Karnataka is poised for an ambitious expansion of its technology ecosystem, with investments surpassing ₹1 trillion aimed at enhancing Bengaluru’s infrastructure. The state government has announced plans for a new IT and AI-focused city in Bidadi, as stated by Deputy Chief Minister DK Shivakumar during the inaugural day of the Bengaluru Tech Summit 2025.
“We are developing residential layouts for NRIs, a world-class city near Bidadi on 9,000 acres. We are building an international complex to house all international business houses,” Shivakumar remarked.
Highlighting Bengaluru’s strengths, Shivakumar noted the city’s unparalleled talent pool, stating, “There are about 25 lakh IT experts in Bengaluru, and no other place on earth has this kind of talent pool.” He also mentioned proposals for a second airport and a dedicated NRI Secretariat to better support the global community.
The renewed focus on technology aligns with Karnataka’s strategy to attract international partnerships. “Leaders from several countries keep meeting me. They are all excited about investing in Bengaluru, and we are supporting their investments in every way possible,” he added, noting the participation of representatives from 60 countries in this year’s summit.
The summit anticipates approximately 50,000 participants and about 1,500 major companies, indicating a substantial international interest in Karnataka’s tech landscape.
Karnataka’s Capacity for Innovation
Shivakumar emphasized the local capacity for innovation, urging the youth to compete on a global scale. “The local talent, innovation, technology, and startups will take Karnataka in a new direction if encouraged properly. We will always support those who come to Karnataka seeking opportunities,” he affirmed.
Praising the contributions of IT Minister Priyank Kharge and KIONICS head Sharath Bachegowda for enhancing the state’s digital environment, Shivakumar noted that Bengaluru’s atmosphere is conducive to development.
In a bid to balance growth across regions, the government is pushing for the establishment of the Bidadi AI City as part of its strategy to alleviate pressure on Bengaluru. A LinkedIn post by Gurgaon-based CFO Sarthak Ahuja highlighted the incentives outlined in Karnataka’s IT Policy for 2025-2030, which he described as exceptionally generous for startups willing to relocate to tier-two cities.
Ahuja noted, “The Govt is paying you to move out of Bangalore,” emphasizing the financial benefits available. Startups that relocate or expand beyond Bengaluru can access a 50% rent reimbursement up to ₹2 crore, a 30% reimbursement of property tax for three years, a complete electricity duty waiver for five years, and a 25% reduction in telephone and internet bills up to ₹25 lakh. The policy also supports research and development with a 40% reimbursement up to ₹50 crore, specifically for work in areas like artificial intelligence, quantum computing, and blockchain.
The state has allocated roughly ₹960 crore over five years for these incentives, available to a limited number of recipients in each category, with applications expected to open once detailed guidelines are released in December. Startups must operate in designated tier-two and tier-three locations, including Mysuru, Mangaluru, Hubballi Dharwad, Belagavi, and others, to qualify.
This initiative is part of the “Beyond Bengaluru” plan aimed at distributing technological growth across Karnataka while reducing the strain on its capital.
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