India’s Karnataka state plans incentives to double global centers to 1,000 by 2029

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BENGALURU (Reuters) – India’s Karnataka state aims to double its global capability centers (GCCs) count to 1,000 and create 350,000 new jobs by 2029, according to a draft policy launched on Friday, Sept. 27, 2024, aimed at attracting more foreign companies to set up local offices.

According to the draft policy, the first by any Indian state, the government has outlined incentives such as reimbursing rents and some patent fees, and an exemption from electricity duty depending on how many employees a GCC adds.

It is also aiming to generate economic output of $50 billion through the new offices by 2029.

GCCs, which were low-cost outsourcing hubs for global firms, have evolved over the last few years and are now used to support their parent organizations in multiple functions, including daily operations, finance, and research and development.

More than 1,700 GCCs operate across India, employing over 1.9 million people.

A report by IT industry body Nasscom and consulting firm Zinnov earlier this month estimated that this number could rise to 2,100-2,200 by 2030, employing 2.5 million to 2.8 million people.

The government in a statement said that these incentives are also meant to encourage companies to set up operations in cities outside the tech hub of Bengaluru, such as Mangaluru, Mysuru, and Tumakuru.

Apart from this, the government also plans to establish three new tech parks, fund some skills courses, and provide grants for research projects – especially those that focus on artificial intelligence.

Karnataka’s draft policy will be open for inputs until Nov. 11.