India has become a global hub for Global Capability Centres (GCCs), with multinational companies establishing technology and business service hubs across the country. Karnataka leads this ecosystem due to its strong technology base and skilled workforce, prompting the Government of Karnataka to introduce the Karnataka GCC Policy 2024-29.
Understanding Global Capability Centres
Under the Karnataka GCC policy, a Global Capability Centre (GCC) is a fully owned hub set up by multinational corporations to manage global functions such as R&D, IT, and business services. In Karnataka, many GCCs have evolved from back-office roles into innovation-driven centres for product development, digital transformation, and advanced research.
Key Highlights of the Policy
1. First Dedicated GCC Policy:
Karnataka became the first Indian state to introduce a dedicated policy for Global Capability Centres, launched in November 2024 at the Bengaluru Tech Summit.
2. Target of 1,000 GCCs:
The policy aims to attract 500 new GCCs and increase the total number in the state to around 1,000 by 2029.
3. Employment Generation:
It is expected to create about 3.5 lakh new jobs in technology, analytics, engineering, and digital services.
4. Economic Output Goal:
The GCC ecosystem is projected to generate around $50 billion in economic output by 2029.
5. Focus on Emerging Technologies:
The policy promotes GCCs working in AI, machine learning, deep tech, semiconductor design, data science, and advanced analytics.
6. Industry-Academia Collaboration:
Partnerships between universities, research institutions, and GCCs are encouraged to strengthen innovation and skill development.
Vision of the Policy
The policy aims to position Karnataka as a global GCC hub by promoting innovation, high-value operations, and skill development. It also encourages investments beyond Bengaluru in cities such as Mysuru, Mangaluru, Hubballi-Dharwad–Belagavi, Tumakuru, Shivamogga, and Kalaburagi to support balanced regional growth and employment.
Eligibility Criteria
The policy in Karnataka supports new GCC setups and existing GCC expansions meeting minimum investment and employment thresholds. Eligible sectors include:
- Technology, IT, and IT-enabled services
- Business and financial services
- Retail and consumer industries
- Manufacturing and engineering R&D
- Healthcare and life sciences
- Shared services such as HR, procurement, and legal operations
- Artificial intelligence, data science, and advanced analytics
- Deep-tech research, including semiconductors and advanced engineering
- Innovation labs and centres of excellence
- Technology and digital transformation hubs
Certain programs also extend to startups and industry associations to promote innovation and ecosystem development during the policy period, i.e., 2024-29.
Incentives for GCCs
To attract global companies and encourage innovation-led operations, the Karnataka GCC Policy offers a wide range of incentives.
A. For any new or existing GCCs in the state
1. Internship and Talent Development Support
Talent development is a key focus in Karnataka. The government reimburses 50% internship stipends up to ₹5,000 per month for 3 months, covering 15% of a GCC’s workforce (max 100 interns annually). It also reimburses 20% of skilling costs, up to ₹36,000 per graduate and ₹18,000 per diploma holder annually.
2. Innovation and R&D Support
Innovation is a key pillar of the policy in Karnataka. GCCs in Bengaluru can receive 40% capital expenditure support (up to ₹5 crore) for innovation labs and Centres of Excellence. The policy offers 100% reimbursement up to ₹40 lakh for startup collaborations and funds public service innovation challenges up to ₹1.5 crore per project.
3. Intellectual Property and Quality Certification Support
Recognising the importance of innovation and global standards, the policy offers financial support for intellectual property creation and quality certifications.
Companies can receive 50% reimbursement of domestic patent filing fees, up to ₹2 lakh. Similarly, the government reimburses 50% of certification costs, up to ₹6 lakh, to encourage companies to adopt international quality standards.
4. Infrastructure and Operational Support
The policy improves regulatory processes and infrastructure to address operational challenges. Applications for connectivity infrastructure such as cable laying, towers, and antennae will be processed within 30 working days. The Government of Karnataka will also establish a GCC Incentive Clinic as a dedicated helpdesk to support GCC operations.
B. Incentives for Beyond Bengaluru Regions
Companies establishing innovation labs or centres of excellence in Beyond Bengaluru clusters can receive up to 75% funding of capital expenditure, capped at ₹3 crore.
Additional incentives include:
- 30% reimbursement of property tax for three years
- 50% reimbursement of patent filing fees up to ₹3 lakh
- 80% reimbursement of quality certification cost up to ₹8 lakh
These incentives are designed to encourage companies to consider emerging cities as viable alternatives for expansion.
C. For any new or existing GCCs in the Beyond Bengaluru area with minimum 100 employees
1. Recruitment and Rental Assistance
Companies can receive reimbursement of recruitment expenses, capped at 50% of total costs, up to ₹7 crore.
Rental assistance is also available based on the scale of operations:
- GCCs with 100+ employees can receive up to ₹50 lakh in rent reimbursement.
- GCCs with 500+ employees can receive up to ₹2 crore in rent reimbursement.
These incentives are available to a limited number of companies each year, ensuring targeted support for high-impact investments.
D. For Real Estate entities
The government reimburses vacant co-working seat costs for up to three years, based on the number of unoccupied seats.
E. Additional Operational Incentives
New GCCs in Beyond Bengaluru regions may also receive additional operational support, including:
- EPF contribution reimbursement of up to ₹3,000 per employee per month for two years
- Reimbursement of 25% of internet expenses, up to ₹12 lakh over three years
- 100% reimbursement of electricity duty and the option to shift from commercial to industrial power tariffs
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The Karnataka GCC Policy 2024–29 represents more than a government initiative, it is a deliberate, high-stakes bet on Karnataka’s ability to compete at the forefront of global innovation. By combining targeted financial incentives, industry-academia partnerships, and a conscious push toward regional cities beyond Bengaluru, the policy addresses both ambition and equity. If its targets are met, Karnataka will not only cement its status as India’s undisputed technology capital but also redefine what a Global Capability Centre can achieve, shifting the narrative from cost-efficient back-office operations to world-class innovation and R&D. For multinational corporations evaluating their next strategic hub, Karnataka has made its case emphatically clear.
