27 January , 2022 Fdiindia
Karnataka Could Create History as Top Investment Destination in India
Karnataka has attracted the highest foreign direct investment (FDI) in the first two quarters of the financial year 2021-22. It could surpass Maharashtra, Gujarat, and Delhi as the top choice of foreign investors.
Riding on the back of the high FDI inflow, Karnataka Minister for Large and Medium Industries Murugesh Nirani invited Tesla to set up a manufacturing unit in Bengaluru after Elon Musk mentioned the “challenges with the Indian government”.
Karnataka recorded 48 percent and 41 percent of the total FDI inflow in India in the first two quarters of FY 2021-22. The state received more than Rs. 1.02 lakh crore in FDI by the end of September 2021. This amount is almost 45 percent of the total FDI in India.
If the current trend continues, Karnataka will trump Maharashtra, Gujarat, and Delhi regarding FDI inflow during the pandemic. Maharashtra was the last state to account for more than 45 percent of the country’s total FDI inflow in 2008-2009.
“The largest inflow of FDI to Karnataka has been towards aerospace and defence manufacturing, agrotech, fintech, biotech, nanotechnology, electronics, drone technology, hospitality, food processing, hardware, and electronic system design and manufacturing (ESDM),” said Mr. Nirani.
Industry experts and insiders attribute Karnataka’s success in attracting foreign investment to the government’s futuristic outlook and investor-friendly policies, the supremacy of local firms, and a development-oriented bureaucracy and political atmosphere.
“One of the first big investors for Karnataka were Toyota and Boeing for automobiles and aerospace. We moved towards setting up country-specific industrial park like Japan Industrial Township in Tumakuru, Taiwan industrial park in Devanahalli. We offered more incentives in Tier II cities to take industries out of Bengaluru. Hosting multiple delegations, visiting many countries to invite them to invest is all yielding results,” said Former Karnataka Chief Secretary K. Ratna Prabha.
Nirani is confident about Karnataka remaining the top choice for overseas investors due to the state’s industrial policy and clearance committees.