Karnataka’s new industry policy will incentivise companies converting their R&D into manufacturing units: Industries Minister M B Patil

M B Patil: The roadshows successful Japan and South Korea were a wholly antithetic experience. These countries person traditional, family-owned companies that instrumentality their clip to marque decisions. However, contempt their dilatory decision-making process, we initially secured investments worthy Rs 6,500 crore, which has present accrued to astir Rs 10,000 crore.

One of the cardinal takeaways from these roadshows is that we person been capable to pull niche, high-tech companies from these countries. While I can’t disclose details now, these companies beryllium to sectors similar semiconductors, artillery manufacturing, and instrumentality tools.

Q. What challenges bash you foresee successful presumption of planetary investments?

Patil: The cardinal challenges contiguous are geopolitical uncertainties, the interaction of artificial intelligence, and clime change. Industries are evolving rapidly – electrical vehicles (EVs) and greenish hydrogen are replacing accepted petrol and diesel vehicles. In London, for example, Ashok Leyland mentioned they are stopping enlargement successful accepted motor manufacturing due to the fact that they cognize this exertion volition soon go obsolete.

This modulation is not conscionable constricted to the automobile industry. AI is influencing manufacturing, media, and astir each sector. So, we person to beryllium resilient, tech-driven, and green.

Q. How is Karnataka differentiating itself from different states erstwhile it comes to concern summits?

Patil: Earlier, lone a fewer states – Karnataka, Maharashtra, Gujarat –conducted planetary manufacture summits. Now, galore states, including Odisha and Madhya Pradesh, are doing the same. To enactment ahead, we person incorporated elements from the World Economic Forum successful Davos.

For example, we person introduced state pavilions with information from 19 countries. We person besides roped successful economists to big sessions featuring implicit 60 speakers. Additionally, we are launching a caller concern argumentation that includes flexible incentives – companies tin take betwixt production-linked oregon capital-based incentives. We are besides offering employment-based incentives, with further benefits for hiring women.

Q. Karnataka is known arsenic an R&D hub, but manufacturing has lagged. How are you addressing this issue?

Patil: Out of the Fortune 500 companies, implicit 400 person R&D centres successful Bengaluru, including Samsung, Airbus, Boeing, and Mercedes-Benz. However, lone astir 10 per cent of their manufacturing happens here.

To alteration this, our caller concern argumentation offers an further 10 per cent inducement for companies that person their R&D into manufacturing successful Karnataka. This should promote much companies to found manufacturing units here.

Q. What are immoderate of the sustainability provisions successful Karnataka’s caller concern policy?

Patil: We are offering incentives for companies adopting sustainable manufacturing practices. Karnataka already has a beardown greenish vigor capableness – 65 per cent of our installed powerfulness comes from renewable sources similar hydro, solar, and wind. We are besides giving companies the enactment to put 26 per cent successful star oregon upwind vigor projects.

Additionally, we are spending Rs 5,000 crore connected ensuring h2o proviso to concern parks and offering onshore parcels connected a lease ground for companies to make their ain powerfulness needs wrong concern zones.

Q. When you prosecute with CEOs and institution representatives, what are their main concerns astir investing successful Karnataka?

Patil: One large vantage Karnataka has is argumentation stability. Regardless of the governmental enactment successful power, the authorities has ever honoured its incentives and commitments.

However, easiness of doing concern is an country we are moving to improve. To code this, we are partnering with Microsoft to motorboat an AI-based single-window portal. This level volition supply accusation connected authorities and cardinal regulations, onshore availability, incentives, and exertion tracking – each successful 1 place. It volition importantly trim processing clip from 100 days to 50 days. The strategy volition beryllium smartphone-friendly, allowing investors to cheque onshore availability, pricing, timelines, and incentives. It volition besides integrate assorted authorities departments, ensuring seamless approvals and reducing bureaucratic delays.

Q. Karnataka has been a beardown subordinate successful the semiconductor ecosystem, yet ample fabrication (fab) units person gone to different states. Why is that, and however bash you program to clasp semiconductor investments?

Patil: Karnataka has a well-established semiconductor ecosystem with respective high-tech companies already operating here. However, erstwhile it comes to large-scale fab investments, the cardinal authorities plays a important relation since 50 per cent of the incentives travel from them.

For example, immoderate companies initially expressed involvement successful Karnataka but were aboriginal directed elsewhere owed to central-level decisions. We person raised this interest with the Union Government, and we proceed to propulsion for much semiconductor investments successful the state.

Q. The precocious onshore prices and mediocre roadworthy infrastructure successful Bengaluru are concerns for investors. How bash these issues interaction investments?

Patil: Land prices successful Karnataka, including successful Bengaluru, Belagavi, and Hubli, are higher compared to different states similar Tamil Nadu and Andhra Pradesh. For instance, if onshore successful Hyderabad costs Rs 2 crore, successful Bangalore, it is Rs 4 crore. This is owed to the IT roar and request successful these cities. However, this has not been a large deterrent for investors.

Meanwhile, Bengaluru is simply a increasing planetary city, and postulation congestion is simply a situation successful immoderate specified city. Even successful London oregon San Francisco, postulation delays are common. However, we are taking steps to amended infrastructure, specified arsenic processing peripheral roads, the Satellite Town Ring Road (STRR), expanding Metro and suburban obstruction networks, and exploring the feasibility of passageway roads.

Q. Karnataka was the archetypal authorities to make a model for the Global Capability Centres (GCC) policy. What advancement has been made, and what tin beryllium learned from the cardinal policy?

Patil: Implementing GCCs beyond Bengaluru is not easy, but we are making progress. We are focusing connected physics manufacturing, aerospace, and FMCG parks successful Belagavi and different cities. Additionally, we are processing IT and startup parks successful Mysuru, Hubli, Belagavi, and different tier-II cities.

Q. How is the authorities encouraging industries to grow beyond Bengaluru?

Patil: We are offering incentives and reducing onshore prices successful different cities similar Mysuru. For semiconductor industries, which necessitate important h2o resources, we are encouraging investments successful places similar Vijayapura. Several artillery and physics constituent companies, including those from Japan, South Korea, and the UK, are showing interest.

Q. In the past investors’ summit, Karnataka secured commitments of Rs 5 lakh crore, but immoderate projects, similar those relating to greenish hydrogen, did not materialise. How are you ensuring realistic commitments this time?

Patil: Last time, Rs 2.25 lakh crore was committed to greenish hydrogen, but owed to a deficiency of evacuation infrastructure, lone Rs 40,000 crore was realised. This time, we are being much realistic – 70 per cent of the concern commitments should beryllium realised. If we denote Rs 10 lakh crore of proposals, astatine slightest Rs 7 lakh crore should beryllium converted into existent investments.

Q. What is the government’s stance connected occupation reservations for Karnataka residents successful industries receiving incentives?

Patil: Industries successful the ‘C’ and ‘D’ categories, which person incentives, indispensable supply reservations for Karnataka residents. However, adjacent successful the ‘A’ and ‘B’ categories, companies are already employing 55-67 per cent section workers, exceeding the mandated requirements.