Karnataka

Karnataka contains India's most dramatic economic contradiction: medieval temple ruins stand within sight of glass-walled campuses where engineers write code for the world's largest technology companies. This state produces 42% of India's software exports while remaining the country's largest coffee grower.

The region's strategic importance emerged in the 14th century when the Vijayanagara Empire established its capital at Hampi. By 1500, the city had become the world's second-largest after Beijing, a trading hub attracting merchants from Persia and Portugal. The empire's collapse in 1565 at the Battle of Talikota scattered power across the Deccan, eventually concentrating in the Mysore Kingdom. Under Tipu Sultan in the late 18th century, Mysore became an economic powerhouse and military innovator—his iron-cased rockets later inspired British weapons used in the Napoleonic Wars. Tipu's defeat in 1799 brought the region firmly under British control.

Colonial rule left institutional deposits that would prove unexpectedly valuable. The British established engineering colleges and research institutions, including the Indian Institute of Science in 1909. Bangalore's mild climate made it a favored cantonment town. When India gained independence, the new government located aerospace and defense research facilities in the city, creating pockets of technical expertise.

The decisive transformation came in 1984 when Texas Instruments opened an R&D facility in Bangalore, the first American technology company to do so. Domestic firms Infosys and Wipro scaled rapidly during the 1990s liberalization, and the Y2K crisis sent a flood of contracts to Bangalore's programmers. Electronics City, established in 1978 on 335 acres south of the city, became the nucleus of a technology cluster now home to over 500 Global Capability Centers.

Today Karnataka's economy exceeds $350 billion, ranking fourth among Indian states. Bangalore generates 98% of the state's software exports. The state leads India's aerospace manufacturing, producing 60-65% of national output. Coffee plantations in Kodagu district yield one-third of India's production. Yet growth strains foundational resources: the Cauvery River dispute with Tamil Nadu flared again in 2024 amid drought, with Karnataka citing 44% rainfall deficits while courts mandate water releases to downstream farmers.

By 2026, Karnataka aims to host 500 Global Capability Centers. Bangalore's projected 8.5% annual GDP growth through 2035 would make it the world's fastest-growing major city—if the state can secure the water its ambitions require.