Amidst the gloomy scenario of an economic slowdown across the country and pink slips being handed out by some of the IT majors in Bengaluru, the Karnataka industries and commerce department has not taken a pessimistic view of the situation and is looking at some sunrise projects
As the department prepares for its ` Invest Karnataka--Hubballi' event to be held in Hubballi in early January 2020, the Japanese Industrial Township (JIT) announced in 2016 as an exclusive facility to host Japanese businesses in the southern state is ready for occupation. The 519.5-acre area in the Vasanthanarasapura village in Tumakuru district, 60 km from Bengaluru is anticipated to boost Japanese investments in Karnataka. It already boasts of 539 units in the hospitality, automobile, consumer engineering, seeds and agriculture sectors with Honda Motorcycle & Scooter India setting up its plant in Narsapur near Kolar, about 60 km from Bengaluru.
“There is zero slowdown in aerospace or the global linkages sectors like the JIT. The slowdown is in the automobile and real estate sectors as they have endemic issues such as the transition from BS4 to BS6 (Bharat Stage norms where manufacturers have to configure their engines to meet emission control parameters) in the automobile industry. In the real estate sector where there was an oversupply with people not using it as an investment vehicle anymore,'' Karnataka industries and commerce department principal secretary Gaurav Gupta said.
Under the industrial policy of Karnataka, the Karnataka Industrial Area Development Board (KIADB) gave land to JIT with infrastructure such as power and other civil works. About 100 companies are expected come up in the area for which expression of interest by companies has to commence, Gupta said.
JIT in Karnataka will be an integral part of the Chennai-Bengaluru Industrial Corridor, which is among the five industrial corridors being developed by the Union Ministry of Commerce and Industry to boost economic activity and create jobs, Gupta said. Heavy engineering, machine tools, automotive and aerospace components will be among the key sectors of the industrial township.
This is also expected to boost tourism between Karnataka and Japan. The proposed direct flight from Bengaluru to Tokyo is expected to cut down the travel time from 14 hours to nine, which is also being seen as another added advantage.
JITs in India were agreed to be developed as one of the initiatives in the Japan-India Investment Promotion Partnership announced by Prime Minister Narendra Modi in 2014. JITS were designed to offer business environments in which Japanese companies can smoothly establish production sites and operate businesses, according to information on the website of ministry of economy, trade and industry, Japan.
With infrastructure ready at the project site, promotional activities to get Japanese companies to set up business have started. In June, the Karnataka government made a presentation to 100 CEOs from Japan in New Delhi in association with Japan External Trade Organisation (Jetro). “Once the threshold of 50% to 60% occupancy is crossed, the next concern will be setting up social infrastructure there,” Gupta said.
After JIT, the department is now also fine tuning the proposal for a Pharma Park, which was conceived in 2017. Land for this has been identified in Nagamangala in Mandya district and the key objective of the government is to make Karnataka as the preferred destination for pharmaceuticals going by the presence of large number of pharmacy and engineering colleges.
However, according to industry and trade sources, the political stability of the government in the last 18 months does crop up during discussions with foreign investors but has not been a serious consideration for them. The only shortcoming is Karnataka's political presence at international business events, which is next to nil. “Presence of just officials at such events will not boost confidence of prospective investors as it should be backed by a political leadership, which former industries R V Deshpande did to some extent. The chief minister should include business travel in his itinerary as openness to trade with Karnataka is higher than other states in the country,” sources maintained.