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Karnataka's merchandise exports to touch $35.3 bn by FY25: India EXIM Bank.
Feb 09, 2022

India EXIM Bank expects exports from Karnataka will strengthen by financial year 2025. Karnataka’s merchandise exports to touch $35.3 billion by FY 2025 from $16.6 billion in FY 2020. The state’s software and services exports are expected to reach $150 billion by 2024-25, up from $83.9 billion in 2019-20, as has been set by the Karnataka Government.

As per the study, merchandise exports from Karnataka in 2019-20 were valued at $16.6 billion, and registered an average annual growth rate of 4.8 per cent, during 2010-11 to 2019-20. Some of the major items exported by Karnataka include petroleum products, RMG cotton, iron and steel, electronic instruments, and electronic components. The State has a well-diversified export basket vis-à-vis the States such as Maharashtra and Tamil Nadu and has a huge potential. Karnataka has emerged as a technology, services, and knowledge hub of the country drawing a niche for itself. This largely gets explained by the plethora of job opportunities in the State, leading to migration of labour from across the country to Karnataka.

Over the last few decades, the State of Karnataka has been on the forefront of India’s economic growth, transitioning from a primarily agrarian state to emerge as the Silicon Valley of India. With a share of 8 per cent in 2018- 19, Karnataka was the fifth highest contributor to India’s GDP of Rs 140.9 trillion, after Maharashtra (14.5 per cent), Tamil Nadu (8.6 per cent), Uttar Pradesh (8.4 per cent) and Gujarat (8.1 per cent). Remarkably, the per capita income in Karnataka has not only risen, but has also exceeded the national average during the period 2011-12 to 2019-20, said the study ‘Strengthening Exports from Karnataka’.

lectronic and computer software, engineering goods, readymade garments, petrochemicals, gems and jewellery, agro and food processing products and chemicals, apart from its traditional exports of coffee, silk, spices and handicrafts.

The study highlights that Karnataka attracted FDI inflows worth $ 8.9 billion in 2019-20, which was 17.9 per cent of the total FDI inflows in India during the year, and Karnataka was the second highest recipient of FDI inflows in India next to Maharashtra which received FDI of $10.8 billion.

Along with these findings published in the study, India EXIM Bank also analysed the status of trade enabling infrastructure in Karnataka and recommended strategies for plugging the existing gaps, including development of ICDs, focusing on urban city planning, leveraging the Trade Infrastructure for Export Scheme (TIES), and many more.

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