Karnataka has decided to overhaul its investment promotion agency in order to attract more business, following stiff competition from neighbouring states.
"We have decided to overhaul the Invest Karnataka Forum (IKF) with three key goals in mind. These are: become a $1 trillion economy by 2032, promote Beyond Bengaluru initiatives, and generate 25 lakh jobs across Karnataka within five to seven years," MB Patil, Karnataka Minister for Commerce, Large & Medium Industries and Infrastructure Development told Moneycontrol.
"The state industries department needs to be professional, ensure continuity, and break bureaucratic barriers. This will help attract investments and drive industrial growth and job creation in Karnataka," said Patil.
The move comes ahead of Karnataka's Global Investors Meet (GIM) — Invest Karnataka — scheduled in February 2025. The state recently launched the Knowledge, Wellbeing, and Innovation (KWIN) City, a futuristic project located around 50 km from downtown Bengaluru.
Also, read: Karnataka's KWIN City to host 5 lakh residents, top foreign educational institutions
“Karnataka is a pioneer in many sectors, but we cannot afford to be complacent. IKF is now primarily focused on industry facilitation, but we need to be more aggressive in the current scenario," a source aware of the developments told Moneycontrol.
The revamped Invest Karnataka Forum (IKF) will be led by a full-time CEO belonging to the IAS cadre. Reporting to the CEO will be a team of five to 10 full-time professionals recruited laterally, who will serve for a period of three-five years. The team will also include members from consulting firms, industry and trade associations, social impact organisations, and others.
"A young IAS officer will also be appointed to the IKF to negotiate with investors. We have studied the best practices of several states and countries, and the finance department has already given the green light," the source said.
The revamped IKF will focus on electronics system design and manufacturing (ESDM), with an emphasis on semiconductors, e-mobility, core manufacturing, FMCG, healthcare, pharma, and biotech.
Will prioritise Beyond Bengaluru clusters: Minister
The minister said the government will prioritise Beyond Bengaluru clusters like Mysuru, Tumakuru, Mangaluru, Hubbali-Dharwad, Belagavi, Vijayapura and Kalaburagi. "The IKF is inspired by models from Singapore, Chile, Invest India, and others. Sector leads will be tasked with attracting investments in their respective areas and representing the state both nationally and globally. The newly formed body will prioritise Beyond Bengaluru initiatives," said Patil.
The minister said that the overhaul of IKF aims to bring corporate finesse to the industries department. "This is to establish clear targets and a competent task force equipped to achieve them. This is one of the most significant changes in recent years to attract investments".
Patil said they will be offered competitive salaries. The government also plans to appoint a Chief Operating Officer (COO), an industry veteran at the senior vice-president level, with an annual salary of Rs 70-90 lakh. The investment promotion head is likely to get Rs 35-45 lakh, the four sector leads will earn Rs 30-40 lakh each, and the head of market intelligence and analytics will receive Rs 20-25 lakh annually.
Also, read: What is lateral entry and why has it become flashpoint between Congress, BJP
Competition from other states
As companies adopt the China+1 strategy to diversify their supply chain and reduce dependency on the country, Indian states are leaving no stone unturned to capture business. Karnataka is now facing stiff competition from places such as Tamil Nadu, Telangana, Maharashtra, Uttar Pradesh, Gujarat, and Andhra Pradesh.
In Tamil Nadu, Guidance, the state's nodal agency for investment promotion and single-window facilitation, is wooing investors across the globe. Andhra Pradesh Chief Minister N Chandrababu Naidu is also revamping the AP Economic Development Board (APEDB) and hiring professional teams to attract investments to the state. Other states also have their nodal agencies, such as MAITRI (Maharashtra Industry, Trade, and Investment Facilitation Cell), Invest UP, Gujarat's Industrial Extension Bureau (iNDEXTb), and Invest Punjab, all of which are aggressively attracting investments to their respective states by offering incentives, as well as concessional land, power, and water.
Also, read: How southern states will benefit from Apple supplier Foxconn's China+1 strategy
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
