Karnataka's ₹1 Trillion Tech Push: Bidadi AI City, Perks to Move Beyond Bengaluru

Karnataka to build AI and IT city in Bidadi: what government teams need to know

Karnataka is moving ahead with a major tech expansion: over ₹1 trillion for Bengaluru's infrastructure, a new AI- and IT-focused city on 9,000 acres in Bidadi, and a policy push to spread growth beyond the capital. The plan was outlined at the Bengaluru Tech Summit 2025 by Deputy Chief Minister DK Shivakumar, who underlined the city's talent base and the state's global ambitions.

"There are about 25 lakh IT experts in Bengaluru and no other place on earth has this kind of talent pool," he said. The state is also preparing proposals for a second airport and a dedicated NRI Secretariat, alongside residential layouts for NRIs and an international complex for global businesses.

The big bets

• 9,000-acre AI and IT city near Bidadi with international business infrastructure.
• Over ₹1 trillion allocated to strengthen Bengaluru's core infrastructure.
• Proposals for a second airport to handle future demand.
• NRI-focused initiatives: residential layouts and a dedicated NRI Secretariat.
• Beyond Bengaluru plan to shift growth to tier-2 and tier-3 cities.

Global interest is high, with representatives from sixty countries, nearly fifty thousand participants, and 1,500 companies at this year's summit. Shivakumar credited IT Minister Priyank Kharge and KIONICS in-charge Sharath Bachegowda for strengthening the state's digital environment, adding that "criticism is welcome, praise is welcome. Serving the people is the first priority."

Why this matters for public sector teams

This is a coordination-heavy program that touches land, power, water, mobility, housing, skilling, compliance, and investor facilitation. If executed cleanly, it can decongest Bengaluru, create new tech hubs in Mysuru, Mangaluru, Hubballi Dharwad, Belagavi and others, and pull in fresh global capital.

Incentives snapshot (Karnataka IT Policy 2025-2030)

• 50% rent reimbursement up to ₹2 crore for start-ups relocating or expanding outside Bengaluru.
• 30% property tax reimbursement for three years.
• Complete electricity duty waiver for five years.
• 25% reduction in telephone and internet bills up to ₹25 lakh.
• R&D support: 40% reimbursement up to ₹50 crore.
• Additional benefits for AI, quantum computing, blockchain and related work.
• Budget: roughly ₹960 crore over five years; limited recipients per category.
• Applications expected after detailed guidelines are issued in December.

For policy specifics and updates, monitor the Department of Electronics, IT & Bt portal: itbt.karnataka.gov.in.

Immediate to-dos for departments

• Constitute a Bidadi AI City SPV with clear ownership, decision rights, and a project monitoring unit (PMU).
• Land and master plan: finalize zoning, FAR, mixed-use ratios, and reserves for data centers, R&D, housing, and social infrastructure.
• Trunk infrastructure: power (high-reliability feeders), water, sewage, stormwater, roads, high-capacity fiber rings.
• Mobility integration: mass transit connectivity to Bengaluru, last-mile within the city, logistics corridors.
• Single-window clearances: target sub-21-day cycle time for permits; publish SLAs and dashboards.
• Environmental and social safeguards: rapid EIA, flood modeling, groundwater and biodiversity baselines, and fair R&R for affected communities.
• Anchor-investor strategy: secure 8-12 global and domestic anchors upfront to de-risk Phase 1.
• Skills pipeline: MoUs with universities and ITIs; apprenticeships tied to incentives.
• Digital governance: one portal for applications, reimbursements, grievance redressal, and public progress trackers.

Funding and delivery structure

• SPV-led phased development with milestone-based release of public funds.
• PPP for utilities and social infra; consider viability gap funding where needed.
• Green infra: district cooling, recycled water targets, and renewable PPAs for data center loads.
• Explore municipal/infra bonds for offsite works once revenue streams stabilize.

Risks and how to reduce them

• Delays in land and clearances: pre-bundle approvals; publish checklists; empower the PMU to resolve inter-agency issues weekly.
• Infra lag vs. tenant onboarding: sequence occupancy permits with utility commissioning windows.
• Water and energy security: recycled water adoption, storage buffers, and dedicated high-availability power with redundancy.
• Speculative relocation: tie incentives to real job creation, capex, and time-bound milestones.
• Uneven regional benefits: set city-wise quotas and publish disbursement data quarterly.
• Community impact: transparent R&R, local hiring clauses, and SME vendor onboarding in nearby towns.

What to track quarterly

• Acres acquired and serviced; share of plots ready-to-build.
• Cycle time for clearances and reimbursements.
• Number of startups relocating; jobs created and retained outside Bengaluru.
• Private capital leveraged per ₹ of public spend.
• Anchor tenants signed; R&D commitments; data center MW contracted.
• Share of new IT value-add coming from tier-2/3 cities.

Timeline signals (subject to official notifications)

• December: release of detailed incentive guidelines and application process.
• Q1 2026: first application window; helpdesks active in Mysuru, Mangaluru, Hubballi Dharwad, Belagavi.
• Mid-2026: Phase 1 tenders for trunk infra and common facilities.
• Late 2026: ground-breaking for Bidadi core district; anchor allotments.

For startup-facing teams

• Publish a clear, short explainer on eligibility, documentation, audit trail, and disbursement timelines.
• Create a predictable reimbursement cadence (e.g., quarterly) and define caps per category upfront.
• Open a single hotline and email with 48-hour first response SLAs.
• Run roadshows with local industry bodies in each eligible city; list available plug-and-play spaces.

Skills and capacity building

Upskill government teams on AI procurement, data governance, and outcome-based contracts. This reduces vendor risk and speeds approvals when the first wave of AI tenants lands.

For curated learning by job role, see: AI courses by job role.

Global partnerships

Leverage the interest shown by leaders from multiple countries at the summit to build a pipeline of MOUs with clear timelines and ROI. Use the event's momentum to schedule sector-specific delegations and follow-through meetings within 30-60 days.

Bottom line

The strategy is bold and workable if execution stays simple and transparent. Lock the SPV, publish the playbook, move dirt on time, and keep the incentives clean. The rest follows.