event.

With venture capital investments exceeding $4 billion in 2023 alone, Karnataka’s robust IT infrastructure, skilled workforce, and favourable regulatory environment continue to attract global investors. The state’s efforts not only position Karnataka as a leader in technological and entrepreneurial excellence but also solidify its role as a key driver of economic growth in India and beyond.

PA: As Karnataka positions itself as a global investment hub, how is the international investor and venture capital community viewing the state’s potential? What are the factors that make Karnataka an attractive destination for global investors in comparison to other Indian states?

MBP: Karnataka is widely regarded as a premier destination for global investors due to its innovation-driven economy, skilled talent pool, and world-class infrastructure. The state’s efforts to align with global trends have resulted in a robust industrial ecosystem supported by:
Global Partnerships: Successful roadshows in Japan, South Korea, and the USA secured $3 billion in investments, reflecting investor confidence in Karnataka’s infrastructure and talent pool.
Strategic collaborations with global leaders like Intel, Toyota Kirloskar, and Foxconn in sectors such as semiconductors, green energy, and manufacturing.
Policy Frameworks: The Clean Mobility Policy and Industrial Policy 2024-2029 shall provide targeted incentives, including production-linked benefits and subsidies, to attract investments in high-tech sectors.
Technological Edge: Karnataka houses 42% of India’s unicorns and more than 500 GCCs, highlighting its leadership in R&D and technology.
Ease of Doing Business: An AI-driven Single Window Clearance System integrates real-time support, predictive analytics, and GIS mapping for land allocation, significantly streamlining the investment process.

PA: The Global Investors Meet 2025 has been positioned as a platform to drive inclusive growth. Could you outline the specific initiatives or policies being introduced at GIM 2025 to ensure equitable opportunities across sectors and regions in Karnataka?

MBP: The Global Investors Meet (GIM) 2025, themed “Reimagining Growth,” aims to position Karnataka as a global industrial and infrastructure hub by fostering inclusive, sustainable development. The event will focus on empowering MSMEs, driving innovation in start-ups, advancing regional development, and showcasing key sectoral advancements to attract domestic and international investments.
Karnataka is focusing on high-value sectors such as aerospace & defence, electronics, core manufacturing, and logistics to accelerate GDP growth and strengthen supply chain integration.

Simultaneously, the state is promoting labour-intensive industries like textiles, electronics manufacturing, Global Capability Centres (GCCs), R&D, and manufacturing support services to generate large-scale employment opportunities. Additionally, Karnataka is positioning itself as an R&D hub by actively fostering sunrise sectors such as future mobility, green hydrogen, drones, space technology, medical technology, and semiconductors.

To attract investments, the upcoming Global Investors Meet (GIM) will feature over 100 speakers, B2G meetings, and networking sessions to showcase Karnataka’s investor-friendly policies. The state is also forming sector-specific vision groups, led by private-sector leaders, to streamline investment efforts and ensure efficient execution. Strengthening global collaborations remains a key focus, with strategic partnerships with Japan, South Korea, the USA, the Netherlands, and Germany aimed at driving innovation and foreign investments.

With a long-term vision for inclusive and sustainable growth, GIM 2025 aims to build a robust investment ecosystem that not only attracts capital but also delivers tangible benefits to local communities. By prioritising key sectors and fostering global partnerships, Karnataka continues to solidify its position as a leader in innovation, industry, and entrepreneurship.

PA: MSMEs and the manufacturing sector are crucial pillars of Karnataka’s economy. What steps is the government taking to support these sectors, especially in terms of infrastructure, funding, and policy incentives? Are there any flagship initiatives in place to make Karnataka a manufacturing powerhouse?

MBP: Karnataka’s MSMEs and manufacturing sectors are pivotal to its economic strategy. The government has rolled out comprehensive initiatives to bolster these sectors:
Infrastructure Development: Revamping over 200 industrial estates and establishing sector-specific industrial parks like EV clusters in Dharwad and aerospace clusters in Devanahalli.
Financial Support: Subsidies and incentives under the Industrial Policy 2024-2029, including 20%-25% capital subsidies for manufacturing projects outside Bengaluru.
Capacity Building: Partnerships with NASSCOM to deliver Industry 4.0 training, equipping MSMEs with advanced digital tools and manufacturing technologies.
SME Connect: A platform enabling SMEs to access funding, engage with global buyers, and participate in matchmaking events.
 
These initiatives position Karnataka as a manufacturing powerhouse while ensuring the integration of MSMEs into global supply chains.
 
PA: Karnataka has consistently been among a leading economic performer among Indian states. Could you provide an overview of its recent economic performance? Which sectors are currently emerging as growth drivers, and what underlying factors are fuelling their rise?

MBP: Under the leadership of Hon. Minister M.B. Patil, Karnataka has continued to excel as a top-performing state in India, driving economic growth through a combination of innovative policies, infrastructure development, and strategic investments. The state has solidified its position as a global hub for technology, manufacturing, and sustainability, supported by key initiatives that have shaped its economic trajectory in recent years.

Investment Magnet: Karnataka has successfully attracted significant global investments, including commitments worth $3 billion through roadshows in Japan, South Korea, and the USA.
Strategic partnerships with companies like Foxconn, Chevron Corporation, and Toyota Kirloskar have further strengthened the state’s industrial base across sectors such as aerospace, semiconductors, and green energy.

Leadership in Technology and Innovation: Karnataka accounts over 40% of India’s unicorns, showcasing its dominance in the startup ecosystem.

The state has invested heavily in building a robust R&D ecosystem, supported by 400+ Global Capability Centres (GCCs) and partnerships with institutions like IISc and IIT​.

Industrial Growth and Inclusivity: The Industrial Policy 2024-2029 focuses on sustainable and inclusive growth, offering zone-based incentives to encourage investments in Tier 2 and Tier 3 cities. This approach has accelerated regional development and distributed economic opportunities beyond Bengaluru.
Dedicated industrial clusters, such as the aerospace cluster in Devanahalli and the EV manufacturing cluster in Dharwad, have been established to boost sector-specific growth.
 

SME Connect: Through the SME Connect initiative, the government has empowered over 2,000 MSMEs with training and resources, enhancing their global competitiveness.

Future-Ready Infrastructure: Karnataka’s commitment to infrastructure upgrades, such as the Bangalore-Chennai Industrial Corridor and Knowledge, Well-being, and Innovation City (KWIN City), ensures sustained economic competitiveness.