K'taka services exports nearly doubles in 6yrs, breach $150bn mark

Time of India

2 days ago

Bengaluru: Karnataka's services-sector exports — spanning information technology, business process management, fintech, biotech, engineering design and other knowledge-based services — reached $159 billion in 2024-25, a 13.7% increase over the previous year.
In 2018-19, Karnataka exported $77.8 billion worth of software and services. After a slight dip to $79.2 billion in 2020-21 due to the pandemic, the sector rebounded to $101.8 billion the following year. Exports grew to $130.3 billion in 2022-23, $139.9 billion in 2023-24, and crossed the $150-billion mark this year — nearly doubling in six years.
The state continues to hold the top spot in the country for total services exports (see table), according to data from the Visvesvaraya Trade Promotion Centre (VTPC).
While VTPC didn't have a break-up for IT/ITeS immediately, officials said that a majority of the services exports are from the sector.
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Karnataka IT/BT secretary Ekroop Caur told TOI: "From FY2015 to FY2024, Karnataka's services sector grew at a CAGR of 8.3%, outperforming the national average of 6.3%. The 13.7% rise last year isn't a one-off — Bengaluru alone accounts for nearly 40% of India's IT/ITeS exports."
Pointing out that over 40% of India's 1,750+ GCCs are in Bengaluru, employing more than 8 lakh professionals, she said these centres are evolving into global R&D and innovation engines.
"Beyond IT/ITeS, we're also seeing contributions from fintech, biotech, product development and chip design. Skilling initiatives like Nipuna Karnataka are helping align our workforce with modern industry needs, particularly in AI, machine learning, cybersecurity and blockchain," she added.
TV Mohandas Pai, chairman of Aarin Capital, reiterating that Bengaluru remains the heart of Karnataka's services story, said 28 lakh people work here, across 65,000 companies and 20,000 startups.
"Each year, 100-200 new tech startups are born. Bengaluru has one of the world's largest concentrations of tech. But our biggest failure is infrastructure. There is no significant investment happening in the city or in smaller towns. Governments make big announcements — Rs 1 lakh crore, for instance — but the actual allocations are meagre," he added.
FKCCI president Balakrishna MG said the growth is driven by government efforts like the Karnataka Digital Economy Mission and the Beyond Bengaluru strategy.
"Our reputation, global links, and steady FDI inflows have positioned us well. But to sustain this, we need more IT parks in Tier-II cities, fewer regulatory hurdles for smaller firms, and large-scale upskilling to meet demand in AI, Web3, and cloud-based technologies. Karnataka must reposition itself globally not just as an IT hub, but as a centre for broader knowledge and innovation services," Balakrishna said.
PV Rai, managing director, Pixel Softek, cautioned against attributing the growth solely to government action. "It's the industry and the manpower, and the spurt in global capability centres (GCCs), that have propelled this. But the city's infrastructure is a serious concern. We lack proper roads, a clear masterplan, and IT-ready layouts. Without long-term, planned solutions, we risk losing momentum," he said.
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For Graphic:
Year Wise Service Exports From K'taka:
Year
Exports in Billion USD
2018-2019
77.8
2019-2020
83.8
2020-2021
79.2
2021-2022
101.8
2022-2023
130.3
2023-2024
139.9
2024-2025
159.1
Service Exports: Top 6 States & All India for 2024-2025:
State
Exports in in Billion USD
Karnataka
159.1
Maharashtra
62.1
Tamil Nadu
48.4
Uttar Pradesh
18.9
Andhra Pradesh
4.2
Gujarat
3.8
All India
387.8
Source: Visvesvaraya Trade Promotion Centre