NEWS

• Karnataka continues to be India’s services-export powerhouse, with Bengaluru driving the majority share.
• India’s services exports touched a record $387.54 billion in FY25, with Karnataka contributing ~40%.
• Bengaluru alone accounted for $78.64 billion in 2024–25—about 35% of India’s total.
• State services exports estimated at over $150 billion in FY25 reaffirm its national leadership.

WHY KARNATAKA LEADS:

• Highly developed IT-ITES ecosystem
• Strong talent base in engineering, R&D, cloud, AI, cybersecurity
• Presence of 500+ Global Capability Centres (GCCs) employing 35% of India’s GCC workforce
• Services sector contributes 68.1% of Karnataka’s GSVA (2024–25)

MAJOR SECTORS DRIVING EXPORT GROWTH

IT & IT-Enabled Services

• Software development, cloud operations, cybersecurity, data engineering, SRE.
• Key markets: US, EU, with rising demand from GCC and APAC.

Global Capability Centres (GCCs)

• Transitioned from back-office roles to AI/ML, product engineering, cybersecurity, design systems, risk analytics.
• Supported by the Karnataka GCC Policy 2024.

Engineering, Consulting & ER&D

• Growth in energy transition, mobility, digital infra, smart cities, deep-tech R&D.

EMERGING SECTORS POWERING FUTURE GROWTH

• AVGC-XR (animation, VFX, gaming, extended reality) booming under AVGC-XR Policy 3.0 (2024–29).
• Surge in healthcare exports, tele-diagnostics, engineering R&D consulting.
• Bengaluru’s GCC 2.0/3.0 wave driving AI-driven platforms and next-gen product innovation.

 KEY CHALLENGES HINDERING GROWTH

Urban Infrastructure Strain

• Severe traffic congestion, long commutes, overloaded utilities, and fragile civic systems.
• These raise delivery costs and slow decision-making.
• High-demand office spaces push up rents, hitting MSMEs hardest.

Demand Volatility

• Global uncertainties, interest rate swings, and client budget cuts affect export pipelines.
• Firms must diversify markets and build financial buffers.

Compliance Burden

• Complex data regulations (domestic & global), sectoral compliance, and RBI reporting norms.
• Smaller firms lack legal/finance capacity to manage heavy documentation loads.