Karnataka's Global Capability Centres Policy: An In-Depth Guide

Karnataka, particularly its capital Bengaluru, has emerged as a pivotal hub for Global Capability Centres (GCCs) in India. With over 500 GCCs and accounting for 35% of the country’s GCC workforce, Karnataka is recognized for its diverse talent pool, innovative ecosystem, and favorable business climate. The state has set ambitious goals for the GCC sector through a comprehensive policy framework, the first of its kind, cultivating growth and innovation.

Introduction to Global Capability Centres (GCCs)

GCCs have evolved from traditional back-office functions to strategic entities that drive innovation within multinational corporations (MNCs). The transformative years between 2005 and 2012 marked the rise of Global In-house Centers (GICs), as GCCs began to undertake more complex, value-added roles. Initially focused on cost savings, these centers now play critical roles in research, development, and high-value operations. The GCC landscape in India has diversified across various sectors such as engineering research and development (ER&D), information technology (IT), retail, and banking.

Karnataka’s Vision 2030 for the GCC Ecosystem

The Karnataka government envisions a thriving ecosystem for GCCs by 2030, aiming to position the state as a global innovation hub. Key targets include:

• • • Establishing 1,000 GCCs in Karnataka by 2029.
    • Creating 350,000 new jobs in the state through these centers.
    • Generating an economic output of US$50 billion from the GCCs by 2029.

Objectives of the Policy

The primary objectives of the Karnataka GCC Policy are:

• • • To attract new investments and establish additional GCCs.
    • To enhance the local talent pool through skilling initiatives.
    • To foster a conducive environment for research and innovation.
    • To decentralize development beyond Bengaluru, promoting growth across the entire state.

Key Initiatives Under the Policy

The Karnataka government has outlined several key initiatives aimed at supporting the GCC ecosystem:

Global Innovation Districts

These districts are designed to create hubs of innovation where startups and established companies can collaborate on cutting-edge technologies. This initiative aims to foster an environment conducive to experimentation and co-innovation.

Innovation Fund

A dedicated fund to support innovative projects within GCCs, enhancing their capacity for research and development. This fund will be crucial in driving technological advancements and ensuring that Karnataka remains competitive on a global scale.

Centre of Excellence (CoE) for AI

This initiative focuses on advancing artificial intelligence capabilities within GCCs. The CoE will foster collaboration between academia and industry, ensuring that Karnataka remains at the forefront of AI research and application.

Beyond Bengaluru Package

To promote growth outside Bengaluru, this package provides incentives for establishing GCCs in Tier-II and Tier-III cities. This initiative aims to decentralize economic activity and ensure balanced regional development.

Dedicated GCC Support Unit

A specialized unit within the government will assist GCCs with regulatory requirements, operational challenges, and other needs. This support unit will streamline processes for setting up operations in Karnataka.

GCC Acceleration and Investment Council

This council aims to facilitate investments in existing centers while streamlining processes for setting up new ones. It will play a critical role in ensuring that Karnataka remains an attractive destination for global firms.

Global Leadership Development Skilling Program

A program designed to equip local talent with leadership skills necessary for managing global operations within GCCs. This initiative will help cultivate a skilled workforce capable of meeting the demands of a rapidly evolving industry.

Internships for 100,000 Candidates

To bridge the skills gap, this initiative will provide internships to students and young professionals in collaboration with GCCs. This program aims to enhance employability while meeting industry needs.

Key Pillars of the Policy

The Karnataka GCC Policy is built upon several key pillars that support its objectives:

Pillar 1: Talent

Karnataka boasts a diverse talent pool with a focus on STEM (Science, Technology, Engineering, Mathematics) fields. The state is home to prestigious institutions like IISc and IIM, contributing significantly to developing skilled professionals.

Pillar 2: Local Ecosystem

The policy encourages collaboration between startups, established firms, and educational institutions to create a vibrant local ecosystem conducive to innovation. This collaborative approach fosters knowledge sharing and accelerates technological advancements.

Pillar 3: Infrastructure and Incentives

Karnataka’s world-class infrastructure supports industries effectively. The government is committed to enhancing connectivity through improved transportation networks, including national highways and metro systems.

Pillar 4: Regulatory Easing

Streamlining regulations will make it easier for new businesses to set up operations while ensuring compliance with local laws. This regulatory easing is crucial for attracting foreign direct investment (FDI).

Summary of Policy Incentives

The Karnataka government has introduced several incentives aimed at attracting new GCCs:

• • • Financial grants for setting up operations.
    • Tax incentives are based on employment generation.
    • Subsidies for research and development activities.
    • Support for infrastructure development in emerging regions.

Importance of GCCs for India’s $1 Trillion Digital Economy Ambition

GCCs play a crucial role in realizing India’s ambition of becoming a $1 trillion digital economy. By driving technological advancements and creating high-value jobs, they contribute significantly to economic growth. The establishment of more GCCs in Karnataka is expected to enhance this contribution further.

Future Prospects

With ambitious targets set for 2029, Karnataka’s policy framework aims not only at increasing the number of GCCs but also at enhancing their operational capacities. The government’s commitment to fostering an environment conducive to innovation positions Karnataka as an attractive destination for global firms looking to establish or expand their operations in India.

Conclusion

Karnataka’s Global Capability Centres Policy represents a comprehensive approach to fostering innovation and economic growth within the state. By focusing on talent development, infrastructure enhancement, regulatory easing, and creating a vibrant local ecosystem, Karnataka aims to solidify its position as India’s leading hub for technology and innovation. As the state moves towards its ambitious targets for 2029, it remains poised to play a pivotal role in shaping India’s digital economy landscape.