India’s First: Karnataka GCC Policy 2024-2029 Launched; Aims to Transform State into Global Innovation Hub

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The Karnataka Government on Friday unveiled its draft Global Capability Centres (GCC) Policy with ambitious goals to establish 500 new GCCs by 2029. The policy also aims to create 3.5 lakh jobs and generate $50 billion in economic output during the 2024-2029 period. The draft policy is now open for public feedback, allowing stakeholders to contribute to refining the framework. Karnataka is the first Indian state to introduce a dedicated GCC policy, designed to attract increased investment in this growing sector. A GCC typically serves as an offshore unit established by companies to manage IT and business operations.

The Draft Karnataka GCC Policy 2024-2029 is a comprehensive initiative aimed at positioning Karnataka as a premier hub for Global Capability Centres (GCCs). It builds upon Karnataka’s existing strengths in innovation, talent, and infrastructure, particularly Bengaluru, which already hosts 30% of India’s GCCs. The policy lays out ambitious goals, including attracting 500 new GCCs, generating 3.5 lakh jobs, and creating $50 billion in economic output by 2029. The policy framework is structured around several key pillars, each addressing critical areas essential for sustaining and expanding the state’s GCC ecosystem.

Karnataka’s Vision 2030 for GCC Ecosystem

The policy envisions Karnataka as a global leader in inclusivity, sustainability, and innovation by 2030. It focuses on creating a future-ready workforce, promoting sustainable business practices, and fostering flexible work models like hybrid and remote work arrangements. Karnataka aims to be an ideal destination for GCCs by combining economic growth with social responsibility, aligning with global trends.

Key Targets:

• 500 new GCCs by 2029, with a goal to have 1,000 GCCs in total across the state.
• Creation of 3.5 lakh new jobs by the same year.
• Economic contribution of $50 billion from GCC operations.
• These targets reflect Karnataka’s ambition to remain competitive globally and contribute significantly to India’s $1 trillion digital economy vision.

Also Read | Driving Innovation: Karnataka’s Upcoming Skill Policy to Boost GCC Sector

Marquee Announcements:

Global Innovation Districts
The policy plans to establish three Global Innovation Districts: one in Bengaluru and two “Beyond Bengaluru.” These districts will feature world-class infrastructure, including high-speed internet, sustainable energy solutions, and top-tier R&D facilities. These innovation hubs aim to bring together startups, academic institutions, and large tech companies to foster collaborative innovation. Additionally, special incentives are planned for companies setting up in these districts, particularly in cities outside Bengaluru, to decentralize economic growth.

Centre of Excellence (CoE) for AI
A Centre of Excellence (CoE) for Artificial Intelligence (AI) will be established in Bengaluru, following the triple-helix model that connects academia, industry, and government. This CoE will focus on building compute capacity, developing ethical AI principles, and creating curated datasets for research and innovation. Additionally, the policy outlines the creation of an AI Skilling Council to guide curriculum development in higher education, with funding provided by the state.

Beyond Bengaluru Initiative
The Beyond Bengaluru initiative is a major thrust of the policy, aiming to spread GCC operations to other cities in Karnataka like Mysuru, Hubballi-Dharwad, Belagavi, Kalaburagi, Tumakuru, and Shivamogga. To encourage this, the state offers incentives such as:

• Rental reimbursements for companies establishing operations in these cities.
• Support for co-working spaces and infrastructure development, including roads, airports, and telecom facilities.
• Grants for R&D and AI infrastructure outside Bengaluru, along with Nano GCCs, smaller, more flexible centres with 5 to 50 employees, which will benefit from special incentives.

Supporting AI and Engineering R&D

The policy places significant emphasis on Engineering Research and Development (ER&D), acknowledging that this sector contributes over $34 billion to the GCC ecosystem in India. Karnataka, already a leader in ER&D, will promote innovation ecosystems and public-private partnerships to advance research. A dedicated AI innovation fund of INR 100 crore will be set up to support joint research between academia and GCCs. Additionally, the state will focus on intellectual property (IP) creation, aiming to retain IP generated within Karnataka.

Talent Development Initiatives
Recognising the importance of skilled talent for the growth of GCCs, Karnataka’s policy focuses heavily on upskilling the local workforce. The government will incentivise GCCs to conduct skilling programs for both graduates and diploma holders, providing financial reimbursements for internships and training programs. Over one lakh students are expected to benefit from these initiatives, with an emphasis on AI, machine learning (ML), blockchain, and other emerging technologies.

Further, the policy also seeks to develop leadership skills through partnerships with prestigious educational institutions. Financial incentives will be provided to GCCs for setting up global leadership development programs, focusing on cross-cutting fields like sustainability, global business strategy, and ethical leadership. Internship stipends will be reimbursed, and the state aims to facilitate one lakh internships during the policy period.

Incentives and Infrastructure Development
A significant part of the policy focuses on creating a conducive environment for new GCCs, particularly in areas Beyond Bengaluru. The government will provide infrastructure support and financial incentives for companies setting up operations outside the state capital. Key measures include:

• Rental assistance for GCCs in Beyond Bengaluru, with reimbursement schemes for companies that employ more than 100 workers.
• Exemptions from electricity duty, reimbursement of internet expenses, and property tax relief for GCCs operating in these regions.
• Recruitment assistance to GCCs, helping them source local talent.

Regulatory Easing
The Karnataka government is set to create a dedicated GCC support unit to streamline operations and ensure smooth regulatory processes for companies. This unit will offer:

• Single Point of Contact (SPOC) for all regulatory matters.
• A commercial real estate portal to help GCCs find office spaces quickly.
• Fast-track approvals for setting up operations, with a commitment to process approvals within 45 days.

Also Read | Bengaluru’s Thriving Journey from BPO Centre to Global GCC Hub

The Karnataka GCC Policy 2024-2029 represents a forward-thinking, inclusive approach to driving global business and innovation in the state. With its ambitious targets, comprehensive incentives, and focus on both Bengaluru and Beyond Bengaluru, the policy seeks to solidify Karnataka’s status as the premier destination for Global Capability Centres. Through strategic investments in talent, AI, infrastructure, and regional growth, Karnataka continues to position itself as a leader in the global digital economy, fostering long-term growth and creating substantial economic impact.

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