Karnataka's draft GCC policy: 3.5 lakh jobs by 2029, special package for Beyond Bengaluru clusters

Karnataka is the first state in the country to come up with a dedicated GCC policy to attract higher investment in the growing sector

Karnataka government unveiled the draft Global Capability Centres (GCC) Policy on September 27, targeting 500 new GCCs by 2029.

The 2024-2029 policy aims to create 3.5 lakh new jobs and generate an economic output of $50 billion.

Also, read: Karnataka wants to be home to 15% of global GCCs by 2030, eyes 1 million jobs

Karnataka is the first state in the country to come up with a dedicated GCC policy to attract higher investment in the growing sector. A GCC is an offshore unit set up by a company in a foreign country to in-source IT and other related business functions.

The government will establish three new technology parks—Global Innovation Districts—including one in Bengaluru and two in the Beyond Bengaluru clusters. These districts will have state-of-the-art infrastructure, including high-speed internet and reliable power supply, and will adhere to global sustainability standards.

Karnataka IT-BT minister Priyank Kharge said: “GCCs have evolved from back-office operations to becoming critical drivers of global strategic initiatives, R&D, and technology solutions."

“With over 1.2 million workers contributing $22.2 billion to the economy, GCCs have been a vital source of growth and employment in Karnataka. We expect the sector to grow at a compound annual rate of 12-14% over the next decade, with Karnataka holding nearly 50% of the national GCC market by 2029,” Kharge added.

Also, read: Karnataka to establish Center of Excellence in AI and unveil GCC policy soon

The policy aims to facilitate internships for up to Rs 1 lakh individuals in leading GCCs. Additionally, Rs 100 crore has been earmarked for an innovation fund to support joint research projects between academia and GCCs.

Companies establishing their GCCs as anchor investors in Beyond Bengaluru’s Global Innovation Districts will receive special incentive packages. "These innovation districts are designed to foster collaboration among startups, tech leaders, and academic institutions, leveraging a skilled talent pool from nearby universities" said Kharge.

Special package for Beyond Bengaluru clusters

IT-BT secretary Ekroop Caur said: “Our focus is on expanding the GCC ecosystem beyond Bengaluru through the introduction of the Beyond Bengaluru Package”.

She said policy offers various incentives for GCCs setting up in Beyond Bengaluru clusters, including recruitment assistance, rental support, co-working space creation, property tax reimbursement, and the formation of cluster anchor groups.

“Anchor investors in these districts will receive special incentives, and mega projects will be eligible for customised packages” she adds.

Also, read: Karnataka set to be the first state to come up with GCC policy by August

Key 'Beyond Bengaluru' cities such as Mangaluru, Mysuru, Hubballi-Dharwad - Belagavi, Kalaburagi, Tumakuru, and Shivamogga are targeted for GCC expansion. "These cities already have a strong foundation in IT and technology and will benefit from this initiative" said Caur.

The state government will also establish a Centre of Excellence (CoE) for AI in Bengaluru. The policy also proposes to create a dedicated GCC support unit to act as a Single Point of Contact (SPOC) to streamline approvals, facilitate real estate scouting, and promote integration with local ecosystems.

"The establishment of Nano GCCs in Beyond Bengaluru areas to support operations with staffing between 5 to 50 employees" said Caur. The draft policy is now open for public comments.

Also, read: Karnataka to unveil dedicated policy for Global Capability Centers on Sept 27