Karnataka is India’s largest software exporter, second largest chip design hub, fourth largest automobile producer and fourth largest contributor to electronic industrial output. It is also a leader in exports of readymade garments, gems and jewellery, petrochemicals and engineering goods from the southern region of India. Karnataka has vibrant automobile, agro, aerospace, textile & garment, biotech and heavy engineering industries. The state has sector-specific SEZs for key industries such as IT, biotechnology, and engineering, food processing and aerospace. Karnataka is the IT hub of India and home to the fourth largest technology cluster in the world. In 2017-18, merchandise exports from the state aggregated to USD $18.05 bn.

Karnataka boasts of a diverse flora and fauna and a 320 km natural coast line, which makes it a nature tourist's paradise. Tourist arrivals in the state increased from 36.7 million in 2006 to 102.3 million in 2017. The state has attracted Foreign Direct Investment (FDI) equity inflows worth USD $35.69 bn during the period April 2000 to December 2018, according to data released by Department for Promotion of Industry and Internal Trade (DPIIT).

  • Largest software exporter in India
  • Largest producer of aerospace and defence equipment in India
  • India’s #1 coffee producing state
  • 2nd largest chip design hub


The state is home to 20% of India’s total garment production valued at $1.6 bn. Karnataka accounts for 65% silk production, 12% wool fabrication, and 6% of cotton production in the country. The state has a 5% share in global textiles and apparel trade and contributes 15% to India’s export earnings.


Heavy Engineering and Machine Tools

Karnataka is the 2nd highest producer of special purpose machinery and heavy electrical machinery in India. Bengaluru produces about 60% of India’s total machine tools by value.


Automobile and Auto Components

Karnataka is the fourth largest state in automotive production, contributing 8.5% to the national output. It is home to 7 major OEMs and more than 50 auto component manufacturers.

Information Technology

Karnataka has emerged as an information technology (IT) hub of India. The state is India’s largest software exporter, with IT & electronic products exports totalling to $30.41 bn in 2017-18 (up to September 2017). Home to the world’s 4th largest technological cluster, the state has over 3,500 IT companies employing 4 mn direct and indirect professionals.


Agri and Food Processing

Karnataka accounts for 75% flower production, 70% coffee production and 47% of silk production in India. The state has ten agro-climatic zones with 6 types of soil, making it conducive to grow a large variety of crops. There are 7 food parks, a spice park and a seafood park established in the state.



Karnataka accounts for 60% of total biotech companies, which is highest in India and, therefore, is a popular destination for biotech start-ups. More than 60% of the biotechnology companies in India have a base in Bangalore and the state drives 50% of the total revenues in India’s biotechnology sector.


Electronic System Design and Manufacturing

The ITE&C (Information Technology, Electronics & Communication) department of the state has established a new IoT policy within the state with a view to attain a substantial market share in India’s IoT market by 2020. Karnataka contributed 10% of the country’s electronic industrial output and is home to 70% of India’s chip designers making it the 2nd largest chip design hub of India.


Aerospace and Defence

The state attracts 65% of the aerospace investments in the country. The state government has established a 405 ha aerospace park with a 102 ha special aerospace SEZ at Devanahalli near Bengaluru international airport. Karnataka is the first state which came out with an aerospace policy in the country. Karnataka Aerospace Policy has identified an investment potential of USD $12.5 bn in this sector during 2013–23 and plans to develop aerospace clusters in different regions of the state.



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